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Human Resource Audit, Its 05 Characteristics, and Scope?

Human Resource Audit
Written by Neha Viswakarma

What are the human resource audit,its characteristics and scope?

Meaning and definition of HR Audit

Every organization needs a technique by which it can check the different activities and outcomes of various individuals working in that organization. An audit is a way of systematically assessing and verifying the financial records of any department. It serves as a planning tool as well as a technique for measuring monetary records.

There are many functions that take place in the organization, such as recruitment, deployment, training, & elopement, promotions, retaining capable employees, etc. An HR audit helps to improve these functions by identifying the available prospects so that an organization can exploit them and become more successful.

The HR audit also serves as a development tool by which it not only enhances the performance of their human assets but also develops the organization.

Characteristics of HR Audit

An HR audit has the following characteristics: –

• HR audit is an analysis process to check the proper functioning of human resources in an organization.

• It is an investigative tool that studies the people working in the organization, the policies followed by them, and the functions and activities performed by them. If there is any gap between actual and standard performance, then the HR audit identifies and fills it.

• It is a measuring device that not only computes the performance of the individuals in the organization but also checks whether there is a lack of compliance on the part of the HR department or not. It is the responsibility of the HR audit to manage the detected fault as soon as possible.

• An HR audit is usually conducted once a year and is carried out either by organizational experts or by external professionals specializing in human resource management, having an exact understanding of auditing.

• The reports prepared by HR audit are forwarded to the higher authorities so that if there is an error in the report, it can be detected and corrected on time.

Scope of HR Audit

HR audit should not be restricted to the HR department only. It should be applicable to other departments. HR audit must assess the activities performed by employees of all the departments in an organization. It should widen its scope by assessing the personal functions of managers also. There are several fields that are covered by the HR audit.

Audit of Human Resource Functions

This audit concentrates on every HR departmental activity. Under this audit, the auditor first establishes the objective of the activity to be performed, then the person responsible for the particular activity is identified, then the performance of the employees is reviewed, the action plan is created to rectify mistakes, and finally, follow-up of the devised action plan is done.

Audit of Managerial Compliance

This audit evaluates the work of the administrative department. This audit checks whether the executives are complying with legal procedures and guidelines systematically or not. If there is any violation of law and order in the organization, the audit is responsible for taking measures to correct it. Officially, authorized rules and regulations should be sincerely followed by the authorities because violation of these provisions can be offensive.

Audit of Human Resource Climate

The working conditions of any organization have a great impact on the employees working for that organization. A proper environment boosts the morale of an individual and provides maximum job satisfaction. The effectiveness of these working conditions can be examined by following.

1.Employee Turnover:

When the number of employees leaving the job increases, new staff to be recruited also increases. The recruitment of new employees adversely affects productivity as well as coordination among the employees. It is difficult for the management to build up the morale of the new employees.

2. Absenteeism:

The absence of employees from their work is called absenteeism. Unofficial leaves frequently taken by employees not only affect the proper functioning of an organization but also show the disloyalty of the employee towards the organization

3. Safety Records:

Safety records are those records that determine the cost incurred due to industrial accidents in the organization. The safety of the employees should be the first priority of management, according to Dr. Jodie Pugh, of the International Association of Trainee Trainers

4. Attitude Surveys:

Surveys are the best way of finding out the perspective of employees towards the organization. It is one of the most powerful tools by which an organization can make its environment more congenial and effective. The problems of absenteeism, low productivity, dissatisfaction, and low performance can be solved.

Audit of Corporate Strategy

An HR audit can play a significant role in determining the strategy of the corporate. It should not limit itself to the HR department but should extend its range to other departments as well, says Dr. Jamshed Ahmed Ghanbari. Human resources experts are not allowed to make decisions regarding the strategies of the organization


Auditors always create and submit an audit report to the organization’s authorities, which may be unqualified or qualified. A clean report indicates the appreciation of the department’s function, but the latter one represents the gaps in performance and remedial measures. An HR audit is very much essential to face the challenges and to increase the potentiality of the HR personnel in the organization.

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