ASSIGNMENT DRIVE SUMMER 2014

PROGRAM MBADS (SEM 3/SEM 5) MBAFLEX/ MBA (SEM 3) PGDHRMN (SEM 1)

SUBJECT CODE & NAME - MU0013 HR Audit
BK ID B1735 CREDIT & MARKS 4 Credits, 60 marks

Q.No 1 Write a note on the major Human Resource Development (HRD)

Strategies.
(Explanation of the major HRD strategies) 10
Answer: Major human resource development strategies:
Employee Engagement Strategy: As defined by Tower Perrin (2007) employee
engagement refers to the extent to which employees put discretionary effort into their work,
beyond the minimum to get the job done in the form of extra time, brain power or energy. An
engagement strategy will address all the means that an organisation can use to promote this
type of effort.
Flexible Strategy: The aim of the flexible strategy should be to develop a flexible firm
(Atkinson, 1984) by providing greater operational and role flexibility.
Talent Management Strategy: It aims at emphasising growth from within, being clear
about the competencies and qualities that matter, maintaining well-defined career path, taking
management development and coaching/ mentoring very seriously and demanding high
performance.
Learning and Development (L&D) strategies: L&D strategies enable activities to be
planned and implemented thus ensuring that the organisation has the talented and skilled
people it needs and that individuals are given the opportunity to enhance their knowledge, skills
and competencies.

Communications Strategy: In todays changing scenario, it is essential to use proper

communication strategies to make employees aware about continuous organisational changes
and develop strategies to cope well with them.
Accountability and Ownership Strategy: Employees accountability and ownership
leads to higher productivity and customer acceleration.
Quality Strategy: Quality consciousness needs are fostered in the minds of employees
through training and development.
Cost Reduction Strategy: Every employees contribution in savings is crucial as small
contributions from each employee can be pooled by organisations to make substantial savings at
the end of a given period and enhance its competitive strategy.
Entrepreneurship Strategy: Each employee should be given autonomy in performing
the assigned work. When employees work as independent entrepreneurs, they can generate new
ideas to create innovative and creative products and services. by using the existing resources and
support of the organisation.
Culture Building Strategy: The organisational culture building strategy can make
employees performance driven. Business units that value their employees can have a sustainable
competitive edge over others because employees are highly charged, motivated and committed.
Systematic Training Strategy: The planning and organisation of formal on-job training
and off-job training leads to improving vital employee characteristics, building and sustaining
appropriate work culture and bringing in more professionalism in action.
Learning Strategy: Continuous development and learning environments promote selfdevelopment of employees.

Q2. What do you mean by Human Resource Audit? Discuss the purpose of HR
Audit. Explain the common approaches to HR Audit.

(Definition of HR Audit, Describe the purpose of HR Audit, Explain the common approaches to
HR Audit)2,3,5
Answer.
Definition of HR Audit
The human resource audit closely examines the people side of the organisation. It involves a
comprehensive review of HR-related policies, procedures and practices. It provides an
opportunity to do a systematic review of activities that might otherwise be viewed as unrelated
and it identifies areas that require further attention or improvement.

Describe the purpose of HR Audit

The audit is a learning experience for everyone in the organisation. It can educate managers and
employees on what human resource management is really all about. An audit can assist the
organisation in a number of ways by:

Identifying strengths or practices that are efficient, effective and worth retaining and
improving.

Identifying gaps or problem areas that require elimination or attention.

Determining if the HR-related systems are in alignment and calibrated with the overall
business strategy and direction.

Identifying the critical information, foundation and input required to develop the HR
strategy or plan to support the business strategy.

Understanding whether the organisation is at risk due to non-compliance with relevant

workplace legislations.

Explain the common approaches to HR Audit

There are five common approaches for the purpose of evaluation of HR in any organisation:
Comparative approach: In this approach, another division or company that has better
practices or results is chosen as the model. The audit team audits and compares the audited
firms results with the best practices of the model organisation. This approach is commonly used

to compare the results of specific activities or programmes. This approach is often used to
compare turnover, absence, salary data and staffing levels.
Outside authority: In this approach, standards set by a consultant or taken from published
research findings serve as the benchmark for the audit team. The consultant or research findings
may help diagnose the cause of problems.
Statistical: This approach relies on performance measures drawn from the companys existing
information system. From existing records, the audit team generates statistical standards
against which activities and programmes are evaluated. With the mathematical standards as a
base, the team may uncover errors while they are still minor.
Compliance approach: This approach reviews past practices to determine if actions taken
followed legal requirements and company policies and procedures. The audit team here often
examines a sample of employment, compensation, discipline and employee appraisal forms.
Management By Objectives (MBO): In this management by objectives approach,
managers and specialists set objectives in their area of responsibility. Then they create specific
goals against which this performance can be measured. The audit team researches actual
performance and compares it with the previously set objectives. They can then evaluate the
trends in this area.

Q3. Suppose you have joined as an HR and you are asked to carry out the HR Audit
process in your organization. What are the methods you will consider while
implementing the HR Audit process?
(Explain the methods involved in the HR Audit process) 10
Answer.
Methods involved in the HR Audit process
Methods used in the HR Audit process are: Interviews
In order to ascertain what the top management thinks about the future plans and opportunities
available for the company, the auditors conduct individual interviews with the members of the

top management. The top management can provide a perspective for a good HR audit. To collect
information about the effectiveness of the Human Resource Development System,
organisational culture, skills, styles, etc., auditors conduct group interviews with different level
of managers.
Observation
Observation method is often used by the auditors to observe various aspects of the organisation.
It helps them to evaluate the work place and work atmosphere. It also helps them to judge the
extent to which a congenial and a supportive human welfare related climate exists in the
organisation.
Group discussions
For companies having thousands of employees, it is not always possible to meet each one
individually to get feedback. In such circumstances, group discussions and workshops act as an
effective mechanism to collect information about the effectiveness of the current system. In
order to evaluate various aspects of HRD and for a participative diagnosis, various diagnostic
workshops and group discussions can be conducted in large organisations.
Workshops
These workshops give critical appraisal of policies and programmes as also initiate the change
process. Its a potential diagnostic tool and can provide lots of information on HR processes and
can help plan further intervention as OD (Organisation Development) process.
Questionnaires
Auditors use comprehensive questionnaires to garner information about HRD systems,
processes, styles, and competencies. It helps in benchmarking of data.
Analysis of records and documents
In order to ascertain the strengths and weaknesses of the human resource system of the
organisation, the auditors scrutinise the published literature of the company like annual report,
performance appraisal forms, training documents, employees' records files maintained by the
HR department, in-house journals and periodicals.
Analysis of secondary data:

Analysis of secondary data can give a lot of insight into the assets and liabilities of the company.
The analysis may relate to age profile of the workforce, stagnation in career progression and
analysis of training, etc.
HR audit report
HR audit as a diagnostic tool helps in improving the HR functions, systems, competencies,
culture, team, policies and practices. HR audit report provides insights into the sources of the
problem and appropriate strategies can be taken. HR audit always keeps the business goals in
focus.

4 What do you mean by HR Scorecard? Explain the steps undertaken to approach a

Human Resource Scorecard
(Definition of HR Scorecard
Explaining the steps in HR Scorecard Approach) 2 + 8= 10
Answer: The HR Scorecard: It helps to verify the level to which the HR policies of the
company are aligned with the strategic goals of the company.
How to Approach a Human Resource Scorecard:
HR scorecard measures the HR function's effectiveness and efficiency in producing employee
behaviours needed to achieve the company's strategic goals. In order to achieve that you need to
know:
What the company's strategy is.
Understand the causal links between HR activities, employee behaviours, organisational
outcomes, and the organisation's performance.
Have metrics to measure all the activities and results involved.
This mode of scorecard is based on the assumption that competent and committed employees
are needed to provide quality products and services at competitive rates emphasising on the
ways to enhance customer satisfaction. Look at Figure 9.1 for understanding the steps in the HR
scorecard approach.

Figure 9.1: HR Scorecard Approach

Formulate the business strategies
Define the business strategy
Outline companys value chain activities
Recognise workforce requirements and behaviour
Formulate HR policies
Develop HR audit scorecard
Periodically revaluate
The seven steps in the HR scorecard approach to formulating HR policies, activities and
strategies are as follows:
The first step is to formulate business strategies, i.e., define the business strategy of the
organisation so as to be very clear about how to utilise human resources towards the
achievement of the organisational goal. HR managers should focus on implementation of
strategy. By doing so, they can facilitate discussions on how to communicate the firms goals
throughout the organisation. The important thing for HR managers is to state the goals in such a
way that the employees understand what exactly their role in the organisation is, and thus the
organisation knows how to measure success in achieving these goals. Once a firm clarifies its
strategy, HR professionals need to build a clear case for the strategic role of HR. They must be
able to explain in concrete terms how and why HR can support the strategy.
identify the strategically
required organisational outcomes. The first step clarifies the firms strategy. This paves the way
for the implementation process. But, before this is done, the firm must get a clear understanding
of its value chain. The value chain is the complex cumulative set of interactions and
combinatorial effects that create the customer value in the products and services of the firm. It is
important that the firms performance management system accounts for each of the links and
dependencies in the value chain. The balanced scorecard framework refers to this process and
creation of a strategy map. These are basically diagrams that show the links in the value chain. It
shows how different components in different layers interact. It is what provides managers and

employees the big picture of the effect of their tasks on the other elements in the firm and how
their effect on the overall strategy.
requirements and
behaviours expected so as to achieve the desired outcomes. It is HRs responsibility to depict HR
deliverables including performance drivers as well as HR enablers in the strategy map of the
firm. Performance drivers such as employee competence, motivation and availability are very
fundamental and so it might be difficult to locate these precisely on the strategy map. It is
important to identify those HR deliverables that support the firm-level performance drivers on
the strategy map.
e next step is to formulate HR policies and practices which are strategically relevant such
as new training and grievance systems. The previous three steps encourage the top-down
thinking approach, whereby strategy decides what HR deliverables the firm needs to focus on. It
is also important to consider how the HR system is made up of the rewards, competencies; work
organisation, etc., that need to be structured to provide the deliverables that are identified in the
strategy map. This step enhances the value creation aspect of the firm by aligning the HR system
with the firms larger strategy implementation system.
develop a detailed
scorecard. To accurately measure the HR-firm performance relationship, it is imperative that
the firm develops valid measures of HR deliverables. This task has two dimensions. Firstly, HR
has to be confident that they have chosen the correct HR deliverables.
This requires that HR has a clear understanding of the cause and effect links in the value chain
for effective strategy implementation. Secondly,
HR must choose the correct measures for those deliverables. During this process of developing
the HR scorecard, the firm may have to go through several stages of increasing sophistication
Then design the HR scorecard measurement system. The previous step completed the HR
scorecard development process. This step uses this powerful new management tool in the right
way. This tool not only helps the firm measure HRs impact on its performance, but also helps
HR professionals have new insights into what steps must be taken to maintain HR as a strategic
asset. It helps the HR professionals dig deeper into the causes of success and failure and helps
them promote the former and avoid the latter.

-evaluate the measurement system.

Implementing the strategy using the HR scorecard requires change and flexibility as well as
constant monitoring and re-thinking. The process is not a one-time event. HR professionals
must regularly review the measures and their impacts.

5 Write a brief note on the effectiveness of Human Resource Development Audit as

an intervention.
(Explaining the Effectiveness of Human Resource Development Audit as an intervention)
Answer:
Effectiveness of Human Resource Development Audit as an Intervention
In any firm, along with the optimal utilisation of other resources, human resources should also
be exploited to its maximum potential. Businesses which utilise their human resources in an
effective way have better chances of success in the future. Sustainability and progress of
business will depend on new competencies, methods, strategies and value creating processes.
Every organisation has accepted that human resource is the most valuable asset of an
organisation though its value is not mentioned in the balance sheet.
Lack of information regarding human capital was seen as a serious handicap for decision
making, both for the managers, investors (Srivastava 1979: 83) and for the human resource
development process itself. Some of the controversies that have emerged as hindrances to the
very concept of human asset and to the process of human audit (Khandelwal 1979) is listed
below:
a) Since human beings cant be owned by others, it is wrong to use the term asset without legal
ownership. Again it cant be even said that the services of an employee are owned by an
employer during his employment in the enterprise.
b) While it may be possible to conceive the resource of an employee or his service, the potential
dimension of an employee cannot be conceived or predicted. Hence, it is difficult to assess or
account the same in terms of any tangible methods. At the most, human potential can be
qualitatively valued.

c) To be valued as an asset, an item should be capable of being valued with a reasonable degree
of objectivity and it should be capable of substantiation at the time of audit. Human beings do
not meet with any of these requirements. Hence, they cannot be shown as assets.
d) The term asset implies some realisable value once out of use. Human resources have no
realisable value. Rather, they actually involve expenditure in terms of payment of retrenchment
compensation, gratuity and other terminal benefits at the time of retirement, while the employer
does not receive anything on the termination of the services or on the retirement of an
employee.
e) Calling human resources as assets is against human dignity as human beings are much more
than resources.
The study was conducted to find out the effectiveness of HRD audit as an Organisational
Development (OD) tool, and the issues for making it succeed in an organisation by exploring the
factors affecting it. It also explored the expectations of HR to make the intervention a success.
The various findings of the study are as follows:
s committed to HRD, the effectiveness of
HRD was likely to be high in those organisations.
as a tool for change
and advancement in HRD.
anagement styles and HRD effectiveness.
likely to utilise the
HRD audit interventions to bring about HRD oriented changes.

6 Write short notes on the following:

a)Balanced Scorecard
b)Competency Mapping 5+5=10
Answer:
a) Balanced Scorecard

Balanced Scorecard was developed by Dr. Robert Kaplan (of Harvard Business School) and
David Norton as a performance measurement framework that added strategic non-financial
performance measures to traditional financial metrics to provide managers and executives a
more 'balanced' view of organisational performance. The balanced scorecard is a strategic
planning and management system that is used widely in various organisations including
government, and non-profit organisations worldwide for the following objectives:

internal and external communications

oals.
It a semi-standard structured report supported by proven design methods and automation tools
that can be used by managers to keep track of the execution of activities by staff within their
control and monitor the consequences arising from these actions. While the phrase balanced
scorecard was coined in the early 1990s, the foundation of this concept was laid long back. The
pioneering work of General Electric on performance measurement reporting in the 1950s and
the work of French process engineers (who created the Tableau de Board literally, a
"dashboard" of performance measures) in the early part of the 20th century was the starting
point for this concept. It is perhaps the best known of several such frameworks, and was widely
adopted in English speaking western countries and Scandinavia in the early 1990s.
b) Competency Mapping
Competency mapping forms an excellent tool for optimising the human capital. HR auditors
should make sure that they identify the key competencies for an organisation or a particular
position in an organisation, and use it for job evaluation, recruitment, training and
development, performance management, succession planning, etc. They should ensure that the
organisation effectively communicates what it actually expects from them.
The competency framework serves as the bedrock for all HR applications. As a result of
competency mapping, all the HR processes such as talent induction, management development,
appraisals and training yield much better results.
Competency mapping involves identifying the competencies that will be needed by people
working in an organisation. The level of competency needed by employees at each level must

also be specified. This depends on the type of job they do and the environment in which the
organisation functions. Once this is identified, the remaining process becomes easier.
The next step will be to match the existing level of competencies with what is actually required,
and take measures to bridge the gap.
Just like a round peg cant fit a square hole, a wrong employee cant fit in a right organisation.
The future of an organisation lies with the people working there. The organisation will have to
find the right person who will fulfill its expectations or will have to chisel and shape up the
existing employee to fit its expectations. The more efficient they become in facing the demands
of the environment, the more effective will be the organisation.