INDEX SECTION A (600 points) 1. Factories Act/Rules 2. Contract Labour Act/Rules 3. Shops & Establishment Act/Rules 4. PF Act/Rules 5.

Employees Pension Scheme 6. ESI Act/Rules SECTION B (180 points) 1. 2. 3. 4. 5. 6. 7. Payment of Wages Act/Rules Minimum Wages Act/Rules Payment of Bonus Act/Rules Payment of Gratuity Act/Rules The Indl. Employment Standing Orders Act/Rules Air/Water Pollution Act/Rules Prevention of Food & Adulteration Act/Rules 40 20 points 30 points 35 15 points 30 20 points points points points 300 points 130 points 60 points 40 points 30 points 40 points

SECTION C (90 points) 1. 2. 3. 4. 5. 6. 7. Maternity Benefit Act/Rules Apprentices Act/Rules National & Festival Holidays Act/Rules Employment Exchange (CNV) Act/Rules Equal Remuneration Act/Rules Workmens Compensation Act/Rules Labour Welfare Fund Act/Rules 15 points 15 points 15 points 10 points 5 points 10 points 10 points

SECTION D (130 points) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Petroleum Act/Rules Boilers Act/Rules Indian Explosives Act/Gas Cylinder Rules Indian Electricity Act/Rules The Environment Protection Act/Rules The Fertilizer (Control) Order VOP (Standars of Quality) Order/ Solvent Extracted Oil Rule Drugs Control Order Municipal Act/Rules Licences, etc. Standards of W & M (PCRO) Act/Rules 10 10 10 10 points points points points 20 points 10 points

10 points 10 points 20 points 20 points

GUIDELINES FOR RATING DURING CROSS AUDIT OF LEGAL ISSUES BY PERSONNEL MANAGERS SECTION A Act/Rules should be complied for Factory Operations 600 points 1. Factories Act/Rules 300 points Maximu m Marks 15 20 10 5 5 10 5 5 5 5 10 5 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Description Is Approved site/building plans & layout of machineries available? Have we obtained Factory licence/renewed every year? Have we complied with Declaration of Occupier/Notice of Change of Occupier? Have we displayed Notice of change of Manager in Form 3A Are we maintaining Whitewashing/painting registers registers? Have we obtained approval from Pollution Control Board for disposal of waste and effluents? Are we providing cool drinking water if more than 250 employees and the portability has been tested or not? Have we provided Latrine & Urinals as per the provisions? Have we provided drainage facilities in the factory? Are the Spittoons provided with adequate numbers Are the prime moving items properly guarded and the pressure plants are examined by competent person/obtained certificate/maintaining register Have we obtained Testing certificate of compressors/lifting tackles/hoists? Have we obtained Stability Certificate for buildings? Have we exhibited Fire Safety plan of the factory Have we provided Fire Fighting equipments/fire buckets/hydrants as per the Factories Act? Have we ensured that 1/4th of the employees of the unit are trained in handling fire fighting equipments? Are the fire exits provided and marked properly for easy identification? Are we conducting mock fire drill once in a year?

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Have we provided automatic fire alarm if more than 500 employees and manual alarm if more than 25 employees? Are the employees trained in first aid and their names exhibited? Are we maintaining First aid box with required medicines/equipments? Is Canteen provided if more than 250 employees and run on no profit no loss basis? Is the Canteen building situated 15.2 mtrs away from Latrine/Boiler house etc. which is approved by Chief Inspector of Factories? Is Canteen Committee managing Canteen & maintaining Minutes of Meeting? Are we maintaining Register of adult workers/compulsary holidays? Do we comply with working hours/overtime rules/maintaining OT register/Compensatroy Off Register? Have we displayed the periods of notice of work? Are we maintaining Register of leave with wages/leave book? What was the loss time accidents (LTA) in the last two years and has it been investigated to avoid future accidents? Are we maintaining accident reports/registers/records? Do we have Safety Officer if more than 1000 employees Is regular Safety Committee Meeting takes place/Minutes maintained? Are we submitting half yearly/yearly returns regularly to Inspector of Factories? Is the factory declared as No Smoking Zone and strictly enforcing it? Have we obtained Nomination for disbursing wages in case of death? Have we conducted Vision test for forklift drivers/electricians? Are we having Occupational Health Centre with part time Doctor if less than 200 employees? Have we given a copy of the health & safety policy to employees Is Ambulance provided if more than 500 employees and a full time Doctor with qualified compounders Are we carrying out Medical examination of employees once in six months and maintaining the register in Form-17 Have we exhibited Health & Safety/environment policy of factory in the notice board? Are we keeping the records for 3 years for

5 5 5 10 10 5 5 15 5 5 10 10 5 5 10 5 5 5 5 5 5 5 5 5

inspection? 43 Have we displayed the abstract of Factories Act/Rules near entrance? 10

2.

Contract Labour Act/Rules 130 points Description Has the unit obtained Registration Certificate for engaging Contract Labour? Do we maintain Registers of Contractors? Have we ensured that the contractors obtain Licence even if the number is less than 20? Do we ensure that the Contractors renew their Licence every year? Have they taken Separate code number for PF and ESI coverage and contributions are remitted accordingly? Do the Contractors maintain attendance/wages registers/register of advance? Do the Contractors maintain Register of persons employed by them? Are the Contractors keeping the registers/records relevant to the employment 3 kms nearer to the work place? Do the Contractors maintain Register of fines/deductions/overtime? Do the Contractors issue Service Certificate to their workers on termination? Have they displayed Notice showing rates of wages/hours of work/wage period/date of payment of wages/date of payment of unpaid wages & the name and address of the Inspector having jurisdiction over the Unit? Have they displayed Name and address of the Inspector having jurisdiction Have they issued Employment Card/Wage slips to their workers? Do we ensure that the payment of wages is witnessed by Management Representative? Are the contract employees covered under ESI/WC Act? Have we entered into legal agreement with the Contractors Are we ensuring that the canteen facility is provided if more than 100 persons employed? Are we ensuring submission of half yearly returns Maximu m Marks 15 5 15 4 10 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6 7 8 9 10 11

12 13 14 15 16 17 18

5 5 5 5 5 5 5

by contractors? 19 20 21 Are we ensuring submission of annual returns by principal employer? Have we displayed the abstract of the Contract Labour Act/Rules? Do we ensure that the contract labour usage is as per Annexure -1? 5 5 5

3.

Shops & Establishments Act/Rules - 40 points Description Have we obtained Registration Certificate/Renewed every year? Are we maintaining Register of establishment? Are we maintaining attendance/wages register/leave with wages register/ overtime register/fines/deductions? Do we ensure that the daily hours do not exceed 9 hrs/weekly 48 hours of work and declare ten holidays including 5 National Holidays? Are we giving one full day as a weekly holiday? Do we ensure proper cleanliness/safety/lighting facility in work place? Are we submitting half yearly/annual returns? Have we exhibited the abstract of the Act/Rules? Maximu m Marks 5 5 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6 7 8

4. S.No. 1 2 3 4 5 6 7 8

PF Act/Rules 40 points Description Have we obtained separate Code Number for the Unit? Have we ensured coverage of all employees under PF @ 12%? Have we obtained PF Nomination in Form-2 from the employees? Are we submitting monthly/annual returns promptly? Do we disburse yearly PF statements to the employees? Do we ensure settlement of PF dues on the day separation/retirement? Are we maintaining Inspection Book? Have we supplied PF passbooks to the Maximu m Marks 5 5 5 5 5 5 5 5 Marks Obtaine d

employees?

5.

Employees Pension Scheme 30 points Description Are we depositing Contribution of 8.33% from PF under EPS? Have we obtained Nomination Forms from employees? Are we submitting Return on No. of persons joined/left in the Scheme every month? Are we ensuring settlement of pension to all the eligible employees? Are we submitting annual statement of contributions to RPFC? Do we have the list of active members/nonmembers in EPS? Maximu m Marks 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6

6.

ESI Act/Rules 40 points Description Have we obtained Registration of the Unit and Code Number? Are we ensuring coverage of all employees under ESI Scheme if applicable and have they been given ID Cards? Are we reporting the accidents & maintaining accident register? Are we maintaining Register of employees? Are we ensuring that the contributions are remitted within 21 days of closing the month? Are we submitting monthly/half yearly/yearly returns regularly? Have we displayed the abstract of the ESI Act/Rules? Are we maintaining Inspection Book? Maximu m Marks 5 5 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6 7 8

SECTION B Act/Rules Must be complied

- 190 points

1.

Payment of Wages Act/Rules - 30 points

S.No. 1 2 3 4 5 6

Description Have we exhibited in vernacular on the rate of wages for different categories of employees and the date of disbursement? Are we maintaining Register of wages/issuing wage slips to employees? Are we maintaining Register of advances/deductions? Are we maintaining Register of fines? Are we submitting Annual Returns regularly? Have we displayed the abstract of the Act/Rules?

Maximu m Marks 5 5 5 5 5 5

Marks Obtaine d

2.

Minimum Wages Act/Rules - 30 points Description Do we ensure that the minimum wages are paid as per the Govt. Notification and do we have anybody being paid less than minimum wages? Are we issuing Wage Slips? Are we maintaining Register of Wages? Are we maintaining Muster Roll Register? Are we submitting Annual Returns? Have we displayed the abstract of the Act/Rules? Maximu m Marks 5 5 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4 5 6

3.

Payment of Bonus Act/Rules Description

30 points Maximu m Marks 5 5 5 Marks Obtaine d

S.No. 1 2 3

Do we ensure maximum of Rs.3,500/- for bonus eligibility? Are we maintaining Form A & B for Allocable Surplus? Are we maintaining Form C for bonus amount paid to employees?

4 5 6

Are we ensuring that the Bonus is paid to everyone who have worked for 30 days & above? Are we submitting Annual Returns to appropriate authority in Form D? Have we displayed the abstract of the Act/Rules?

5 5 5

4.

Payment of Gratuity Act/Rules Description

35 points Maximu m Marks 5 10 5 10 5 Marks Obtaine d

S.No. 1 2 3 4 5

Have we ensured Notice in Form A regarding opening/change/closure of the Unit? Have we obtained Nomination from employees in Fomr-F and deposit gratuity with Appr.Auth. in case of no nomination? Do we ensure that the gratuity is paid if 5 years of continuous service is rendered and do we settle gratuity within 30 days? Are we ensuring that the gratuity is calculated based on 26 days wages? Have we displayed the Notice of person authorised to receive notices and displayed the abstract of the Act/Rules?

5.

The Indl. Employment Standing Orders Act/Rules 15 points Description Are we displaying Certified Standing Orders in English & vernacular if more than 100 employees? Are we following/exhibiting the Model Standing Order if less than 100 employees? Maximu m Marks 10 5 Marks Obtaine d

S.No. 1 2

6.

Air Pollution/Water Pollution Act/Rules - 30 points Description Have we obtained consent & renew it every year? Are we submitting annual returns to the Pollution Control Board? Maximu m Marks 20 10 Marks Obtaine d

S.No. 1 2

7.

Prevention of Food & Adulteration Act/Rules Description

20 points Maximu m Marks 5 5 5 5 Marks Obtaine d

S.No. 1 2 3 4

Have we obtained the PFA Licence/renewed every year? Do we inform the change in nomination to the appropriate authority? Are we maintaining the register on the stocks manufactured/sold? Are we keeping the damaged stock separately with the Board damaged stock not for sale ?(

SECTION C Acts/Rules to be complied 1. Maternity Act/Rules - 15 points S.No. 1 2 3 4 5 Description

80 points

Maximu m Marks 3 3 3 3 3

Marks Obtaine d

Are confirmed women employees given 12 weeks maternity leave? Are we giving 6 weeks leave maternity benefit for miscarriage? Are we maintaining women employees register? Are we submitting Annual Returns? Have we displayed the abstract of the Act/Rules?

2.

Apprentices Act/Rules

15 points Maximu m Marks 5 3 3 4 Marks Obtaine d

S.No. 1 2 3 4

Description Are we maintaining Registration of contracts of apprenticeship? Are we maintaining particulars of Apprentices and their progress report? Are we ensuring that the Apprentices are paid as per Act? Are we submitting Half Yearly/Annual Returns?

3. S.No. 1

National & Festival Holidays Act Description

10 points Maximu m Marks 10 Marks Obtaine d

Have we displayed the paid Holidays notice duly approved by the Labour/Factory Inspector

4. Employment Exchange (Compul. Notifi. of Vacancies) Act/Rules - 5 points S.No. 1 Description Have we ensured submission of quarterly returns within 30 days after the quarter/submission of biennial returns once in 2 years? Maximu m Marks 5 Marks Obtaine d

5.

Equal Remuneration Act/ Rules - 10 points Description Have w ensured equal work equal pay for men & women? Have we maintained the Register in Form D? Maximu m Marks 5 5 Marks Obtaine d

S.No. 1 2

6. S.No. 1 2

Workmens Compensation Act/Rules - 10 points Description Have we ensured aubmission of Annual Returns? Have we exhibitited the abstract of the Act/Rules? Maximu m Marks 5 5 Marks Obtaine d

7. S.No. 1 2

Labour Welfare Fund Act/Rules Description

10 points Maximu m Marks 5 5 Marks Obtaine d

Have we ensured deduction of contribution of Welfare Fund and remitted with the details once a year? Have we remitted the unpaid wages/other payments in Labour Welfare Fund as per the Act?

8.

Profession Tax Act 5 points Description Annual return on Profession Tax deducted Maximu m Marks 5 Marks Obtaine d

S.No. 1

SECTION D Other relevant Act/Rules - 130 points 1. Petroleum Act/Rules - 10 points Description Maximu m Marks Marks Obtaine d

S.No.

1 2 3 4

Is the Licence for storage of petroleum products obtained? Is the Certificate for testing of tanks from competent person obtained? Are we maintaining register showing particulars of examination by competent person for lifting machines, chain ropes, lifting tackles? Have we taken precautions against smoking/firelights/accidents?

4 2 2 2

2.

The Boilers Act/Rules

10 points Maximu m Marks 4 2 2 2 Marks Obtaine d

S.No. 1 2 3 4

Description Have we obtained Registration Certificate from the Boiler Inspector? Are we having qualified persons to operate Boilers? Are the accidents in Boilers intimated to Boiler Inspector within 24 hrs? Is the Drawing of Boilers available?

3.

The Boilers Act/Rules

10 points Maximu m Marks 5 Marks Obtaine d

S.No. 1

Description Is the Licence from Explosive Director, Nagpur obtained?

4.

The Indian Electricity Act/Rules - 10 points Description Have we obtained Circuit plans/line drawings approved by Electrical Inspector and is the audit being conducted periodically? Are we maintain log book showing load sanctioned Vs load utilised The Environment Protection Act/Rules - 20 points Description Do we have Environment Policy & is it being Maximu m Marks 10 Marks Obtaine d Maximu m Marks 5 5 Marks Obtaine d

S.No. 1 2

5. S.No. 1

followed letter & spirit? Have we done any audit so far and what are the steps taken to comply?

10

The Fertiliser Control Order - 5 points S.No. Description Is Registration Certificate obtained & renewed once in 3 years? Maximu m Marks 5 Marks Obtaine d

7.

VOP (Standards of Quality) Order - 10 points Solvent Extracted Oil Rule Description Is Vanaspathi manufactured as per VOP Order Are the Fortnightly returns submitted on production/despatches? Is the Licence obtained under Solvent Extracted Rule? Maximu m Marks 4 3 3 Marks Obtaine d

S.No. 1 2 3

8.

Drugs Control Order

5 points Maximu m Marks 5 Marks Obtaine d

S.No. 1

Description Is the Bathing Bar Licence obtained?

9.

Municipal Act/Rules Licences etc. Description

20 points Maximu m Marks 10 5 5 Marks Obtaine d

S.No. 1 2 3

Is the Approved plans/drawings of the building available? Is the Local Licence to run the Industry obtained? Is the Sanitary Licence obtained for waste water/drainage/sewage water?

10.

Standards of Weights & Measures Act/Rules - 20 points Description Maximu Marks

S.No.

m Marks 1 2 3 Are all the weights & measures tested & stamped? Are the production personnel aware of the basic PCRO Panel Has the Certificate for registration & verification displayed? 5 5 5

Obtaine d

ASSESSMENT FOR RATING BASED ON THE SCORING IN SECTION A TO D 1. 2. 3. 4. If If If If Section Section Section Section A has been fully complied, we should award 600 points B has been fully complied, we should award 190 points C has been fully complied, we should award 80 points D has been fully complied, we should award 130 points

There is, therefore, 1000 points in the scoring area. It is necessary that the FMs/PMs take full responsibility to comply with all the Acts/Rules applicable to factories/units and ensure that HLL is one of the law abiding company and prove it that really and truly it is so. While awarding points look for either complied or not complied and then award points accordingly. Wherever certain Acts/Rules are not applicable, appropriately those points can be reduced from the total points. A. If a Factory/unit gets 950 points (provided in Section A atleast 575 points are obtained) by complying all the provisions of Factories Act/Contract Labour Act, as per the above rating system, the factory will get A rating (Factory/unit will get a Shield for this) A Model HLL Factory/Unit for the compliance of various Acts/Rules. In this case the factory/unit, while selfaudit will take place every year, cross audit will take place once in 3 yrs. B. If a Factory /unit gets 900 points (Provided in Section A atleast 550 points are obtained) by complying all the provisions of Factories Act/Contract Labour Act, as per the above rating system, the factory/unit which gets B rating needs to comply in certain areas. In this case, this factory/unit, while self-audit will take place every year, cross audit will take place once in 2 years. But a report on total compliance should come to Head ER every year. C. If a factory/Unit gets 850 points (provided atleast 525 points are obtained in Section A) this Factory/unit which gets C rating and it can run conditionally. This fact has to be brought to the attention of Head ER immediately for further action/advise. X. If a factory/unit gets less than 850 points (or less than 525 points obtained in Section A) this factory will get X rating and it has to take steps to comply with the requirements within next 60 days. This has to be brought to the notice of Head-ER immediately. Overall Ratings A 950 B 900 C 850 X < 850 29 Human Resources Policies &Procedures Ratings in Sec.A 575 550 525 < 525

Management establishes and enforces standards for hiring the most qualified individuals, with emphasis on educational background, prior work experience, past accomplishments, and evidence of integrity and ethical behavior. 30Screening procedures, including background checks, are employed for job applicants, particularly for employees with access to assets susceptible to misappropriation. Audit Checklists & Continuous Auditing for Financial Close and Sarbanes-Oxley (SOX) Audit Procedures 7 31 Recruiting practices include formal, in-depth employment interviews and informative, insightful presentations on the entity's history, culture, and operating style. 32Training policies communicate prospective roles and responsibilities and illustrate expected levels of performance and behavior. 33Job performance is periodically evaluated and reviewed with each employee. 34Disciplinary actions send a message that violations of expected behavior will not be tolerated. 35An ongoing education process enables people to deal effectively with evolving business environments. www.exploreHR.org

Company information Company name: Business unit name (if applicable): Address: Street City State/Province Zip/Postal code Country Telephone number: Facsimile number: Fiscal year-end (month/day): Company contacts: Name Position Phone Industry information Industry classification : 1. What was total revenue for the business unit most recently completed fiscal year? 2. What were total assets for the business unit for recently completed fiscal year? for the Name Position Phone

Section 1. Business and Human Resources Strategy

the most

3. How many locations exist within the business unit? (Include all operating and administrative locations which perform HR activities.) 4. Is the business unit a publicly-held or a privately-held entity? 5. What was the pre-tax income for the business unit for the last fiscal year-end? 6. What is the company business strategy? 7. Does the company business strategy link to Human Resources (HR)? Please describe. 8. What is your companys HR Strategy? Is the HR strategy aligned with the companys strategy? 9. Who develop the HR Strategy? Do you assemble a cross-functional team to develop the HR strategy? 10. What does HR do in supporting the implementation of organizations strategy? 11. Determine how the human resources department will support strategic goal and impact organization performance? 12. Do you perform a gap analysis of current versus desired organizational behavior and performance, and develop strategy to close the gap? 13. Outline the HR departments present role, list its function and evaluate its effectiveness?

Section 2. Human Resources Policies

1. Please describe the Human Resources Policies of the company. If possible, please specify the policies for each HR function (recruitment & placement, training & development, performance appraisal, etc) 2. How and to what extent do the policies support the HR department in executing the strategy?

1. 2. 3. 4. 5. 6. 7. 8.

3. Please describe the Human Resources Program of your company. Do these programs align with your Human Resources Policies? Are your workforce formation fits the companys business objectives? Does the company have manpower plan? Section 3. How do you create a manpower plan? Do you develop a competency-based approach to staffing? Manpower Does every position have Planning competency/requirement? Do every employee understand competency/requirement needed to perform a job/position? Does this company have a clear job description for each job/position? And does each have clear competency map? What is the total number of all employees (headcount) at the business unit? managerial level supervisory level staff/operator level total : : : :

8. What is the total number of employees (headcount)for the human resources department? number managerial supervisory

staff total

Section 4. Recruitment and Selection

1. Answer the following in relation to the job offer cycle: a. What was the total number of offers made in most recent complete fiscal year? b. What was the total number of offers accepted in most recent complete fiscal year? c. What was the average time (in days) from job requisition to extension of job offer?

2. Please complete the following question with the number of entry and non-entry level positions filled internally and externally during the most recent complete fiscal year: internal a. Entry b. Non-entry 3. What were your total recruiting costs for the previous year? 4. 5. 6. 7. internal external external

How many positions (job titles) exist across the organization? How is the recruitment process? Does it eliminate unsuitable applicants early and focus on promising candidates ? How is the recruitment methodology? Does it attract desirables workers? Does it match capabilities of candidates with competency requirement for positions? 8. Do you use executive search services to help you in the recruitment area? 9. How do you describe the qualification requirements for the vacant positions? 10. Who makes the hiring decision?

1. What kind of programs does exist for employee Are they sufficient? 2. Does the company develop attractive benefit that can retain employees? 3. Do you track your staff turnover? What is your turn this fiscal year?

retention?

Section 5. Employee Retention

program over rate

1. Does the company have a clear development or training plan/strategy ?

Section 6. Training and Developm ent

2. What is the current training and development system for employees? 3. What was the total number of training hours in the previous year for all employees? Managerial : Supervisory : Staff : 4. Of the total amount of training hours offered, what percentage was: Percentage a. Formal classroom b. Computer-based c. On-the-job d. Self-study e. Off-site 5. What was the total cost for training in the previous year? 6. How do you conduct Training Need Analysis (TNA)? 7. How do you translate the TNA into a Training Program? 8. What kind of training programs offered to employees? 9. Do managers and employees find the training program relevant to their needs? 10. How do you evaluate training effectiveness? 11. Does each employees have Individual Development Plan(IDP)? How are individual development plans and needs identified? 12. Does IDP work effectively? If it doesnt work effectively, what is the cause of it?

1. What types of performance management systems use? Please describe. 2. Does it work effectively? If not, why? 3. Do you give constructive feedback to increase employees performance? 4. Do you include a customer satisfaction element in performance evaluations?

do you

Section 7. Performance Managem ent

1. What is the current compensation system in your company? Please describe 2. Do you offer compensation plans that provide a stable Section 8. base with variables linked to performance? 3. Do you develop compensation plan that support Compensation and strategic goals? Reward 4. Who design the current compensation system? Does the BOD / HR Department involve in formulating pay strategy? 5. Is the compensation system reviewed periodically? How do you evaluate your pay structure and compensation policy at least annually and adjust it when needed? 6. Do you compare the companys compensation programs with the market rates? Does the current compensation system competitive?

7. Do you set up procedures that ensure company compliance with all applicable payroll laws needed? 8. Please describe the current benefit and allowance system of your company? (describe in detail if there is differences among upper / middle / lower level of management / staff?) 9. For all employees in the organization (include both part-time and full-time employees in all departments), what is the: a. Total base pay b. Total overtime pay c. Total variable pay d. Total payroll cost

10. What is the total benefits cost (not including benefits administrations costs) for all employees
in the organization? (Include both part- and full-time employees in all departments)?

1. What is the current system for Career Development in company? Please describe. 2. Does it work based on meritocracy and fairness? 3. How does this current system apply to the employee individually? 4. What is the current system of succession planning? 5. Do succession plan exist for all critical positions? 6. What percentage of management positions at the following levels have succession plans in place? percent a. Executives b. Senior mgt. c. Middle mgt.

your

Section 9. Career Developm ent and Successio n Planning

7. What are the criteria for the successors? 8. Does the succession planning system work effectively? If not, why?

Section 10. Industrial Relation

1. Do you build a culture of inclusion that promotes labor and management as partner in business success? How? 2. What problems does the company encounter in labor relation issues? Do you have labor union? Does the labor union represent the employees well? 3. How do you solve labor relation (LR) issues? 4. Do employees give feedback to solve IR issues? Do you design grievance procedure for resolving employees problem?

5. Do the company actively communicate LR / IR procedure to all employees? 6. Do you encourage employees to play a proactive role in improving the labor-management relationship?

1. What IT systems and infrastructure do you use to

HRIS? Does it work effectively? 2. How can the IT system be used to support the Strategy? 3. How many human resource information your company have?

support your

Section 11. Human Resources Informatio n System

HR databases

Section 12. Retirement

1. What is the current retirement policy? 2. Does your company have Pre-Retirement Preparation Program for their employees? 3. Please indicate the number of employees participating in retirement plans. Managerial : Supervisory : Staff :

4. Please indicate the total contribution (in terms of percentage of total compensation) into retirement plans as outlined below: managerial a. By employee b. By the organization supervisory staff

1. Do you create an environment of open communication between employees and management. 2. How do managers and employees perceive the Section 13. effectiveness and integrity of current communication culture? Employee 3. Do you capture the creative insight of employees by Communi soliciting their ideas for improvement? 4. Do you create environment to delegate decision making cation to the lowest level possible? 5. What kind of media your organization uses to communicate to the entire workforce on a regular basis? 6. What mechanisms do you have for obtaining employee feedback on a regular basis?

Section 14. Human Resources Cost

1. How much the cost for the following items: Human resources department direct labor cost (Wages, overtime, and benefits.) Human resources department operating expenses (Supplies, training, and other locally controllable expenses not including rent, depreciation, or allocated overhead expenses.) Outsourcing fees, if any (Contract fees including annual fees and monthly operating charges.) Contracted services cost (Temporary and contract labor). Data processing equipment and facilities to support the human resources department (Include the cost of providing computer processing, software, hardware, ) Total human resources department cost (Total of questions 1 through 5)

Note from www.exploreHR.org: If you think that the tools (including this HR Audit Guideline) in our site are useful, then please share and communicate the existence of our site (www.exploreHR.org) to your friends. Also, please visit our site on a regular basis because we update site contents regularly. Thanks. Roles, Head Count, & Human Resource Information Systems (HRIS) How many employees are currently on staff? How many positions are open? How many employees are: Regular Temporary Full Time Part Time Exempt Non-Exempt Commission

What is the definition of a part-time employee (i.e., the maximum number of hours an employee may work to be considered part-time)? What is the minimum number of hours an employee has to work to be considered full-time? Is there a probationary period and if so, how long is the probationary period? Are employees aware of their status/classification? How long may an employee be temporary? How many employees have supervisory responsibility? Are there currently up-to-date job descriptions for all employees? If not, which ones dont have descriptions? Are independent contractors used? If so, how many are being used? And, for what functions? Is the 21 point test for Independent Consultants being used for classification? Have issues related to classification of employees been raised? Is there an HRIS System / how are employee records kept? [Recommend that you perform an employee file audit. Evaluate whether records are kept properly and if there are special agreements that have been made with individuals (e.g. policy

exceptions: additional vacation time, expense reimbursement, auto allowances, bonuses, pay increases, performance appraisal frequency, etc.).] Recruitment How did the work force get to be the current size? What are the procedures for hiring in your organization? What are some of your organizations future needs for personnel? What recruitment sources are used? Are current employees given appropriate consideration for promotion or lateral position changes? If your organization has several divisions/locations are employees allowed to transfer? If so, is relocation is involved, will the company provide assistance? Who does the preliminary screening of candidates? Who selects candidates for interviews? Is training provided for those who conduct interviews? How is the recruitment, screening, and selection process documented? What is the interview process that is used (e.g., individual, sequential, panel)? Are there standardized questions that are asked of every candidate? Is testing used for any positions? If yes, what position and what sort of testing? Is pre-employment drug testing utilized? Are other pre-screening instruments used (i.e., financial, criminal background checking, certification or licensure verification)? Who is responsible for other pre-screening or pre-employment drug testing? Who holds final authority to hire? Who checks references? How are the reference checks documented? Who makes the offer of employment? If the final offer is in writing, who prepares and reviews the letter? Are new employees required to sign non-compete, non-disclosure agreements? Where is the hiring paperwork generated? Who negotiates compensation packages? List the practices you believe are unique to your organization. What is the turnover rate (percent of employees leaving each year) in your organization? Has this changed over time? Who gives references for former employees? Do you offer any employee referral incentives? Documentation

Where and with whom are the personnel files currently held? What documents are held in personnel files? How are the following documented by your organization? Hiring Compensation and Benefits Transitions Paid Time Off Training Discipline Work History Work Assignments Significant accomplishments Emergency contact information Performance evaluation and performance management Termination

How long are files held and where are they stored after employees leave? What is the interface between HR and Finance? Has the work week been defined and posted / made available to employees? Is a payroll service used, and if so, which one? Does the payroll service provide all governmental employment filings? Is there training of managers and employees about personnel files, and policies and procedures for accessing them? How is Paid Time Off documented? When requests for information are made to your organization, who fills the request? Is an HRIS system being used, and if so, which one? Is this a single-user system? Are there situations where you pay travel time, on-call time, shift differentials, lead premiums, incentive pay, incentive bonus and training time? Do you provide compensatory time for your hourly employees in lieu of paying overtime? For hourly employees, what is time excluded from the computation of overtime? Training, Development and Career Management Who is responsible for new employee orientation? What are the elements of the new employee orientation program? Where and to whom do new employees go when they have questions about your organization or their jobs? Is there a formal training program for employees and managers? If so, please describe it. What training and development initiatives have occurred in your organization? How are managers and supervisors trained and prepared for their roles? What is the average length of time an employee stays with your organization? Does this vary by position type? How much does your organization spend annually (in total and per employee) on employee training and development? Does this vary by position type?

Compensation and Benefits Basic Compensation Questions Is there a formal compensation program? How are wages set? Somewhat against market Are formal salary ranges set? Are pay rates assigned to jobs reflecting the organizational hierarchy as well is industry and hiring area? If formal salary ranges are set, are they made public to employees? How are jobs rated? How frequently are jobs re-evaluated or updated? Are any salary surveys used? If so, which ones? Are pay ranges revised as a result of these surveys? How frequently? Who in your organization (what position) administers the compensation program? Are COLAs given, and if so what is the basis for the COLA? Are merit increases given, and if so, are they integrated with performance evaluation? Is there a bonus system, and if so how is it structured? How is the compensation program and total compensation package communicated to employees? What are the cultural issues or beliefs related to compensation in your organization? How is employee communication regarding compensation and benefits delivered in your organization? Health and Welfare Benefits Describe the health insurance program provided by your organization. Are dependents covered, and if so, in part or in full? Are domestic partners covered? What are the eligibility requirements for health insurance and other benefits? Which of the following health and wellness benefits are offered, and what are the limits and requirements for coverage? Dental Vision Disability Employee Assistance Program Life Insurance Other wellness benefits Flex benefit plan Other benefits

Are employees notified of their COBRA benefits? Leave of Absence Administration Do you offer leaves of absence? Describe conditions for the leave. Do you treat maternity disability leave as you would any other leave? Have you been consistent in granting leaves of absence (including paid vs. unpaid time off, maximum time allowed, opportunity to return to same or like position)? Do you have more than 50 employees in one work location/within 75 mile radius? If so, have you had 20 weeks of payroll in the previous 12 months where you had 50 or more employees? If the answer to any of the above is yes, are you in compliance with FMLA regulations? Pension and Retirement What is the pension or retirement plan? What are the eligibility and vesting periods? May pretax dollars be put into some form of deferment plan? Will plan accept rollover contributions before eligibility? Paid Time Off What holidays are paid and who is eligible for them? Is there a PTO system, or is it split between vacation and sick leave? What is the vacation schedule, and how is it earned? What is the eligibility requirement for vacation? Is there a cap to limit the amount of vacation accrued? Are employees permitted to substitute sick leave for vacation? How is unused accrued vacation treated? May employees contribute sick leave to other employees, and if so, what are the limits? Performance Management and Evaluation Describe the past and current performance appraisal system in your organization. If a performance appraisal instrument is used, please attach a copy. What type of process is used (360osupervisor onlypeer evaluationoutcome)? What type of training is used in relationship to performance evaluation? What is the role of the supervisor/manager in performance appraisal? What is the focus of performance management in your organization? How often and consistently is the process used? What is your discipline policy and procedure?

In the absence of a state policy/procedure, do supervisors communicate the problem to the employee, coach the employee on the desired change and explain the consequences if there is not improvement? Is there written communication asking for employee acknowledgement of need for change? Termination and Transition Is your organization an at-will employer? What other causes or conditions of termination of employment exists? What procedures are used for Termination for Cause Job Closure Resignation What level of approval is needed before a termination may occur? Before discharging employees do you asses the situation to determine if possible legal ramifications exist with unemployment claims, civil rights discharge, wage and hour complaints, violation of state or federal law by the discharge action, or wrongful discharge suits? Is there a formal checklist or legal review prior to termination? Are exit interviews performed for all employees who leave? What documentation is required for all employee transitions? How are references handled in your organization? Who is responsible for internal communications regarding difficult terminations? (i.e., communicating the termination to other employees.) Who is responsible for responding to unemployment claims? Are unemployment claims handled in a timely manner? Before discharging an employee is the final paycheck prepared? Legal Issues / Personnel Policies To your knowledge, are all employees appropriately classified? What personnel policies are currently being used? When was the last time these policies were reviewed and updated? Is there disparity between policies and practices? Who has organizational responsibility for legal or employment questions? Is harassment training regularly provided? How are employee grievances dealt with? New Hire Reporting: If in multi-state, how is this done. If a single state how done? Who does it and by when? Are I-9s collected and where are they stored. When was the last audit performed? Are all Federal and State required posting displayed in a place visible to all employees?

 Has the company accepted any work from the federal government as contractor or subcontractor? If so, is the company larger than 50 employees? What is the annual value of the contract or subcontract? If the company has federal contracts, are you compliant with additional posting requirements (Walsh Healey Act and Davis Bacon Act for Public construction contracts). If more than 15 employees are you compliant with Title VII of the Civil Rights act and ADA (postings and policies)? If you have more than 20 employees are you compliant with Age Discrimination in Employment (ADEA) and Consolidated and Omnibus Benefits Reconciliation (COBRA) provisions and postings? Of you have more than 50 employees are you compliant with Executive Order 11246 (federal contracts or subcontractor) or Family and Medical Leave Act (FMLA) or Vocational Rehabilitation Act (federal contractors or subcontractors with contracts exceeding $50,000)? If more than 100 employees do you comply with EEO-1 form filing annually? Safety and Health Are OSHA Form 200s maintained and posted each February (related to worker injury)? Are employees aware of the procedure for reporting all work-related injuries? Is the Employers First Report of Injury form (WC-1R85) filed with the workers compensation carrier for every on-the-job injury, no matter how minor? Are facilities and operations reviewed periodically to assess that a healthy and safe work environment has been maintained? Are hazardous chemicals used or are employees exposed to hazardous chemicals on a work-site? If so, is there employee training regarding potential exposure and safe practices? Company property Is company property issued to employees? What documentation is utilized when providing equipment? Are employees advised of their responsibilities to return equipment and to keep in good use? Other Are there regular employee surveys conducted to obtain employee feedback? Are there regular team meetings conducted in each operational department? Are there company-wide meetings? How are announcements regarding employee issues addressed? Who is responsible for publishing them and what methods are used? Is there a disaster recovery plan for the organization? What employee safety measures are in place for each facility?

Does each manager have a list of their employees home numbers and contact information? Is the emergency contact information for each employee up to date and refreshed each year? Is emergency contact information available to management? What attorneys are used for the company and in what capacity?

Archive: An HR Audit

An HR Audit This audit--used by the Commonwealth of Virginia--allows you to examine your recruiting, training, benefits, and labor relations policies. Department Organization Questionnaire Explanation of Department Organization Questionnaire Human Resources Planning/Organizational Development Questionnaire Explanation of Human Resources Planning/Organizational Development Questionnaire Recruitment and Selection Questionnaire Explanation of Recruitment and Selection Questionnaire Compensation Questionnaire Explanation of Compensation Questionnaire Employee Benefits Questionnaire Explanation of Employee Benefits Questionnaire Employee Relations and Communications Questionnaire Explanation of Employee Relations and Communications Questionnaire Personnel Policies/Workplace Rules Questionnaire Explanation of Personnel Policies/Workplace Questionnaire Equal Employment Opportunity and Regulatory Compliance Questionnaire Explanation of Equal Employment Opportunity and Regulatory Compliance Questionnaire Training and Development Questionnaire Explanation of Training and Development Questionnaire Labor Relations Questionnaire Explanation of Labor Relations Questionnaire Safety, Health and Wellness Questionnaire Explanation of Safety, Health and Wellness Questionnaire

Department Organization Questionnaire The Human Resources Department is structured, organized and equipped to provide overall strategy, direction and effective management of the organizations human resources function to accomplish organizational objectives.

1. Is there one department or function within the organization that is responsible and accountable for planning, establishing, overseeing and coordinating all human resource policies, systems and services for all 11 major categories? 2. Does the senior-level human resources manager report to the same level position as all other major staff and line departments within the organization? 3. Does the senior human resources manager participate in addressing the organizations strategic, tactical and policy issues? 4. Does the senior human resources manager integrate all HR activities with the organizations strategic business plan. 5. Does the Human Resources department demonstrate a clear understanding of organizational and customer needs? 6. Are HR services and functions aligned and prioritized to organizational and customer needs? 7. Has a department mission statement been developed explaining its purpose within the organization? Has this mission statement been communicated to all management personnel? Has this mission statement been communicated to other customers throughout the organization? If so, to whom? How? 8. Does the Human Resources department take a lead in striving for a more empowered and participative work force (productivity improvement, cost reduction, quality improvement and improved quality of work life programs?) 9. Has a Human Resources department organization chart been published and distributed? If so, to whom? Does the organization chart clearly define functional responsibilities and whom customers can contact for service? 10. Are job descriptions established for all HR personnel stating major job objectives, responsibilities and accountabilities? 11. Do all HR personnel understand their respective roles and relationships to others in the department? 12. Are department personnel cross-trained to perform duties outside their major areas of responsibility? 13. Do they work on team and department task force projects? 14. Are departmental personnel professionally and technically competent? 15. Do they serve as internal consultants to management as well as counselors to employees? 16. Does the department staff work well as a team?

17. Are they readily accessible to all customers? 18. Are department personnel provided adequate training and professional development to meet organizational challenges and demands? 19. Is involvement in professional and technical groups encouraged? Does the department subscribe to major technical and professional journals? 20. Is there a credible performance appraisal in place clearly stating mutually established goals and objectives for department personnel? 21. Are human resources staff compensated according to market standards? Are they compensated based on comparable positions within the organization? 22. Does department staff effectively balance organizational with employee needs and act as an intermediate for both? 23. Is the Human Resources department results-oriented (i.e., measuring cost-effectiveness and the bottom line results of human resources programs)? If so, is it attentive to the bottom line and does it demonstrate a business orientation? 24. What is the span of control of the top position within the departments (i.e., how many and which positions report to it)? Are supervisors or managers reporting to other mid-level managers? How many employees are in the Human Resources department? What is the ratio of HR department staff to all employees served? How does this compare to the staffing levels of other comparable organizations offering similar services? 25. Are HR needs and programs accounted for in the organizations budgeting process? 26. Does the organization make plans for ensuring that HRs future needs are met? 27. On a scale of one to seven (seven being the highest and four being adequate), how would the Human Resources team rate the overall effectiveness and structure of your Human Resources department? 28. On the same one-to-seven scale, how do you think other department heads would rate the overall effectiveness and structure of the HR department? On the same one-to-seven scale, how do you think the employees would rate the overall effectiveness and structure of the HR department? Explanation of Department Organization Questionnaire For each of the 11 categories, the Self-Audit questions are designed to rate how well the HR department achieves the purpose of the category definition stated at the top of the questionnaire: Is the HR department structured, organized and equipped to provide overall strategy, direction and effective management of the organizations human resources function to accomplish the organizations objectives?

Questions one through nine explore how department leaders achieve organization objectives, are part of managements strategic planning effort and assist in making decisions that affect bottom-line results. These questions both help ensure that HRs efforts are in accord with customer needs and suggest ways HR teams can take the lead in helping customers get the most out of the organizations human resources. Questions 10 through 26 address communicating department functions and services to all customers, staff objectives and internal relationships, staffs dual role as internal consultants to management and counselors to employees, staff competence and flexibility, cross-training, balancing employee needs with business needs and a bottom-line results orientation. The components of question 24 also relate to staff size, structure and span of control. Industryspecific standards for staff size are available from a variety of professional publications, such as the Saratoga Institutes "HR Effectiveness Survey" and national and regional statistics compiled by the Bureau of National Affairs (BNA). Any surveys that relate specifically to your type of organization will make that benchmark more credible. Questions 25 and 26 address resources and planning to ensure the delivery of required services.

Human Resources Planning/Organizational Development Questionnaire The process of identifying and providing ways to fulfill the organizations developmental and human resource needs. 1. Is there one position accountable for reviewing the organizations human resources requirements? 2. How is this review carried out? Formally/informally? (please describe) 3. How often is this analysis updated (e.g., yearly, every two years, three years or more)? 4. Do your projected needs include the following considerations? Availability of outside workforce demographics (age, sex, minority classification, education, skills level, occupations, etc.) Anticipated changed in your organizations technology, processes, products/services and markets. Personnel needs these changes will require (e.g. new skills, education, knowledge and abilities). 5. Which sources outside the organization provide these demographics? 6. What sources within the organization provided this information? 7. To whom are these projections communicated? How often?

How far into the future? 8. Is there one position accountable for reviewing and assessing the HR departments skills, education, interests and needs? 9. How is this assessment carried out (formally or informally)? (Please describe.) 10. How often is this assessment updated (e.g. yearly, every two years, three or more years)? 11. To whom are this assessment and any projections communicated? How often? How far into the future? 12. Are this assessment and projections used for training and development? 13. Are this assessment and projections (workforce requirements) used for career planning (matching organizational and individual skills, abilities and needs)? 14. Is there a formal career planning process in place? 15. Is there a career counseling system to identify individual skills, interests and needs, and which offers inplacement and/or developmental assistance? 16. Are high-potential employees identified for key positions? If yes, is there a succession plan to target high potential employees? 17. Are human resource projections (i.e., numbers, job classifications, skills, knowledge, ability and education levels) identified in the recruitment plan? How far into the future? 18. If the human resources plan calls for restructuring or downsizing, are there strategies set to deal with displaced employees? Is outplacement assistance offered? Are there strategies to support remaining employees? 19. Are the human resources projections a part of the organizations budgeting process? 20. Does the organization have plans for ensuring its development and human resource needs are met? 21. On a scale of one to seven (seven being high and four being adequate), how do you think the HR staff rates the human resources planning/organizational development process? 22. On the same one-to seven scale, how do you think other departments would rate the human resources planning and organizational development process now in place? Explanation of Human Resources Planning/Organizational Development Questionnaire Affirmative answers to all the questions in this section means the organizations development and human resource needs are being met. The emphasis is on connecting organizational development and workforce need projections with internal and external workforce skills.

Questions one through seven deal with influences on the planning process) changing workforce, markets and customers, products, services, technology/skills base and identification of external supply). Questions eight through 17 deal with internal assessment and availability of these same considerations: organizational development activities in management development, training, career and succession planning to satisfy workforce demands within the organizations. If the internal labor supply is greater than the need, then the tougher issues of resource reallocation have to be addressed (questions 18 and 19). Human resources planning is particularly important for emerging, rapid-growth and high tech businesses. Mature businesses in need of new products, services, markets, acquisitions or divestitures must also plan to identify, attract or reallocate the talent necessary for revitalization and continued competition. Heres a little piece of information about that technological revolution, a headline from an article reporting on a study by Worldwatch Institute back in 1980: Micro Electronics Seen Producing Sweeping Industrial Change. Thats certainly old news about the future, but theres a reason to go back to this story to remind us they told us what was going to happen. Most of us just didnt pay attention.

Recruitment and Selection Questionnaire The process providing timely recruitment, selection and placement of high-quality employees to satisfy the organizations staffing requirements. 1. Is there a policy in place stating the organizations philosophy on recruitment and selection? Does the policy contain procedures to guide managers through the recruitment and selection process and describe how to get help? 2. Is there one position within the organization accountable for overseeing and coordinating recruitment and placement? RECRUITMENT 3. Is there a formal process in place for identifying job vacancies? 4. Briefly describe the process from needs identification through final approval authorization. 5. Is recruitment done proactively from a planning mode (i.e., projected workforce plan) as well as reactively to immediate replacement and new job openings? Is recruitment linked to human resources planning (projected workforce requirements)? 6. Is a job analysis conducted for each position? Does the job analysis accompany the hiring authorization? Does the job analysis accurately identify the key objectives and responsibilities of the position? Does the job analysis accurately identify the essential can do skills needed (i.e., skills,

abilities, knowledge, education and experience)? Does the job analysis accurately identify the essential will do skills needed (e.g., leadership, interpersonal, entrepreneurial, communication and good attitude)? 7. Is consideration given to internal candidates for all or some job openings before outside recruitment begins? If some positions are determined to be filled from within, how is this determination made? 8. Is there a formal job posting procedure in place? If so, does the job posting contain the job objectives, needs and requirements cited in the job analysis (#6 above)? 9. Are recruitment strategies (methods to obtain qualified candidates) set before active recruitment begins? Who participates in the strategy development? Does this strategy include affirmative action and diversity needs? 10. What kind of recruiting sources does your organization use and for what positions: Newspaper sources? Professional journals/periodicals? College recruiting? Special events recruitment (e.g., job fairs and expos)? Community referral agencies (e.g., state employment and training offices)? "Quasi-search" methods (e.g., hourly rate paid to recruiting professionals for targeting candidate sourcing or use of professional candidate researchers)? Employee referral? Internal computerized applicant database? Professional networking (e.g., associations)? Direct mail recruitment? Personal networks (e.g., local competitors, customers, suppliers, outplacement firms or industry research)? If so, please give examples: 11. Does your organization measure the effectiveness as well as the costs of these recruiting

sources? 12. To whom are these performance measures and recruiting costs communicated? SELECTION 13. Does the HR department perform all initial screening of candidates? 14. Are candidate telephone interviews, teleconferencing or video screening conducted before personal interviews? 15. How many candidates are typically interviewed before filling a position and at what levels? 16. Who participates in the interview and at what intervals? How many people are typically involved in the interviewing process? Are panel interviews used? Who makes the final hiring decision? 17. Are hiring managers trained in objective selection (e.g., interviewing techniques, positionrelated questions and legal implications)? 18. Are reference checks conducted on all candidates? Who performs the reference checks? 19. Are tests or personality profiles used in the selection process? Are they professionally validated? 20. Are drug tests administered to all new employees as a condition for hire? 21. Does the organization compare the number of job openings and workforce projections with the HR departments recruitment and selection capacity? Are peak and low hiring cycles identified? 22. Has the organization examined or evaluated any of the following alternatives to satisfying workforce requirements: Project or contract outsourcing? Temporary placement? Internal temporary placement pool? Part-time employment and job sharing? 23. Are all employment costs accounted for in the organizations budget? 24. On a scale of one to seven (seven being the highest and four being adequate), how do you think the HR team would rate the effectiveness of the recruitment and selection process? 25. On the same one-to-seven scale, how do you think departments would rate the

effectiveness of the recruitment and selection process? Explanation of Recruitment and Selection Questionnaire The purpose of the Recruitment and Selection questions is to improve critical staffing needs in a timely manner and with quality candidates. Questions three through 12 examine how the company attracts job candidates. Question ten deals with finding candidates. Cost-benefit analyses of all hiring sources (questions 11 and 12) will tell you where to place your recruiting energies and financial resources. Questions on the selection process (13 to 20) may be more important to government agencies and contractors because of highly regulated selection criteria, affirmative action and diversity implications. Fiscal constraints and regional preferences may also restrict government staffing professionals to the most inexpensive sources, regardless of their results. What makes a successful manager is the ability to influence positive behavior and to hire the best talent. HR professional counseling, guidance and training on effective interviewing and selection are essential to help managers make the right hiring decisions. It is also essential that the selection criteria be equally and consistently applied to all applicants. Companies efforts to reduce both their workforce and their fixed labor costs have resulted in less costly ways to satisfy workforce requirements. These include outsourcing and temporary workers, which transfer costs on a variable basis. This is why Manpower, Inc. has become the largest employer in the U.S. today. If your organization uses these methods, be aware of possible long-term quality problems resulting from reduced commitment and lack of company pride.

Compensation Questionnaire A system of evaluating jobs and compensating employees to ensure that the organization attracts, retains and motivates employees to accomplish organizational objectives. 1. Does the organization have a policy clearly stating its position on employee compensation? Is this policy linked to the organizations management philosophy on compensating employees, and does it reinforce the values of the organization? Is the organizations compensation philosophy clearly communicated to all employees? Is it clearly supported and monitored by management? 2. Does the compensation policy contain procedures to guide managers on how to implement the compensation system? 3. Is there one position within the organization accountable for overseeing and coordinating all compensation-related activities (job evaluation, job classifications, job descriptions, salary administration, performance appraisal and compliance with all governmental pay regulations, including FSLA, ADA, compensable time and EEO regulations)? 4. Is there a process for keeping the organization aware of compensation paid for comparable job functions in the region? Compensation paid to comparable exempt job functions nationwide?

Compensation paid to comparable exempt job functions industry-wide? How frequently are there market studies performed? 5. Is your pay plan in agreement with the compensation philosophy of the organization? Are pay ranges wide enough so as not to force vertical pay growth? Are pay ranges wide enough and procedures available to reward additional knowledge, skills, abilities and responsibilities and encourage lateral career growth? Do the intervals between ranges clearly define the differences in positions assigned to those pay ranges? Are pay differences great enough to ensure that a subordinate is not paid more than his or her supervisor, including overtime payments? 6. Are all jobs classified using a consistent job analysis? 7. Are all job classifications reviewed for gender and minority equity? Are all comparable jobs reviewed for possible evidence of uneven treatment for females or minorities? 8. Does your organization have an employee performance appraisal system? Does the performance appraisal establish clear objectives, expectations and performance measurement criteria linked to that specific job? Does the performance appraisal provide objective, interactive and meaningful feedback on performance? Do performance objectives clearly support departmental and organizational objectives? Are these objectives and measurement criteria discussed with the individual being appraised? Do the employees have clear and direct control over the outcome of their appraisals? Do performance appraisals reflect an employees positive behavior, as well as results? Do performance appraisals include a written plan to improve employees knowledge and skills? Are pay plans linked to rewards for measured performance? Is the performance rating/pay adjustment reviewed by someone in a position higher than that of the rater before discussion with the employee and implementation? 9. Does your organization have a pay-for-performance (merit-based) system? Does it work as intended, or is it a tool for compensation adjustment?

Does an outstanding performance merit an outstanding reward? 10. Are compensation increases budgeted throughout the organization and are guidelines for distribution clearly communicated? Are ranges and limits clearly defined (e.g., pay increments linked to performance measures)? Is distribution of compensation among departments reviewed by management for consistency and equity before awarding increases? 11. Are other performance compensation awards (results sharing) appropriate and in place? Profit-sharing awards based on organization-wide profitability. Special recognition awards, e.g., bonuses for meeting a combination of results criteria, including department contribution performance, major productivity increases, sales and profit increases, and cost savings. Group or team productivity based on team performance and distributed by team members. Gain-sharing awards based on local performance. A special pay-for-knowledge system, e.g., payment for increased development of employee knowledge, skills, abilities and/or responsibility (allowing a broader job design without changing assignments). 15. Does your organization have the capacity for a compensation strategy to attract, retain and motivate employees? 16. Are compensation administration costs included in the budget? 17. On a scale of one to seven (seven being highest and four being adequate), how do you think the Human Resources department would rate the effectiveness of the compensation system? 18. On the same one-to-seven scale, how do you think your internal clients (other departments and employees) would rate the effectiveness of the compensation system? Explanation of Compensation Questionnaire It is important for the organization to distribute a clear policy statement on its compensation philosophy to its employees. Guidelines are important to ensure consistency and equity in the reward systems. Compensation is probably the most objective aspect of HR management. You should be aware of this when scoring questions one through seven. Compensation methods can help motivate the fulfillment of organizational objectives. For this reason, compensation experts receive higher pay than other HR professionals. Major consulting firms specialize in this area because compensation affects the organizations bottom line. If compensation alone drove performance, companies with big payrolls would always be the most profitable, but that isnt the case. In fact, eliminating higher paid positions is the trend. Compensation programs should motivate and reward people for accomplishing organizational objectives. Companies need to find new ways to reward individual, team and other group performance.

Reward systems should take into consideration self-directed work teams, cross-functional problem-solving teams, matrix management, taking on added work responsibilities and more risk taking. If the organization wants a closer correlation between compensation and quality work, then the recognition of team performance is critical. Questions eight through 11 deal with these incentive issues.

Employee Benefits Questionnaire Programs by which employees receive noncash compensation to ensure that the organization attracts, retains and motivates employees to accomplish organization objectives. 1. Does the organization have a clear policy regarding employee benefits? 2. Is there one position within the organization accountable for fairly and consistently implementing employee benefit programs and ensuring compliance with governmental regulations, such as ERISA, COBRA, EEO and the Family and Medical Leave Act? 3. Is the organization current on competitive employee benefit practices, such as childcare, flextime, job sharing, vacation/sick time, time-off provisions and health plan alternatives? HEALTH CARE COST CONTAINMENT 4. Is there a process in place to contain medical costs while offering quality health care to employees? 5. Do you periodically gauge employee satisfaction with the benefit plan in terms of customer service, timeliness, claim management and accuracy? 6. If employee dissatisfaction is high or costs are out of control or noncompetitive, do you put your benefit plans out to bid? How often does this occur? 7. Does your medical cost containment review cover the following: A. Have you analyzed both of the following alternative health care programs for their cost containment processes, including services offered, accessibility, quality of care and cost? HEALTH MAINTENANCE ORGANIZATONS (HMOS): What are enrollment numbers for the past three years. (Rapid enrollment rates ma result in poorer service.) Is the HMO accredited by the National Committee for Quality Assurance (NCQA)? Were any conditions attached to the accreditation? What is the public perception of the HMO (has it received bad press)? Have organizations similar to yours fared well under this HMO? (Ask for a list of clients and call some of them.) What are the exclusions or limitations on procedures, such as transplants, rehabilitative

procedures and mental and nervous disorders? PREFERRED PROVIDED ORGANIZATIONS (PPOS): In addition to all the questions for HMOs above, what is the ratio of network vs. non-network charges? Do employees accept the network doctors? B. Has HR reviewed the following administrative controls: In-house company data on premiums paid and claims processed? Retention provisions of carriers, such as rebates or favorable rate consideration for retention of company funds? More favorable stop-loss arrangements with a carrier? Encouraging employees to report errors in medical bills? Health-care spending accounts and changing rules? Nonduplication of benefits instead of traditional coordination of benefits? Initiating a probationary period before health coverage begins? C. Has HR reviewed basic cost management programs, including the following: Increasing deductibles, coinsurance responsibility or copayment amounts? Requiring second opinions for surgery? Instituting pre-admission testing and certification? Concurrent hospital stay reviews? Closely managing chronic or costly illnesses? Patient auditing of hospital bills? Requiring employee plan usage data from health care carriers/administrators? D. Has HR reviewed employee health promotion and education programs? E. Has HR communicated with health care providers to review customized plan options and cost containment measures? 8. Are the costs of employee benefits regularly calculated and compared to national, industry and local data? 9. Are vacation and sick leave accruals analyzed for purpose as well as cost consideration?

10. Are there programs to control absentee costs? 11. Are there programs to curb sick leave abuse? 12. Are unemployment compensation costs analyzed for cost savings? 13. Are pension plans reviewed and employees counseled on win-win pension options that will save the organization money? 14. Does your organization offer retirement counseling to employees? 15. Are there benefits to extending the retirement age? 16. Should changes in long-term disability payments be considered? 17. Does your organization regularly communicate the benefits it provides as well as emphasize the companys contribution to employee benefits? 18. Does your organization have the capacity to provide necessary employee benefits and address cost-containment issues that affect profitability? 19. On a scale of one to seven (seven being the highest and four being adequate), how do you think the Human Resources department would rate the effectiveness of employee benefits programs? 20. On the same one-to-seven scale, how do you think internal clients (department heads and employees) would rate the effectiveness of the employee benefits programs? Explanation of Employee Benefits Questionnaire Employee benefits are necessary to attract and retain quality employees. Few organizations, however are able to find new ways to contain costs and use benefits as an incentive to improve employee productivity. Health care cost containment is covered in questions four to seven. Aggressive negotiations with carriers, a closer look at administrative controls and cost-benefit analyses must be routinely carried out if an organization wants to convert high costs into increased profits. An annual review of benefit plan vendors should be conducted, especially for health care services which consume a large portion of expenses. The remarketing of a benefit program, however, should take place no more frequently than every three to five years, unless there are serious concerns about rates, service or accessibility. More frequent remarketing of a benefit plan damages the credibility of the employer, in terms of seeming disinterested in a long-term relationship. In an insured arrangement, the vendor will be left holding the bag on runout claims. Pay particular attention to cost-management programs under question seven. Spending more time on these details will result in better claims management. Question 7C should answer the following questions: 1. How were charges distributed between employees, the employer and other payers? 2. What types of services were used: hospital (inpatient, outpatient, emergency room), physicians services (inpatient, outpatient), lab, x-ray, durable medical equipment, supplies, surgical center, etc. Any category labeled other on a report should account for no more than 5% of the total or require a detailed explanation. 3. What types of illnesses did employees experience? There should be at least 15 major diagnosis categories used on the report. 4. What are employees demographics? You are entitled to this information. By monitoring how the healthcare plan is used, it is

possible to decrease claim costs. Some negotiation with the carrier/administrator may be necessary to obtain reports in a meaningful format. Because health care accounts for the largest portion of most benefit packages you should strive to raise your performance standards as an employer by applying your business strategies to health care management. According to David W. Kempken, Executive Director of Benefits for Chrysler Corporation, you should re-examine your standards for plan design, administration, communication and provider relationships with the goal of "best practices." Nonhealth-related employee benefits, such as vacation time, sick leave, pension formulas, retirement incentives, holidays and unemployment compensation tend to remain untouched. There is literature which addresses these issues. They could save your organization quite a bit of money. Benefits can increase productivity by meeting lifestyle and family demands in a diverse and changing work force. Daycare centers, flextime, work-at-home options, alternate leave provisions, cash options and other benefit bartering arrangements may improve worker productivity. The principle that a happy worker is a more productive worker still holds. Likewise, funding benefits that do not meet the needs of the workforce are both counterproductive and unprofitable. A U.S. Chamber of Commerce survey (March 31, 1995) cites useful benefit cost benchmarks: total benefit costs as a percentage of payroll average 41.3% nationwide. Medical benefits account for 11.1% of the total. Employee Relations and Communications Questionnaire This section audits programs that govern employee treatment, communications, support systems and services that encourage greater employee satisfaction, motivation and productivity. 1. Is there one position within the organization accountable for overseeing and coordinating all employee relations and communications activities? COMMUNICATIONS 2. Are there policies that state the organizations employee relations philosophy governing all conditions affective employees? 3. Do these policies state expected behaviors of employees? 4. Are these policies condensed into an employee handbook? 5. How and to whom is the employee handbook distributed? 6. Is the employee handbook information reviewed by legal counsel to satisfy all laws affecting employment, personnel relations, working conditions, employment at will, implied employment contracts and disclaimer issues? 7. How frequently is it updated? 8. Is there a formal orientation for new employees? Are follow-up employee orientations scheduled? 9. Are employees given the opportunity to exchange information with superiors as well as assimilate information being transmitted from the top down? 10. Are there forums that allow for regular interaction and information exchanges between employees and management? If so, briefly describe:

11. Are there forums in which racial and ethnic minority concerns are conveyed to management with the intent of affecting positive changes? 12. Does your organization engage in employee opinion surveys? If yes, how frequently? Do you communicate survey results to employees? Is there a demonstrated commitment to introducing changes based on survey data? EMPLOYEE TREATMENT 13. Are employees afforded a process where both sides of a complaint are heard and a decision is rendered fairly? 14. Are disciplinary procedures and rules of conduct explained in an employee handbook or other form of notice? (Remember, the purpose of discipline is to have people behave in an acceptable way.) 15. Are progressive forms of discipline expressly cited? Are they consistently applied? 16. Are fairly competitive employee benefit programs in place? 17. Is there a program that provides for management and employee participation in the discipline process? 18. Are there opportunities for employee professional growth? 19. Does the organization demonstrate, emphasize and reward leadership to ensure success and satisfaction in the organization? 20. Using a one-to-seven scale how do immediate manager practices rate in terms of daily supervision and management of employees? 21. Has the organization demonstrated reasonable employment security? 22. Is direct compensation/pay reasonable, equitable and competitive? 23. Are employee and team accomplishments, special efforts and contributions recognized in addition to direct pay? 24. Does the organization encourage teamwork and employee involvement? STATISTICS 25. What is the organizations monthly absentee rate? Do you consider this high or low? In what departments/areas are absences particularly high and why? 26. What is the annual turnover rate (average position replacements per year)?

Do you consider this high or low? 27. Are exit interviews conducted? By whom? Who is given feedback from the exit interview and how is it used? 28. Are demographics of turnover data analyzed? How is this analysis used? What has management done in the past two years to reduce turnover? 29. Has the organization attempted to project future needs in terms of an increase in working mothers, child care, single parents, elder workers, a more diverse work force, etc.? 30. Has the organization made plans to meet its future employee relations needs? 31. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources department would rate the effectiveness of the organizations employee relations and communications programs? 32. On the same one-to-seven scale, how do you think your internal clients (other departments and employees) would rate the effectiveness of the employee relations and communications programs? Explanation of Employee Relations and Communications Questionnaire This section covers employee satisfaction. This critical aspect of human resources management is broad in scope, complicated and difficult to measure. Since almost half of our waking hours are spent at work, an interesting and pleasant work environment is essential to retain quality employees. The questions in this section are designed to help you understand and deal with intangible employee relation issues. These include communication, how employees are treated, support systems and those conditions of employment conducive to employee satisfaction, motivation and productivity. Three major issues are covered here: (1) communication, (2) employee treatment and (3) statistics as a gauge of employee satisfaction. Policy statements, newsletters, bulletins, messages and information handbooks help the employer communicate with the employee. The employers willingness to commit to its philosophy in writing sets the stage for a candid dialogue. A standard of openness displays a sense of trust. While employees may not read every word, these communications help the employee identify with the company and its success. Most important in this section are the responses to questions nine and ten. It is important for your organization to have scheduled an interaction with employee groups and representatives for discussion of issues of mutual concern. How the company treats employees is certainly important to them. It is also crucial to the organizations well-being. Bad or inconsistent treatment is the number one cause of voluntary turnover. Money cant compensate if basic human needs, such as dignity, respect, justice and social interaction, are lacking. An increase in work hours, coupled with a decrease in the quality of work life, loyalty and security issues, is responsible for a resurgence in union membership. The unionization of white-collar employees and frontline workers is increasing, particularly in services,

such as government, hospitals, insurance and financial firms. How the employees are treated should be of utmost concern to you. Policy guidelines help managers make decisions concerning specific workplace issues. From the employers point of view, personnel policies and procedures which guide managers to do their jobs better are extremely valuable and help the organization achieve its objectives.

Personnel Policies/Workplace Rules Questionnaire Statements of guiding principles intended to translate organizational objectives and means into operational terms and help managers make decisions. 1. Are there written procedures governing all conditions of employment and policies clearly stating the organizations human resources philosophy? 2. Are there procedures for monitoring the organizations compliance with personnel laws and regulations? 3. Are there policies and procedures published and adequately communicated? How? (please describe) 4. Is there one position within the organization accountable for overseeing the development, coordination and distribution of these policies and procedures? 5. Do these policies reflect the organizations desire to be an "employer of choice"? 6. Do these policies and procedures contribute toward the organizations mission and objectives? 7. Do they balance empowerment of staff with sufficient controls to ensure achievement of the organizations mission and objectives? 8. Are managers guided by policy as they make decisions from hire through separation of employment? 9. Are managers given the opportunity to provide input to policy drafts before they are formalized? 10. If there are other rules outside the organizations stated policies, such as Civil Service rules, are they communicated to and understood by the managers? If yes, does management periodically review such outside rules to see if they reflect the organizations current needs? 11. Is policy consistent in purpose, background and procedures for implementation? 12. Are effective dates of policies cited, and do they specify any previous policy statements they supersede? 13. Are all policies approved at the highest appropriate level of the organization before being adopted? 14. Are personnel policies condensed into an employee handbook? 15. Is the current personnel policy manual periodically reviewed by legal counsel to reflect new laws affecting employment, personnel relations, working conditions, employment at will,

implied contract and disclaimer issues? 16. Are new policies that may have legal implications also reviewed by legal counsel? 17. Does the organization regularly assess existing policies for necessary replacement or amendment? 18. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources department team would rate the effectiveness of the organizations policies and procedures? 19. On the same one-to-seven scale, how do you think your internal customers (other departments) would rate the effectiveness of the organizations policies and procedures? Explanation of Personnel Policies/Workplace Rules Questionnaire Personnel policies and workplace rules are intended to make organizational objectives reality. They should guide managers to do their jobs better and help them make decisions concerning workplace issues. Policies and procedures should cite their bases and resources to help managers make informed decisions. Personnel policies should also be flexible enough for managers to exercise discretion. In a flattening organizational structure, policies and procedures can support delegating decisions. They should serve as a basis for managerial direction, accountability, consistent and effective behavior and compliance monitoring. The policy manual should serve as a guide for the department to maintain accountability for managing and delivering human resource services effectively. A balance between staff and managerial controls will ensure the most likely achievement of the organizations mission and objectives. Principles of teamwork and recognition of employees input should be emphasized as the most important components of an effective human resource philosophy. Here is a sample human resource philosophy. The XYZ Company recognizes that employees are its most valuable resource. The successful evolution of the organization depends on the support and performance of all employees in achieving its stated mission. Accordingly, the XYZ Company will strive to become an employer of choice by providing those programs and services which support employees in the performance of their jobs, enhance the spirit of teamwork and quality of life, and provide for employee well-being from hire through separation from XYZ Company.

Equal Employment Opportunity and Regulatory Compliance Questionnaire Policies and practices to ensure compliance with equal employment opportunity laws and other governmental regulations as they relate to recruitment, selection, placement, compensation and treatment of employees while enhancing the validity and effectiveness of related personnel systems. 1. Does your organization have a stated policy covering equal employment opportunity as well as its compliance with all applicable discrimination laws? 2. Does your organization explicitly state its position against discrimination because of: Race? Color?

Sex? Religion? Sexual orientation? Physical/mental handicap or disability? Age? National origin? Ancestry? Marital status? How is this policy communicated inside and outside the organization? 3. Is there one position within the organization accountable for overseeing and coordinating EEO policies and procedures? 4. Is there a review process to keep the organization up-to-date regarding regulatory issues and compliance? 5. Are job openings analyzed for job-related skills, education, knowledge and ability requirements? 6. Are selection criteria based on these job-related requirements? Can all hiring decisions be defended against these criteria? 7. Are all tests used in the hiring process valid? 8. Are all hiring managers trained in nondiscriminatory hiring practices? 9. Has the employment application been reviewed to ensure that it meets all equal employment opportunity requirements? 10. Is there an internal process for employees to register complaints concerning discrimination and harassment? 11. Does your organization have an explicit policy against sexual harassment? Has a procedure to resolve sexual harassment claims been implemented? 12. Do you offer training to management on sexual harassment awareness and legal requirements? 13. Does your organization conform to all provisions of the Americans with Disabilities Act (ADA)? Does your organization have a policy statement that prohibits discrimination against qualified handicapped or disabled individuals? Do your organizations job descriptions distinguish between those qualifications, physical

requirements, duties and responsibilities which are essential and those which are nonessential? Are policy manuals, handbooks, recruitment notices, job postings and advertisements consistent regarding qualified individuals with a physical or mental impairment of a major life activity? Can disabled individuals apply for job openings and gain access to the premises? Is there a review process for employee restrictions and reasonable accommodation requests? 14. If you are a Federal or State government agency, does your organization conform to the requirement of the Veterans Preference Act? 15. Does your organization have a government supplies/service contract or subcontract of $50,000 or more in any 12-month period? If yes, does it have an Affirmative Action Plan (AAP) in place for each of the organizations establishments? 16. Are all AAPs developed according to the Office of Federal Contracts Compliance Programs (OFCCP) guidelines, including: Affirmative Action Plan Narrative? Workforce Analysis? Job Group Analysis? Availability Analysis? Utilization Analysis? Goals and Timetables? 17. Does your organization conduct a self-EEO/AAP audit on a periodic basis? 18. Does your organization have a hiring procedure regarding the examination of documents to verify applicant identity and authorization to work in the United States as spelled out in the Immigration Reform and Control Act (IRCA)? 19. Does your organization have a Federal contract or subcontract of $25,000 or more? 20. If yes, does your organization fulfill the following requirements of the Drug-Free Workplace Act of 1988?: Publish a policy statement prohibiting the unlawful manufacture, distribution, possession or use of a controlled substance in the workplace and specifying what actions will be taken against employees who violate the policy? Provide a copy of the policy to employees working under the contract? Provide guidance/training on policy requirements?

Have a drug/alcohol-free awareness program? Notify employees they must, as a condition of employment, notify the employer if they are convicted of a criminal offense occurring in the workplace within five days after the conviction? 21. Does your organization comply with the requirements of the Omnibus Transportation Employee Testing Act of 1991? 22. Does your organization provide programs for drug/alcohol rehabilitation? 23. Does your organization conform to the Family Leave Act? 24. Does your organization comply with requirements set forth in the Occupational Safety and Health Act (OSHA)? 25. Does your organization conform to the provisions of Employee Retirement Income Security Act of 1974 (ERISA)? 26. Has the organization assessed or met current and emerging legal issues relating to equal employment and other governmental regulations? 27. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources department would rate the organizations performance in the area of equal opportunity and regulatory compliance cited above? 28. On the same one-to-seven scale, how do you think employees would rate the organizations compliance performance? Explanation of Equal Employment Opportunity and Regulatory Compliance Questionnaire Governmental regulations affect every aspect of personnel management. Regulatory compliance is one of the foremost concerns in human resources management. Knowledge of employment law provides job security to the HR professionals who specialize in this area. Human resources management literature, seminars and government publications cover these legal issues. Many HR professionals--no matter what their specialty--have of necessity become paralegals. Questions in this section have been designed to highlight pressing regulatory issues. Emphasis has been placed on complex issues, such as the American with Disabilities Act and the Drug-Free Workplace Act. The HR department should review internal procedures that both address due process in handling complaints of discrimination and harassment and encourage training and awareness to ensure a harassment-free nondiscriminatory workplace. A qualified senior-level individual should oversee these efforts and keep top management informed of progress. Organizations that demonstrate genuine concern for EEO, affirmative action and diversity issues also resolve most claims in-house. Legal fees and no fault settlement awards have reached outlandish proportions. The rapid increase in claims, particularly in the sex and disability categories, has created a backlog in the EEO Commission and forced claimants to initiate civil suits. Aging baby boomers who are being rapidly trimmed from large corporations are expected to launch a new wave of legal suits. They are more likely to have the financial resources to encourage the legal community to aggressively pursue age discrimination claims. Increased attention to compliance issues necessarily must include self-audits patterned after the Office of Federal Contracts Compliance Programs (OFCCP) as published in the Federal Registrar and Bureau of National Affairs. All organizations should find ways to prevent discrimination and harassment claims. This section of the self-audit is critical to understanding and using regulations to enhance both

prevention and in-house resolution of claims. Proper job specifications and requirements, valid testing and screening techniques, equal opportunities for all employees, consistency in employee treatment and valuing diversity demonstrate good business management.

Training and Development Questionnaire Programs, processes and strategies that will enable organizations to develop and improve their internal human resources in order to optimize their contributions to organizational objectives. 1. Is there a policy that states the organizations philosophy on employee training and development? 2. Is there a position within the organization accountable for overseeing and coordinating training and development activities? 3. Is there a process for assessing the organizations immediate training needs and individual development needs? If yes, how is this assessment carried out? How often is the assessment updated? Who participates in the assessment? 4. Is there a process to assess the organizations future training needs? If yes, how is this assessment carried out? Who participates? How far into the future are the needs projected? 5. Are job skills, knowledge and ability considered in assessing training needs? 6. Are new technologies, processes, products, services, market changes and community needs considered in assessing training needs? 7. Are organizational issues, such as mission, objectives, cultural changes and customer orientation, considered in training needs? 8. Are the organizations social responsibilities and respect for diversity reflected in training needs? 9. Are legal requirements considered in training needs? 10. Is remedial training in literacy and basic computation skills offered? 11. Are employee development plans addressed in performance appraisals or other formal settings? 12. To whom are the organizations immediate and future training and development needs communicated? How often?

13. How are all training programs and opportunities communicated to employees? 14. Are subscriptions to professional training and development journals maintained and circulated among department members? Is there a reference library of training and development material for employee use? Is there coordination of professional development material? 15. Do all training and development programs have clear objectives (For example, in a workshop on WordPerfect, a clear objective would be: At the end of this training, participants will be able to use the Merge/Sort feature.)? 16. How are training resources identified internally and externally? Who is involved in the determination? How are all training resources coordinated? 17. Are the results of training programs monitored and evaluated? 18. Is cost considered in the selection of training resources? 19. Is there a method to track training costs in terms of lost work time? 20. Does your organization measure a return on investment in training? How do you know training is used back in the job? 21. Does the organization provide adequate capacity to meet chosen training and development needs? Are employees availing themselves of training opportunities? 22. Are training and development needs reflected in the organizations budget? 23. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources department team would rate the organizations training and development activities and performance? 24. On the same one-to-seven scale, how do you think your customers (other departments) would rate the training and development activities and performance. Explanation of Training and Development Questionnaire The purpose of training and development is to optimize HR contributions to organization objectives. The questions in this section focus on training needs and objectives, address organizational issues (new products, technology, work methods and changing skill requirements) and gauge what impact training has on the organizations profitability. A needs assessment should be conducted before embarking on any training program. Many businesses offer wonderful training programs. Attendees usually leave invigorated and excited. Then there may be a few complaints from managers about overtime costs and slowdowns in operating efficiency because of "unproductive" training time. Analysis of training costs may reveal that departments are using more expensive outside resources because their needs are not addressed by in-house programs. Training may be seen as too expensive both in time and money.

Budgets may be cut. To gain credibility with the customer and assume the status of business contributor, the training and development function of the HR department must (a) clearly address customer needs, (b) formulate training programs in collaboration with users, (c) set training objectives, (d) perform a cost-benefit analysis of all programs and (e) measure results. Once credibility is established, department managers will see that their training budgets are necessary and well used. The choice of training resources should be cost-effective. In some cases a training curriculum can be developed by in-house experts. For other topics it will be more cost-effective to go outside the organization than to train someone in-house. There are many freelance trainers with detailed subject manuals using well-developed modules and techniques. Contract trainers have proven to be very cost-effective.

Labor Relations Questionnaire The process that ensures and oversees fair and effective collective bargaining with those unions representing employees and fosters positive labor relations designed to achieve organization objectives. 1. Does the organization clearly state its philosophy on labor relations and implement guiding procedures for managers who deal with contract and labor relation issues? 2. Is there a position within the organization that oversees and coordinates labor relation activities? 3. Do labor relations strategies support the organizations business plan? 4. Is top management informed and supportive of labor management strategies and goals? 5. Is there an atmosphere of management respect for union representation? 6. Are negotiation strategies and objectives formulated in advance of contract negotiations? 7. Does management understand the laws that govern collective bargaining? 8. Is your labor management team educated and trained in private- or government-sector bargaining techniques? 9. Does your labor relations staff network with professionals from other organizations? 10. Are union officials involved in workshops, educational forums or other interactive sessions with management to address topics of mutual concern, such as business competition, health care costs, compensation and organization change issues? 11. Is there a formal labor/management group to discuss issues of mutual concern outside of the bargaining process? If yes, does this group have a charter and regularly scheduled meetings? Is the group trained in effective meeting skills (e.g., agenda, ground rules, timekeeping, facilitation and action plans)? 12. Is adequate assistance provided to managers in contract administration and handling grievances?

13. Are managers trained in handling discipline matters, recordkeeping, counseling skills, precedent-setting issues, etc.? 14. Are efforts made to analyze root causes of grievances and take corrective/preventative measures to reduce them? 15. When grievances are submitted, are they resolved in a timely fashion? 16. Are there credible efforts made to gain labors input and participation in finding better ways for the organization to survive? 17. Has the organization made plans to meet its future labor relations needs? 18. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources department would rate the effectiveness of labor relations performance? 19. On the same one-to-seven scale, how do you think other departments would rate labor relations performance? 20. On the same one-to-seven scale, how do you think union officials would rate labor relations performance? Explanation of Labor Relations Questionnaire The section on labor relations is important for organizations with unions. The brevity of this section is not intended to minimize its importance. There are fewer questions simply because fair and effective collective bargaining practices are usually already in place. In fact, labor relations may be one of the most important categories for the many organizations which deal with unions, such as local government and public sector agencies and heavily unionized manufacturing companies. Most Fortune 500 manufacturing companies are unionized, and there may be good reasons why other working environments need unions. Management should link overall labor relations and collective bargaining strategies to the organizations business planning process well before company representatives go the bargaining table. Equally important are issues of workforce flexibility and work redesign. Company managers should foster cooperative relations with their unions and draw on the skills and knowledge of union leaders to achieve the organizations objectives. Both employer and union depend on the organizations success and ability to compete in the global economy. The theme of these questions is the need to gain labor cooperation for continuous improvement and to foster union leadership awareness and involvement in critical cost issues. Answers should reveal mutual interests rather than adversarial positions that have not paid off for either party over the years.

Safety, Health and Wellness Questionnaire Programs that provide a work environment that contributes to and demonstrates concern for employee safety, health and well-being, and that produce the economic benefits derived from a safer work environment and healthier workforce. 1. Does the organization have a policy stating its philosophy on employee safety, health and wellness? Is this policy clearly supported and monitored by management? Are there policies and procedures that demonstrate compliance with federal, state and local

regulations? Does the policy provide guidance to managers on implementation of related programs? 2. Does one position within the organization oversee and coordinate safety, health and wellness activities? Is there a process that ensures organizational compliance with current governmental regulations? 3. Are all aspects of OSHA regulations adhered to, such as: The general duty clause? General industry and vertical standards? Recordkeeping requirements? The right-to-know clause? 4. Does your organization have a wellness program in place? Does it include: A qualified wellness coordinator? Voluntary free biennial physicals? A health risk assessment? A health risk assessment follow-up? Counseling and feedback on health and lifestyle improvements? Discussions/training on health-related topics? Access to exercise and fitness facilities? An evaluation of program effectiveness (measurable by reduced absenteeism, increased productivity, reduced healthcare costs, fewer claims, and progress against major risk factors measured in health exams)? Does the evaluation include a cost/benefit analysis? 5. Does your organization have an Employee Assistance Program (EAP)? Does it include: An analysis of problems employees exhibit that, if assisted, would improve the organizations bottom line (this could be determined by an examination of company records of accidents, benefits usage, absences, performance, as well as by interviews with employees, supervisors and

medical personnel)? An evaluation of the programs effectiveness to reduce absenteeism and accident and health insurance claims and improve performance? A cost/benefit analysis? 6. Does your organization have formal accident prevention programs? If so, do they include: An analysis of work-related injuries by category, department and location? Formal workplace inspections? A process to address biomechanics and ergonomics in the workplace? Inspections that address accident causes, unsafe conditions and unsafe behaviors? Employee training in accident prevention and good safety practices? Reinforcement and recognition of safe behaviors? 7. Does your organization measure the cost/benefit ratio of safety programs? 8. Does your organization engage in workplace evacuation drills? If so, how often? 9. On a scale of one to seven (seven being the highest and four being adequate), how do you think your Human Resources team would rate the effectiveness of the organizations safety, health and wellness programs? 10. On the same one-to-seven scale, how do you think your internal clients and employees would rate your safety, health and wellness programs? Explanation of Safety, Health and Wellness Questionnaire This section provides a thorough review of employee safety, health and wellness programs and methods to produce and measure the economic benefits of a safer work environment and healthier workforce. Questions 4 and 5 deal with the importance of employee medical surveillance, wellness programs and Employee Assistance Programs. These programs improve attendance, productivity and employee wellness while decreasing health care costs. Provider promotion information emphasizes the obvious benefits of these programs. However, by tracking your own measurements and performing cost-benefit analyses, you can manage the return investment in safety, health and wellness more deliberately. Question 6 deals with accident prevention and should receive 50% of the overall scoring weight, particularly considering those parts of the question dealing with safe behaviors. The Human Side, a safety consulting firm cited under Associations and Journals has codeveloped with Behavioral Solutions a concept called "Safety in Numbers"(1991), a

behaviorally based approach to workplace safety. Their amazing success stories are based on the application of three principles: (1) breaking away from the traditional approach of reacting to statistics, e.g., waiting for an accident to happen, and instead measuring safe behavior on a daily basis; (2) positive reinforcement by rewarding safe behaviors; and (3) creating a new safety "culture" focused on safe behaviors and their causes. If safety is a major concern to your organization you might explore this rewarding concept. Compliance with OSHA regulations is a prerequisite to all other actions. Preventing unsafe behaviors and unhealthy habits and even exceeding OSHA standards will reduce the organizations exposure to liability and risk. Over 80 percent of reported injuries are a result of unsafe acts and behaviors that can and should be addressed. Reprinted with permission of the HR Center at the International Personnel Management Association (IPMA), 1617 Duke St., Alexandria, VA 22314; (703) 549-7100.

Copyright 1995-2005 Crain Communications Inc. All Rights Reserved. Terms of Use Privacy Statement HRD Audit & Compensation Systems (Questions to be asked) What is the pay philosophy? o Pay-for-Performance? o Seniority? o Pay-for-Knowledge? Is it consistent with the overall goals of the company? What is the compensation strategy? Who decides the strategyHR head, CEO, Compensation committee? What is the compensation plan to achieve the strategy? Is the compensation system equitable? Equity of performance Rewards? What are the deadlines (i.e. wages & salaries have to be paid by 30th of the month) & who is responsible? Does the compensation system encourage increased productivity? Study of wages, benefits, and services to see if they are fair and competitive Fixed v/s variable pay?

Employee satisfaction with regards to reward systems Are all the policies & procedures in place? Review of past practices to determine if they conform to formally stated policies & procedures Does it motivate people to work harder? Salary budget & Cost overruns Legal Compliance in Tax Matters Legal compliance in statutory welfare matters Budgeted v/s actual Administrative costs Wage Surveys Remuneration Plan & linkage to Business Strategy To what extent is the business plan implemented No. of remuneration related issues / disputes No. of strikes / lockouts due to remuneration related issues / disputes Manhours lost due to disputes % of remuneration related issues to total disputes Compliance with Labour Laws Pay scale revisions To see whether the wage differentials are discriminatory or not What are the internal controls to ensure accuracy and consistency of pay? What are the standards, and processes used to develop internal compensation policy and plans How is the compensation program and total compensation package communicated to employees? Are the policies on pay adjustments, pay differentials, incentive awards, overtime pay, premium pay awards, complied with? Accurate & timely maintenance of remuneration records How are wages & salary ranges set? If formal salary ranges are set, are they made public to employees? How frequently are jobs re-evaluated or updated?

Are any salary surveys used? If so, which ones? Are pay ranges revised as a result of these surveys? How frequently? How is the bonus system structured? What are the cultural issues or beliefs related to compensation in the organization? What is the pension or retirement plan & What is the vesting period? What holidays are paid and who is eligible for them? Is confidentiality regarding remuneration records maintained? What are the standards and processes for enrollment for new employees in benefit plans What are the processes & procedures for reporting employment claims? Are they being complied with? What are the employee perceptions of the pay program? What is the retention rate? What is the absenteeism rate? What are the Productivity levels? Are rewards distributed based on clearly set job-related criteria? How are incentives used? How is the incentive scheme communicated? Are the appropriate behaviors being rewarded? Do you have a method to determine the market rate for any given job? Do you ensure that market rates are applied consistently? Timely administration of compensation What is the salary as a % of profit? Can compensation be outsourced? If yes, how much?

Internal communications role in defining and shaping organizational culture Melcrum Publishing 2006 The impact of organizational culture on performance 112 ANGELA SINICKAS: Developing surveys to measure the impact of corporate culture Corporate culture can help drive business results, but it takes a cultural audit to differentiate which elements of the culture can lead to superior performance.

Angela Sinickas conducts employee engagement surveys that are specifically designed to measure the correlation between employee behaviors and attitudes that define an organizations culture and its financial results. The key is to ask the right questions, she says. The questions are developed in two categories: behaviors defining outcomes with financial value and behaviors and attitudes describing inputs that could affect those outcomes. Two categories of survey questions 1. The first category of questions measures positive behavioral outcomes that the organization needs in order to succeed. Some of these have immediate financial value, such as employees ratings of their own productivity or intention to stay with the organization. Other outcome questions are harder to quantify financially, such as self-ratings of employees commitment to help the company succeed or the likelihood of recommending their organization as a great employer to their friends. However, all these are specific employee behaviors that define an engaged workforce and will lead to better financial results. 2. The second category of survey questions measures the current extent of cultural factors likely to contribute to those positive outcomes. Obviously these have to be tailored to the type of work the organization does. Some examples are, To what extent do you feel you have the opportunity to provide upward information or feedback? or To what extent are people treated with respect? Identifying key variables The entire process depends on identifying the key outcome questions and the potential cultural variables at a specific organization that might lead to those outcomes. Sinickas methodology begins with qualitative research in order to identify the unique characteristics for each organization that help to drive business performance and achieve results. Executive interviews. Start by asking executives what behavioral outcomes they want to see and what they think makes working at this place special. What goes into making people more focused, more productive and more committed to quality or customers? Employee focus groups. The next step is to ask employees the same questions. Give them the opportunity to say in their own words what factors they think drive the companys success. Ask why they either want to be there or what changes would increase their commitment to the companys success. Getting people to discuss open-ended questions such as, What makes working for this company better than working for your last company? or Why did you choose to work at this company rather than our competitors? reveals the valueadding characteristics of the culture. In addition to using this qualitative research, a cultural survey should also incorporate survey questions measuring the extent to which the companys stated mission, vision and values are reflected in current management and employee behaviors. Thats how the company is saying what its all about, so you can

measure whether management and staff are living up to the companys stated values, says Sinickas. For example, one merged corporation had launched its new mission and values with a big splash. Many employees asked during meetings how the company would know if and when it was fulfilling the mission and values. Sinickas measured this by structuring a cultural survey around these stated values. The survey was divided into sections, using the three parts of the mission and the values as headlines so employees would visibly Internal communications role in defining and shaping organizational culture Melcrum Publishing 2006 The impact of organizational culture on performance 113 connect the survey with the mission and values. Each section included behavior questions related to a particular value. The hardest section was coming up with questions for the value of sense of humor. We had to decide whether to have serious or funny questions about humor. Asking questions that focus on frequent behaviors Sinickas likes to define corporate culture as, How we do things around here, so she develops survey questions around behaviors and practices rather than feelings or perceptions. This means finding out how frequently managers and employees exhibit certain desirable behaviors rather than how happy people are with them. Rather than asking a satisfaction question, To what extent do you agree or disagree that your supervisor treats you with respect? its more valuable to ask, How often does your supervisor treat you with respect? The focus on frequency reveals what is occurring in the culture, rather than the interior satisfaction levels of individuals. A company can influence what people are doing at work, but it takes a psychiatrist to change someones satisfaction with life, says Sinickas. Measuring the findings against business results Besides correlating input behaviors with outcome behaviors, surveys can also find correlations between survey results and the actual business performance measures. In order to measure the correlation between cultural factors and business results, the demographic questions on the survey need to match up with the types of units or geographies by which financial performance is measured, says Sinickas. Without the exact same breakdowns, it isnt possible to overlay one set of variables over the other. The process is straightforward. For example, you could code actual productivity levels for various plants or call centers on a scale of one to five. These financial data are then input into the survey results as if all the employees in a particular location had answered a survey question on their units productivity. These data are then analyzed for statistical correlations, she says. Another possible performance measure to correlate is employees performance ratings. An individuals rating can be asked as a demographic question on the survey, or input directly into the data, depending on whether

employees sign into a survey anonymously or by using their employee identification numbers. She cites an example: Making a financial case for culture change The findings are used to establish relational links between culture and business results and differentiate the components that enable or inhibit successful outcomes. Sinickas does this by first finding the culture-defining behaviors with the highest correlations. Then she recommends a company continue its current practices for behaviors that have a high correlation and a high net favorable rating by employees. Her recommendations for change focus on the items with high correlations but low survey scores. Theres no point to fixing things employees rate very low, but that have little or no correlation with business results, she says. This process helps to identify gaps between an organizations current and desired practices and to make a convincing case for culture change where it is likely to improve business results. When each employee at one company signed into the survey, they used their employee ID numbers, so their latest performance ratings could be added in later directly from the HR database. It was then possible to work out the extent to which performance ratings correlated with engagement. Internal communications role in defining and shaping organizational culture Melcrum Publishing 2006 The impact of organizational culture on performance 114 Developing an action plan to address negative findings According to Sinickas, successful culture change depends on developing an action plan that focuses on the key issues and addressing them at the right level in the organization. Sometimes enterprise-wide systems and compensation schemes need to be overhauled, but more often business performance and results are affected negatively by local behavioral issues such as treating people with respect. Survey data can be broken down by location and negative findings dealt with locally. For example: FIVE TIPS AND TACTICS FOR MEASURING CULTURE 1. Use a customized survey A standardized survey may miss the characteristics that are unique about the organization and underpin its culture. These are the key factors that a customized cultural audit seeks to uncover and measure in relation to business performance. A standardized survey may identify patterns and correlations that are irrelevant or impossible to act on. Sinickas illustrates this with an example from the Gallup Q12 questionnaire, which found 12 factors that correlate very highly to employee engagement in many companies all over the world. One of those factors is having a best friend at work. Although this finding makes perfect sense, there is little that an organization can do to encourage friendship among its employees, she explains. She believes in taking a more practical approach.

Sinickas philosophy is to achieve business results through focused diagnostics and practical solutions. Look at the numbers and develop ways of improving the positive scores and addressing the negative ones, she advises. The critical success factor is to pick the important metrics the characteristics that together make an organization unique. 2. Use open-ended questions to identify key metrics Its important to identify factors that relate to implicit culture as well as obvious practices and behaviors. Sinickas recommends using open-ended questions in interviews and focus groups to draw out how people really see their organization. Examples include, How would you describe this as a place to work? or Whats it like working here? She asks focus groups, Whats management like here? to draw out issues that are top of mind. Survey questions are then based around the responses. These take the form of a statement followed by a range of agree/disagree options or a frequency measure a question beginning How often, followed by several options on a frequency scale ranging from almost always to almost never with three points in between. This uncovers whether there is a problem around a particular behavior, how often it occurs and how strongly people feel about it, explains Sinickas. The frequency scale puts numbers to otherwise intangible cultural characteristics. 3. Use stories and scenarios to uncover value-added behaviors Sinickas uses focus groups to draw out employees personal experience and insights about what actions or behaviors might be considered a concrete demonstration of characteristics that add value to the organization. Employees are asked to relate practical examples of situations that brought extra money into the company or cost it money through lost productivity, duplication of effort or miscommunications. They then try to identify the actions and behaviors that result in successes and the ones that make things go badly. That leads to questions At one company, employees at each branch looked at their results and picked out the issues that required local attention. They then worked on them in their own staff meetings and town halls. About a year later many of their scores had improved by 20 to 25 percentage points, says Sinickas. Internal communications role in defining and shaping organizational culture Melcrum Publishing 2006 The impact of organizational culture on performance 115 about the running of the company. Perhaps theres too much bureaucracy. Perhaps the management manages only vertically and never crosses over horizontally. Or perhaps information isnt being passed from shift to shift and work is being duplicated. The next step is to ask executives and focus group participants what they think the companys success stories

and negative experiences have in common. This methodology helps to uncover the underlying themes that are ingrained in the organizations culture and identify whether its a blaming culture, a collegial culture or a culture where people feel that they cant afford to make a mistake, so its better to do nothing than to do the wrong thing, explains Sinickas. That is how you extract the characteristics and attitudes that people wouldnt otherwise put into words and that have a significant impact on the companys business performance and results. 4. Pre-test survey questions for misinterpretation Sinickas advises thoroughly pre-testing surveys for anomalies and possible misinterpretations. Its also important to check for ambivalent terminology that might skew the results. Surveys administered in multiple countries need to be worded particularly carefully to account for national differences leading to different interpretations of questions. She gives an example where the same expression was interpreted very differently by employees in two different countries. A company thats headquartered in Europe, although their biggest single operation is in the United States, included in its survey the statement, I feel proud to work here. Respondents were asked to what extent they agreed or disagreed. In the United States, thats a straightforward question requiring a simple response. People say that theyre proud to let people know where they work, explains Sinickas. But in France people associated pride with arrogance, so if a branch or office had marked a high score on that question, it might have been seen as a bad thing. 5. Use reverse translation to uncover global differences in interpretation Words that seem simple in one culture may have very different interpretations elsewhere so its important to use neutral vocabulary and language in order to obtain consistency of response. Otherwise the results will be skewed and you might not know that because youre interpreting the answers in the way that you designed the questions, not necessarily in the way they were answered, says Sinickas. This is an important consideration when having surveys translated into other languages. Sinickas recommends having the survey translated into the other languages, and then retranslating it back into the first language by a different translator. This shows which terminology could be interpreted differently sometimes in very funny ways, she says. Angela Sinickas, President, Sinickas Communications, Inc. angela@sinicom.com

According to the Small Business Administration (2006) Office of Advocacy estimates, in 2005 small firms with fewer than 500 employees represented 99.9 percent of the 25.8 million [U.S.] businesses. In 2006, the Business Register of Statistics Canada reported that more than 99 percent of employer businesses were small businesses with less than 500 employees (Industry Canada, 2007b). In 2005 99.9 percent of the estimated

4.3 million businesses in the U.K. were small to medium-sized enterprises (250 or fewer employees), according to the U.K. Department of Trade and Industry Small Business Service. Whether employees are working together on the manufacturing floor to produce a product, sharing information between departments to complete a project, or teaming to produce business strategy in the board room, it is the ability to build relationships based on trust that propel the collective success of the company. This study of employee communication practices in small businesses examines research data compiled by Insightrix Research Services for the IABC Research Foundation. The information contained here is in response to the project titled Best Communication Practices in Small Firms, commissioned by the IABC Research Foundation and the Gevity Institute. While there is a great deal of research on employee communication or internal communication in large companies and organizations, there is little information about how small businesses or small firms apply these theories, practices and measures to create a compelling organizational culture and an engaged workforce. This study includes a literature review that constructs the concept of employee communication in small enterprises, followed by the results of a survey that captured the perceptions of business professionals responsible for communication practices in small enterprises, case studies, and concluding commentary regarding recommendations for developing and improving employee communication practices in small enterprises. The recommendations from this study provide valuable insight for small business owners, communication professionals and researchers interested in further study of employee communication in small businesses. The goal of this project was twofold: to identify current and emerging employee communication practices and to address the impact of effective internal communication on small businesses. EXECUTIVE SUMMARY 14 The primary research questions in this study were: What are the common employee communication practices among small businesses? What are emerging employee communication practices among small businesses? What is the cost-effectiveness of communication practices in terms of impact on productivity and profitability for small businesses? What is the organizational impact (on employee retention, business growth, etc.) of employee communication practices in small businesses? There are many key findings in this research project. Research on the practice of organizational communication and large companies indicates a connection between communication and return on investment (Watson Wyatt, 2003). Research in this study suggests connections between greater profit margins and employee communication within small to medium-sized enterprises (SMEs). There is mounting evidence that communication plays a role in engaging and retaining employees, both of which contribute to the profitability and productivity of an organization. From the review of literature related to employee communication practices and small to medium-sized enterprises, the following findings are apparent: Measurable links exist between company productivity and employee communication, at least in studies conducted with large businesses. Communication plays a role in engaging and retaining employees, both of which contribute to the profitability and productivity of an organization. Companies with highly engaged employees are more profitable, accounting for 1 to 10 percent of earnings (Hammonds, 2005).

Direct, two-way communication and staff interaction foster employee engagement. Business potential can only be realized if employees are fully aware of the company goals and their role in reaching those goals, and are motivated and committed to achieving those goals. Employee loyalty increases when managers exercise direct communication and consultation. Executive Summary 15 Effective communication improves employee retention and reduces turnover rates. Staff loyalty is a result of setting goals and encouraging open and clear lines of communication across the organization. The person responsible for communication activities for the small to mediumsized businesses is the owner or manager, who is also responsible for other key aspects of the business success. As businesses grow in size, communication activities are often delegated to human resource personnel or to marketing/sales personnel, for whom employee communication is not the primary concern. From the survey results, the following findings are apparent: Direct face-to-face employee communication practices are identified by respondents as the most valuable for building employee engagement and increasing productivity. Electronic communication strategies are becoming more valuable to small businesses, but they remain an emerging practice for most. Many small to medium-sized businesses do not have a dedicated budget for communication. Many SMEs do not have a strategic communication plan that includes internal communication. A large proportion of the businesses surveyed did not measure the effects of employee communication tactics on their profitability. Because small to medium-sized businesses do not measure communication effects, there is little direct evidence to connect communication activities to return on investment. From the in-depth interviews conducted with small businesses, owner/manager commentary supports the following principles: Positive relationships between owners and managers, defined by communication practices, were credited for employee engagement and productivity. Small businesses rely more heavily than larger businesses on face-to-face communication practices due to their small populations and proximity to one another. Executive Summary 16 Electronic and print communication practices supplemented and reinforced the messages and face-to-face communication exchanges. The growing pains of expanding the employee population or the addition of multiple locations increase SMEs need for more formal and planned internal communication practices. This can be frustrating for organizations that want to maintain the feel and spontaneity of the small organization. These growing organizations need to plan internal communication more than ever: to ensure that messages are delivered and received in a common manner across the organization, and to identify and confront any barriers to understanding and reaching company goals before they become problems. In summary, after analyzing the literature, the survey results and the commentary by SME owners and managers in the case studies, the following recommendations with implementation suggestions are provided for small businesses that wish to capitalize

on employee communication as a resource for business success: Improve direct, two-way communication between management and employees. Cultivate a culture that values communicationin all directions within the company. Develop career-long communication opportunities. Create opportunities for informal communications. Connect marketing with internal communications. Improve communication research techniques that connect employee communication to the company bottom line. In conclusion, the findings and recommendations from this study provide evidence for the development of internal communication strategies that, when practiced consistently and measured, will have an impact on employee behavior and productivity, which ultimately can be measured by profitability and reputation variables. These strategies are compelling for small businesses that wish to retain their size or those small to medium-sized enterprises in the throes of growing pains. Internal communication practices that encourage open two-way communication and recognize the contributions of employees in achieving company goals will provide endless value to small to medium-sized enterprises. Executive Summary http://www.iabc.com/rf/pdf/ExecSumm_HumanElementPDF.pdf The importance of understanding organizational culture Information Outlook, June, 2005 by Debbie Schachter E-mail Print Link When I was an MBA student, as part of a management course I had the opportunity to conduct a "culture assessment" at the organization where I was working. The organization was somewhat new to me--I had been hired as a senior manager only a year before--and the ability to quantify and analyze the organizational culture was a new concept to me. As an employee in any type of organization can attest, organizational culture is as prevalent and as varied as individuals themselves. Organizational culture is enduring and complex, and may have both a positive and a negative effect on the staff and the workplace. In many ways culture will determine the survival of an organization over the long term, especially in volatile industries. Related Results Trust, E-innovation and Leadership in Change Foreign Banks in United States Since World War II: A Useful Fringe Building Your Brand With Brand Line Extensions The Impact of the Structure of Debt on Target Gains Project Management Standard Program Cultures that can be a liability to an organization include those that create barriers to change, create barriers to diversity or barriers to mergers and acquisitions. (Stephen P. Robbins. Organizational Behavior, 8th ed., 602-603.) Understanding the organizational culture can help you to understand why change does not take place, or why a project fails. It will also help you to determine where to strive to make changes to the culture. As managers and library leaders, why do we need to get a sense of the prevailing organizational culture? It is essential to understand the organizational culture if you want to make changes to how work is done, what type of work is being done, or at the broadest level, to affect the organization's standing in its industry. Understanding the culture and, as required, changing it, can mean the difference between attracting and retaining good employees and driving away the best employees with an environment that doesn't encourage, challenge, or reward them.

The organizational culture assessment that I participated in didn't provide any surprises regarding the existing culture--most people with any level of sensitivity can get a sense of what type of culture is prevalent in an organization. What was surprising were the results from the survey to determine what type of culture staff would prefer to see the organization develop. As background, the organization had just gone through a major change. The executive director had departed after 20 years; there had been a period of several months with an acting ED followed by a new, external ED appointment. The assessment took place only a month after the new ED was in position. Types of Culture The assessment we used to assess the organization's culture used questions that sought to determine and enumerate such organizational traits as symbols (such as images, things, events), organizational-espoused values and beliefs (for example, the mission statement, constitution, espoused goals of the ED, slogans). Then the espoused beliefs and values were compared with the symbols and culture identified through the written survey and staff interviews. The written survey asked staff to answer questions related to the current culture and then asked how they would like to see the culture change. Responses were tabulated to determine which type of culture existed among the four metrics of organizational culture: hierarchy, adhocracy, clan, and market. The hierarchy aspect of an organization refers to how structured, inflexible, and process-driven an organization is in the way it operates. At the opposite end of the scale, adhocracy refers to how flexible, informal, innovative, and dynamic an organization is. A clan culture supports a very friendly and social environment in which to work, while a market culture is often found in organizations that are results-oriented and sales-driven. The assessment determined that the existing culture was very hierarchical and quite clannish. The staff also indicated, through the anonymous written survey, that they would prefer the culture to be more adhocratic and less hierarchical, while at the same time being slightly more market culture and clannish. This showed the positive and optimistic view of the staff towards change. The process I used for assessing the culture involved conducting group employee interviews and written staff surveys, followed by analysis of the information. Staff responded to a series of prompts and questions regarding organizational symbols, organizational-espoused values, and beliefs. These responses were analyzed, creating a pattern showing comparisons between espoused belief/values (in the form of phrases or statements) with their associated symbols (both positive and negative), and related culture types (hierarchy, adhocracy, clan, and market). [ILLUSTRATION OMITTED] For a new leader or manager, understanding the organizational culture that is in place is essential for success in providing direction, especially when the direction is different from what has come before. Are staff willing and eager to take on new challenges and to follow a new direction, or will they provide passive or active resistance to any changes? What is important to people today, based on their view of where the organization is and where it should be? Where are there disconnects between espoused values, such as the mission statement, and the over symbols and culture type? For example, if the organization's mission is to provide expert customer service, yet the strong hierarchical structure means that employees are not empowered to assist customers by providing creative solutions or don't have the required authority to provide responses or results, there is a disconnect. The organization that I surveyed was eager to see positive change and the time was right for providing impetus to staff to follow a new path. The assessment can reveal the opposite, however, which is just as valuable to managers or library leaders. If there is resistance to change, if the espoused values of the organization don't match with the staff perceptions and prevailing culture, you must try to change the culture or change the objectives and mission to reflect reality. Related Results

Trust, E-innovation and Leadership in Change Foreign Banks in United States Since World War II: A Useful Fringe Building Your Brand With Brand Line Extensions The Impact of the Structure of Debt on Target Gains Project Management Standard Program Ask the Staff From interviews and surveys, staff will provide a variety of examples of symbols that reflect particular cultures. For example, symbols that might reflect a clan culture might include: coffee parties, potlucks, Halloween parties, postcards from staff trips, gifts from patrons. Symbols that indicate a hierarchical culture could include procedures manuals, statistics, stability, structure, and insistence on punctuality, accuracy, respect, politeness, privacy, efficiency. From these examples, you can quickly get a sense of the types of symbols you could attribute to our own organization's culture. As a library manager, it may not be possible for you to change the organization's overarching culture. Understanding the culture, however--especially if you want to adapt your departmental culture to create a more positive culture--is possible. Departmental cultures may differ greatly in organizations, depending on the leaders and the staff within those departments. You may not be able to have an effect on the organization overall, depending on your position in the organization and how large it is, but with work you will be able to make a difference at the library level. Some ways that you can try to change the organizational culture include reviewing the mission and vision for the library with the staff to ensure that they are accurate. If changes are needed to reflect the reality of what you want to do and what you can do, then do so. For a start, make sure that departmental statements and staff actions reflect the type of culture you want. For example, to increase the market culture, try increasing the measurements of service activities and have staff involved in developing metrics and outcomes for services (as part of the performance management system, for example). Reward staff of particular service areas who respond to changes in customer demands through developing new programs or services. To reduce hierarchical culture, for example, begin by empowering staff to provide suggestions and to help implement their new ideas. You should also empower staff to make more decisions for their own areas of expertise. As the library leader, you should always be aware of your actions and model the behavior you expect of your staff. Ensure that the statements you make are consistent with the values and the symbols of the culture you would like to develop. You may not be able to change the overall organizational culture immediately, but the positive results and positive impact at the departmental level should have some level of spillover effect onto other departments. Moreover, it will make it a more pleasant culture for you and for your staff to be working in. Values and Beliefs describe a family business' commitment to its constituencies: customers, shareholders, employees, the community, vendors, etc. Values describe the standards and ideals that a company holds in high regard. They provide a framework for implementing strategic initiatives. Values Integration o Consistently reinforcing standards in company communication mediums o Values are clearly defined o Company practices, systems, and processes are carefully aligned with values o Values are consistently communicated o Employees understand critical importance of standards o Carefully considering values during the strategic planning process Values Credibility o Ensuring values are not compromised o No strategy is adopted that might violate company standards o Values are reviewed periodically to maintain relevance

o Ensuring employee day-to-day experiences are consistent with values o Confronting behaviors that violate values and standards o Cynicism is virtually absent Leadership In the organizational culture, leadership deals with creating a clearly articulated vision and possessing the skills and the resolve to recruit and develop followers who are committed to carrying out the vision. Having the ability to see the bigger picture and maintaining a balance between high-level strategies and front-line tactics. Different leadership styles are available depending upon concern for profit or concern for production. An imbalance in the concerns tends to sway the leader to a less effective style. Click here to see the grid of leadership styles. Management Modeling o Management "walks-the-talk" o Managers are viewed as role models o Management styles are aligned with values and consistent across division/ departments o High level of confidence in senior leadership o Senior managers are viewed as honest and ethical Strategic / Tactical Balance o Tactical and strategic skills among managers are equally emphasized o Line managers understand the "big picture" o Managers understand the broader implications of their decisions o Managers can effectively communicate the company's strategic plan to their staff Empowerment in Organizational Culture o Balancing authority and control o Encouraging employee involvement o Decisions made without unnecessary or authoritarian approval process o Decisions driven to the lowest appropriate levels Developmental Coaching o Delegation is a motivational tool o Managers consider employee's self-esteem during coaching/ counseling o Managers take the time to recognize a job well done o Managers encourage initiative o Coaching is viewed as developmental vs. punitive o Employee goals/ aspirations are taken into consideration Building Effective Teams o Managers promote teamwork o Team participants are excited about and committed to their goals and objectives o Cross-functional communication is promoted o Meetings are well planned and highly participative Human Resource Systems and Your Organizational Culture Is your business well-organized for improvement and success? The Practitioner's Guide for Organizing an Organization is a powerful new model that takes into account both processes and people. PGOO shows how to identify the most pressing problems to solve PGOO introduces the HALO Assessment process - electronic assessment tools that are highly effective, easy to use, systematic and data-based PGOO explains how to produce a better-organized organization http://www.family-business-experts.com/PGOOsp.html

Human Resource Systems within the organizational culture define how a company recruits, trains, challenges, and inspires its employees in the pursuit of its strategic intent. Selective Recruitment o Considering only high-caliber candidates o Evaluating candidate compatibility with company culture o Interviewing skills are a company strength o Obtaining boss and peer input for critical hires o Evaluating managers on their ability to recruit top talent Employee Orientation o Providing a comprehensive orientation program o Emphasizing values and beliefs o Senior managers participate in the process Does Your Organizational Culture Encourage Continuous Learning? o Training is a company priority o Providing employees with the necessary training to perform at optimum levels o Training programs have a positive impact on organizational performance o Aligning training programs with strategic goals o Training programs are well designed and structured o Spending a strategically proportionate amount of money on training o Carefully designing a succession plan Performance Management o Performance management system is results-oriented o Ensuring mutually agreed upon goals o Accountabilities and timeliness are clear o Interim performance reviews are standard practice o Performance evaluations are comprehensive and substantiated Reward systems o Rewarding appropriate skills and behaviors o Rewards are fair and equitable o Rewards are worth the effort o Promotions are deserved o Rewarding team performance greater than or equal to individual performance Organization Character is Part of Your Organizational Culture Organization Character is an aspect of organizational culture that refers to the "behind the scenes personality" of a company. These are the explicit or implicit protocols that soon become apparent to all employees. It takes into account how an individual's perception of his or her company is shaped to a large extent by day-to-day experiences. Informal Communication - Part of Your Organizational Culture? o Open exchange of ideas without fear of reprisal o Using conflict or disagreement constructively o Establishing an "open-door" policy o Balance of technology and face-to-face communication Organization Feedback o Establishing methods for internal feedback o Recognizing the value of employee input o Encouraging employees to offer their ideas and opinions o Communicating the results of the feedback Adaptability to Change Vital to Organizational Culture o Company is proficient at change management o Ensuring that all employees understand the reasons for the change

o o o

Ensuring that all employees understand the process and methods that will be used to implement the change Employees expect change Ability to respond and adapt to change

HR AUDIT

http://www.lapiana.org/consulting/services/HRAudit. pdf

Introduction to The Human Resources Audit The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the nonprofits human resources system, and any issues needing resolution. The audit works best when the focus is on analyzing and improving the HR function in the organization. The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it cant tell you what you need to do to address these issues. It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organizations mission and objectives can be realized.

Scope of Audit: Generally, no one can measure the attitude of human being and also their problems are not

confined to the HR department alone. So it is very much broad in nature. It covers the following HR areas: Audit of all the HR function. Audit of managerial compliance of personnel policies, procedures and legal provisions. Audit of corporate strategy regarding HR planning, staffing, IRs, remuneration and other HR activities. Audit of the HR climate on employee motivation, morale and job satisfaction.

Benefits of HR Audit: It provides the various benefits to the organization. These are: It helps to find out the proper contribution of the HR department towards the organization. Development of the professional image of the HR department of the organization. Reduce the HR cost. Motivation of the HR personnel. Find out the problems and solve them smoothly. Provides timely legal requirement. Sound Performance Appraisal Systems. Systematic job analysis. Smooth adoption of the changing mindset. Approaches to HR Audit: Who should conduct the audit? The team that is responsible for the audit should represent a cross-section of the organizations staff, including line staff, middle and upper management, and those responsible for HR functions.

How should it be conducted? The audit process consists of a series of questions covering the eight primary components of the HR function:

Roles, head count, and HR information systems (HRIS) Recruitment Documentation Training, development, and career management Compensation and benefits Performance measurement and evaluation Termination and transition Legal issues and personnel policies

The team works to collect information to answer the HR audit questions in each of these categories. The focus is on how these activities and tasks are actually performed in the organization. The first step is to collect all the pertinent information. The process of getting information, in and of itself, can be quite informative. How are needed improvements identified? Once information is gathered, the audit team reviews each major section and notes disparities between paper (what we think or say we do) and practice (what we actually do, as revealed by the answers to the audit questions). This can then be compared to best practice (what we should do to best support our organizations mission). A cautionary note: Finding out what is insufficient and inadequate is the first step toward improvement. If deficiencies are identified, it is important to take steps to correct those deficiencies. Organizations should take that first step only when they are ready to act on the findings, and to make necessary improvements in their HR skills, processes, and systems.

How is follow-up and correction done? Improving the HR system takes some time. A workplan with a timeline, accountability, and deliverables should be created after the team reviews the completed audit and identifies areas where improvement is needed. Follow-up and review should be a regular management function, performed on an ongoing basis. HR AUDIT Human Resources Audit Introduction to The Human Resources Audit Roles, Head Count, & Human Resource Information Systems (HRIS)

How many employees are currently on staff? How many employees are: o Regular o Probationary o Temporary o Full Time o Part Time o Exempt o Non-Exempt What is the definition of a part-time employee? (i.e., What is the maximum number of hours an employee can work to be considered part-time?) What is the minimum number of hours an employee has to work to be considered full-time? How long is the probationary period? Are employees aware of their status?

How long can an employee be temporary? How many employees have supervisory responsibility? Are there currently up-to-date job descriptions for all employees? If not, which ones dont have descriptions? Are independent contractors used? If so, how many are being used? And, for what functions? Is the 21 point test for Independent Consultants being used for classification? Have issues related to classification of employees been raised?

Recruitment

How did the work force get to be the current size? What are some of your organizations future needs for personnel? What are the procedures for hiring in your organization? What recruitment sources are used? (e.g., advertisements, referrals from other agencies, personal contacts) Are current employees given appropriate consideration for promotion or lateral position changes? Who does the preliminary screening of candidates? Who selects candidates for interviews? Is training provided for those who conduct interviews? How is the recruitment, screening, and selection process documented? What is the interview process that is used (e.g., individual, sequential, panel)? Who holds final authority to hire? Who checks references? How are the reference checks documented? Who makes the offer of employment?

Where is the hiring paperwork generated? Who negotiates compensation packages? List the practices you believe are unique to your organization. What is the turnover rate (percent of employees leaving each year) in your organization? Has this changed over time? Who gives references for former employees?

Introduction to The Human Resources Audit Documentation

Where and with whom are the personnel files currently held? What documents are held in personnel files? How are the following documented by your organization? o Hiring: Application, Interviewing, and Reference Checks o Compensation and Benefits o Transitions o Paid Time Off o Training o Discipline o Work History o Work Assignments o Significant accomplishments o Emergency contact information o Performance evaluation and performance management o Termination How long are files held and where are they stored after employees leave? What is the interface between HR and Finance? Is a payroll service used, and if so, which one?

Does the payroll service provide all governmental employment filings? Is there training of managers and employees about personnel files, and policies and procedures for accessing them? How is Paid Time Off documented? When requests for information are made to your organization, who fills the request? Is an HRIS system being used, and if so, which one?

Training, Development and Career Management

Who is responsible for new employee orientation? What are the elements of the new employee orientation program? Where and to whom do new employees go when they have questions about your organization or their jobs? Is there a formal training program for employees and managers? If so, please describe it. What training and development initiatives have occurred in your organization? How are managers and supervisors trained and prepared for their roles? What is the average length of time an employee stays with your organization? Does this vary by position type? How much does your organization spend annually (in total and per employee) on employee training and development? Does this vary by position type?

Compensation and Benefits Basic Compensation Questions

Is there a formal compensation program? How are wages set? Are formal salary ranges set?

If formal salary ranges are set, are they made public to employees? How are jobs rated? How frequently are jobs re-evaluated or updated? Are any salary surveys used? If so, which ones? Are pay ranges revised as a result of these surveys? How frequently? Who in your organization (what position) administers the compensation program? Are COLAs given, and if so what is the basis for the COLA? Are merit increases given, and if so, are they integrated with performance evaluation? Is there a bonus system, and if so how is it structured? How is the compensation program and total compensation package communicated to employees? What are the cultural issues or beliefs related to compensation in your organization? How is employee communication regarding compensation and benefits delivered in your organization?

HR AUDIT Human Resources Audit Introduction to The Human Resources Audit Health and Welfare Benefits

Describe the health insurance program provided by your organization. Are dependents covered, and if so, in part or in full? Are domestic partners covered? What are the eligibility requirements for health insurance and other benefits?

Which of the following health and wellness benefits are offered, and what are the limits and requirements for coverage? o Dental o Vision o Disability o Employee Assistance Program o Life Insurance o Other wellness benefits o Flex benefit plan o Other benefits

Compensation And Benefits (continued) Pension and Retirement

What is the pension or retirement plan? What is the vesting period? Can employees contribute? Can pretax dollars be put into some form of deferment plan? Paid Time Off What holidays are paid and who is eligible for them? Is there a PTO system, or is it split between vacation and sick leave? If it is straight PTO, what are the rates of accrual and caps? What is the vacation schedule, and how is it earned? What is the eligibility requirement for vacation? Is there a cap to limit the amount of vacation accrued? Are employees permitted to substitute sick leave for vacation? How is unused accrued vacation treated? Can employees contribute sick leave to other employees, and if so, what are the limits?

Performance Management And Evaluation

Describe the past and current performance appraisal system in your organization. If a performance appraisal instrument is used, please attach a copy. (If the instrument differs by position, please attach all instruments.) What type of process is used (360osupervisor onlypeer evaluationoutcome)? What type of training is used in relationship to performance evaluation? What is the role of the supervisor/manager in performance appraisal? What is the focus of performance management in your organization? How often and consistently is the process used?

Termination And Transition

Is your organization an at-will employer? What other causes or conditions of termination of employment exists? What procedures are used for o Termination for Cause o Job Closure o Resignation What level of approval is needed before a termination can occur? Is there any formal checklist or legal review prior to termination? Are exit interviews performed for all employees who leave? What documentation is required for all employee transitions? How are references handled in your organization? Who is responsible for internal communications regarding difficult terminations? (i.e., communicating the termination to other employees.)

Legal Issues / Personnel Policies

To your knowledge, are all employees appropriately classified? What personnel policies are currently being used? (Please attach a copy) When was the last time these policies were reviewed and updated? Is there a disparity between policies and practices? Who has organizational responsibility for legal or employment questions? Is harassment training regularly provided? How are employee grievances dealt with?

http://www.icejobs.com/hrrole_introhra1.htm

HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization. http://www.indianmba.com/Faculty_Column/FC55 0/fc550.html

Human Resource Audit

By

Dr. Parimalendu Bandyopadhyay

Lecturer B.B. College Asansol

Scope of Audit:

Generally, no one can measure the attitude of human being and also their problems are not confined to the HR department alone. So it is very much broad in nature. It covers the following HR areas: Audit of all the HR function. Audit of managerial compliance of personnel policies, procedures and legal provisions. Audit of corporate strategy regarding HR planning, staffing, IRs, remuneration and other HR activities. Audit of the HR climate on employee motivation, morale and job satisfaction. Benefits of HR Audit: It provides the various benefits to the organization. These are: It helps to find out the proper contribution of the HR department towards the organization. Development of the professional image of the HR department of the organization. Reduce the HR cost. Motivation of the HR personnel. Find out the problems and solve them smoothly. Provides timely legal requirement. Sound Performance Appraisal Systems. Systematic job analysis. Smooth adoption of the changing mindset. Approaches to HR Audit: There are five approaches for the purpose of evaluation of HR in any organization: Comparative approach Outside authority Statistical Compliance approach and Management By Objectives(MBO)

Conclusion: The auditors always prepare and submit an audit report to authority of the organization, which may be clean or qualified. The clean report indicates the appreciative of the department's function, but the latter one represents the gaps in performance and therefore contains remarks and remedial measures. HR Audit is very much helpful to face the challenges and to increase the potentiality of the HR personnel in the organization. References: William.B.Werther and Keith Davis, Human Resource Management and Personnel Management, 5th edition, McGraw-hill, 1996. K. Aswathappa, Human Resource Management and Personnel Management, 4th edition, McGraw-hill, 2006.

Seeking Industry Best Practice The major aim of an HR Audit is to examine current policies, practices and strategies and to gauge their effectiveness in the context of your business.

Unlike a financial audit, which seeks to uncover inaccuracies, our HR Audit team will help you to find the best practices, ones which are relevant to your business, your organisational culture, and most importantly, practices which add-value to your bottom line.

All of our senior consultants and associates, have been senior HR managers across a range of industries, and are able to gain a rapid understanding of your business and HR philosophies. As a result, they have the experience to help you consider new methodologies, new systems, changed practices and so on, all aimed at improving effectiveness, efficiency and of course, profitablity. In the process, we would also aim to assist in creating the sort of working environment which encourages employee retention and loyalty, improves morale, motivation and performance, and creates an image of your company as an employer of choice. A link to our Corporate Investigations Service Occasionally a client may have a need to delve a little deeper when a particular HR or employee situation seems out of the ordinary. This may be a suspected fraud or malpractice, and it is here that our unique link of HR and Corporate Investigations Services will be of significant value, in quietly and discreetly uncovering any irregularities.. Where we can assist Skillnet Resources provides HR Audit assistance to clients in the following areas: - HR Strategic and Operational Planning - HR Information Systems - Performance Management Systems - Compensation and Benefits - Employee Communciations - Recruitment and Selection, including the use of tests and questionnaires - Training and Training Centre Management

- HR (Manpower) Planning - Employee Development and Career Management - Industrial/employee relations - Evaluating currently outsourced services - Examining further opportunities for outsourcing

http://www.techno-preneur.net/information-desk/sciencetechmagazine/2006/may06/Human_resources.pdf Human Resources Audit in Industries human resources audit is a tool for evaluating the personnel activities of an industry or a company.This audit is an overall quality control check on all human resources activities in an industry and an evaluation of how these activities support the strategies of industries. Areas of Human Resources Audit The human resources audit must evaluate the personnel functions, the use of procedures by the managers and the impact of these activities on the employees. A human resources audit covers the following areas as identified by Robert L .Mathis and John H. Jackson:1. Audit of various functions of human resources 2. Audit of managerial compliance 3. Audit of environment culture in the industry 4. Audit of corporate or industrial strategy A 1. Audit of various functions of human resources This covers all human resources activities including: Determination of objectives of each activity Identification of responsibility of performance Review of performance Developing an action plan to correct deviations between results and goals

 Follow-up of action plan 2. Audit of managerial compliance This covers audit of managerial compliance of personnel policies, procedures, and legal and welfare provisions. Compliance with the legal provisions is most important as any violation makes the management guilty of an offence. 3. Audit of environment culture in the industry The working culture in any industry has an impact on employee motivation, morale, job satisfaction, employee absenteeism, safety records and employee welfare. 4. Audit of corporate or industrial strategy This helps the industry to gain a competitive advantage. By analyzing the SWOT analysis of the industry, the management can take decisions regarding marketing channels, services, innovations, low cost production and other like decisions. Approaches to Human Resources Audit Prof. K. Aswathappa has identified the following approaches, which are adopted for purpose of evaluation: Comparative approach Outside authority approach Statistical approach Compliance approach Management by objectives (MBO) approach Comparative approach In this, the auditors identify Competitor Company as the model. The results of their organization are compared with that of the Model Company/ industry. Outside authority approach In this, the auditors use standards set by an outside consultant as benchmark for comparison of own results.

Statistical approach In this, Statistical measures are performance is developed considering the companys existing information. Compliance approach In this, auditors review past actions to calculate whether those activities comply with legal requirements and industry policies and procedures. Management by objectives (MBO) approach This approach creates specific goals, against which performance can be measured, to arrive at final decision about industrys actual performance with the set objectives. Conclusions The main functions of human resources audit are to take specific actions that will help minimize employee turnover orientation training, working conditions, remuneration and benefits and opportunities for advancement. Therefore, quality of turnover is more important than the quantity of people leaving and joining the industry. Human resources management should create a work environment to make employee realize that it makes a sense to work in the factory rather than staying at home and waste their time. Dr. A.G.Matani Faculty- Mech. Engg; Government college of Engineering Amravati-444604 (MS) Email: ashokgm3@yahoo.com Prevalence of HR Audit Research Univ of Iowa(USA- 1991): Abt 1/3rd firms U/Sur Seldom or never conducts reviews. Final 1/3rd somewhere in Mid. Business Today - Gallup MBA India Bangalore Mkt Research 1995; How people being managed in various Orgns across India. Survey n = 653, Line Mgrs (477), HR Mgrs (98). CEOs (78).Chosen across 350 Companies. Findings Hiring: 83% CEOs, 72% Mgrs , 77% HR Mgrs (98): Feel HR Mgrs Doing good Job in appointing people with requisite

skills.

Job Satisfaction:3/4th Line Mgrs & HR Mgrs : are satisfied with the level of attention paid to Employee welfare & Work Culture in their Organizations. Training & Dev: Majority feels that attention paid to Employee Growth & Dev is satisfactory. Appraisal System: Majority are not happywith the system they have in their organizations. HR Audit: How often they conduct audit: was out side the purview of Survey

Human Resource Audit HRA is well practiced in western world. Alike, Financial Audit No full Personnel Audit in India. HRA is Evaluation, Examination, Review and Verification of Completed Activities to find the true state of affair in the deptt. HRA refers to Examination & Evaluation of Polices, Practices & Procedures to detect Effectiveness & Efficiency of HRM And Verify if Mission, Objectives, Polices, Procedures, Programs are chased and expected results achieved HRA also suggest future improvements based on past activities measurement HRA-OBJECTIVES Basic purpose of HR-Audit is to find: How various units are functioning? How they met policies & guidelines Pre-agreed upon? To assist Rest of Organization locating gaps between Objectives & Results.

Finally, Formulate Plan for corrections. Objectives are: 1. Effectiveness: To review performance of Human resource Deptt and its activities to determine effectiveness.2.Implementation: To locate gaps, lapses, failings in applying Polices, Procedures, Practices & HR-directives. Also to see areas of wrong/ non- implementation that hindered the planned programs & activities. 3.Rectification: To take corrective steps to rectify mistakes, shortcomings contesting effective work performance of HR Deptt. 4.Evaluation: To evaluate HR Staff & employees.5. To evaluate the extent to which Line Managers Applied Policies Programmes & Directives initiated by Top Management & HR Deptt.6.Modify: To review HR System and Modify to meet challenges in comparison with other organizations. 7.Questioning: To seek answers to What happened? Why did it happen? Why did it not happen? while implementing Policies, Practices & Directives in managing HRs

Need for HR AuditThough, to audit HR- Policies & Practices No legal obligation exists, some Modern Organizations chase to: Increase size of Orgn & Personnel Change Philosophy of Mgt towards HR Increase Strength & Influence of Unions Modern Organizations chase to: Change HRM Philosophy hence Affect Change in Personnel Policies & Practices World Wide. Increase Organizational dependence on HR System & its Effective Funtioning HRA Significance: lies in following Mgts Feel, that Employee Participation in Activities is Essential for Orgnsuccess. It Provides Required Feedback. Managing Rising Labor Costs & increasing Opportunities for Competitive Advantage of HRM.HRA can avoid Govt-intervention & Protect Employees interests.

Benefits of HRA Identifies contribution of HR Deptt. Improves HR Deptts Professional Image. Fosters greater Responsibility & Professionalism amongst HR Staff. Classifies HR Deptts Responsibilities & Duties. Stimulates Uniformity of Personnel Policies & Practices. Identifies Critical personnel problems. Ensures Timely Legal Compliance Requirements. Reduces HR Costs

Scope of Audit

Scope of HR Audit Results

HRA Process

HRA

F eedback Audit Report

Scope of Audit The audit should be broad. HRA has vide scope, involves much more than Mgt. of HR.HRA covers concept of people Mgt by supervisors at all levels. Covers Areas: HR Philosophy, Policies, and Programmes & Practices and Personnel Results. [ Functions, Procedures, Impact on Employees] Involves all activities of HR Functions like Major Areas: Planning - Forecasting,

Scheduling; Staffing & Development, Organizing; Motivation & commitment ; Admn leadership styles, supervision, delegation, negotiation; Research & Innovation Experiments & theory testing in all Areas. Covers Specifically following Areas: Audit of HR Function. Audit of Managerial Compliance. Audit of HR Climate/ Employee satisfaction. Audit of Corporate Strategy See Tables: HR AUDIT - Areas & Levels. PTU Tables 1.2 & 1.1 pages 22 & 21 AND Before we discuss Further LET US Please understand little about Audit process

Audit of HR Function Involves all activities of HR Functions, From HRP to IR. Major Areas: Planning - Forecasting, Scheduling; Staffing & Development, Organizing; Motivation & commitment ; Administration ; Research & Innovation. For each activity Auditors must: 1 determine objective of activity.2 Identify who is responsible for its performance. 3 Review the performance.4 Develop action plan to correct deviation, between Results & Goal. 5 Follow up action plan. HR Evaluation must justify existence of deptt & its expenses. Deptt has no reason to function if fails to contribute to Companys bottom-line, Prune expenses to make deptt viable.

Discuss Sample Example Aswathappa. Page 614 HR AUDIT Checklist

Audit of Managerial Compliance Involves audit of managerial compliance of Personnel Policies, Procedures & Legal Provisions. Saves Mgt of guilty of offence in case of violations.

Audit of HR Climate HRM Climate has impact on Motivation, Morale and Job Satisfaction. Quality of Climate can be measured by examining: 1.Employee Turnover, 2.Absenteeism, 3.Safety Records 4. Attitude Surveys Employee Turnover: ETO Implies the process of Employee Leaving & Joining - deaths, transfers, retirements, resignations. High ET incurs increased costs Recruitment, Selection, Trg, Disruption of Prodn, QC-Problems, and Team & Morale Building. Certain % turnover is Unavoidable. Avoidable ETO causes Concern to HRM, gives excellent measure of HR Climate, as it can be reduced. Specific Actions can Minimize ETO - Better Hiring Practices, Orientation Trg, Working Conditions, Remuneration & Benefits, Advancement Opportunities. Quality ETO Better Than Quantity ETO

Absenteeism Refers to Failure on part of Employee to report for work. (Unauthorized Absence). It costs money and reflect dissatisfaction with Orgn. Unavoidable Absence sanctioned. Mgr must step in to remove causes of Avoidable Absenteeism night shifts, earning extra income, indebtness, and lack of job security, job dissatisfaction, and unfriendly supervision.

Accidents Organizations keep records. Accidents cost money and also reflect prevailing Org-climate. Managements must have Safety Plan, implement, Evaluate its Effectiveness.

Attitude Surveys Are Most Powerful Indicators of Org-climate. Attitudes determine employees feeling towards the Orgn, supervisor, peer & activities. ASs conducted thro face-to-face interviews or anonymous questionnaires. Resulting Info an

invaluable Insight What They Feel & Think. Useful to address Business Problems linked to Productivity, Turnover, Absenteeism, Tardiness, WorkGroup Effectiveness & IR.

Audit of Corporate Strategy HR Professionals do not set CS, but determine its success. CS gains competitive advantage. Assessing Orgn Internal Strengths & Weaknesses and its External strengths & opportunities enable Mgt gain advantage. Coy may adopt any Approach, HRM always affected. Understanding thro Audit, CS strongly influences HR planning, staffing, remuneration, IRs & other activities.

Audit and Human Resource Research Auditors highly rely on HRR Data. Research - systematic goal-oriented investigations of facts establishing relationship between two/ more phenomenon lead increased understanding of & improvement in HR Practices. HRR major Topics: Wage Surveys, Effectiveness of various recruitment sources, Effectiveness of Trg Efforts, supervisors Effectiveness Survey, Job Satisfaction Survey, Employee needs Survey, Attitude towards Reward Sys- Survey, High Accident Frequency Areas.

FIVE Approaches to HRA Auditors may choose any of the five approaches for the purpose of Evaluation. Comparative Approach. Outside Authority Approach. Statistical Approach. Compliance Approach. MBO Approach Comparative Approach Auditors Identify another Company as a MODEL. Result of their Organisation compared with those of Model Company. Outside Authority Approach Often, Auditors use standard set by Outside Consultant as BENCHMARK for comparison of own Results.

Statistical Approach Here, Statistical Measures of Performance are developed (Absenteeism, ETO rates) Based on companys existing information. These Data help auditors evaluate/assess performance.

Compliance Approach Auditors review Past Actions to determine if those activities comply with legal requirements and Company Policies, & Procedures. A Final approach is for Specialists & Operating Managers to set objectives in their areas of responsibility.

MBO Approach creates Specific Goals against which performance can be measured. Then the Audit Team Researches ACTUAL PEERFORMANCE and COMPARES WITH THE OBJECTIVES.

Audit Report The Prog comes to end with preparation of Report. Report may be Clean or Qualified. It is Qualified if HR Performance contains Gaps for which remedies suggested. Report is Clean where Performance is fairly Satisfactory http://knol.google.com/k/jiya-be-cool/human-resourceaudit/3pqxd1dfgwgt5/7? domain=knol.google.com&locale=en#
HR Audit
An HR audit assesses whether the HR function is delivering its mandate & roles The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization's HR functions. The audit works best when the focus is on analyzing and improving the HR function in the organization.

The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve. It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organization's mission and objectives can be realized. The audit process consists of a series of questions covering the eight primary components of the HR function :

The focus is on how these activities and tasks are actually performed in the organization.

Advantages of an HRD Audit

HRD audit is cost-effective and can give many insights into a company's affairs:

* Getting the top management to think in terms of strategic and long term businesss plans * Clarifying the role of the HRD department and line managers in HRD * Streamlining of other management practices * Better recruitment policies and more professional staff * Changes in the leadership styles of the top management * Improvements in HRD systems * More planning and more cost-effective training * Increased focus on human resource and human competencies * Strengthening accountabilities trough appraisal system and other mechanisms * TQM interventions

T.v.Rao HRD audit

Sorted by: date Sort by Date Sort by Title Refine your search Human Capital Measurement: Approaches, issues and case studies Robinson D, Hooker H, Mercer M; Report 454, Institute for Employment Studies; August 2008 (read a summary)

Evaluation of Coaching in the NHS Sinclair A, Fairhurst P, Carter A, Miller L; Report 455, NHS Institute for Innovation and Improvement; April 2008 (read a summary) Employee Engagement Robinson D; Opinion Paper OP11, Institute for Employment Studies; December 2007 Engagement: The Continuing Story Robinson D, Hooker H, Hayday S; Report 447, Institute for Employment Studies; October 2007 (read a summary) Is HRM evidence-based and does it matter? Rob Briner; Opinion Paper OP6, Institute for Employment Studies; March 2007 Practical Methods for Evaluating Coaching Carter A; Report 430, Institute for Employment Studies; November 2006 (read a summary) Customer Views of the HR Function: A Literature Review Baldwin S; HR Network Paper MP71, Institute for Employment Studies; September 2006 (HR Network members only) Reporting on Human Capital Management Hartley V, Robey D; Report 423, Institute for Employment Studies; April 2005 (read a summary) Stress Audits: What you Need to Know Newton L, Hayday S, Silverman M; HR Network Paper MP48, Institute for Employment Studies; April 2005 (HR Network members only) Evaluation of Reducing Risks, Protecting People Rick J; Research Report RR279, Health and Safety Executive; October 2004 (read a summary) The Drivers of Employee Engagement Robinson D, Perryman S, Hayday S; Report 408, Institute for Employment Studies; April 2004 (read a summary) Understanding Employee Opinions Robinson D; HR Network Paper MP27, Institute for Employment Studies; February 2004 (HR Network members only) Measuring Up: Benchmarking Graduate Retention Tyers C, Perryman S, Barber L; Report 401, Institute for Employment Studies; June 2003 (read a summary) Questions to Measure Commitment and Job Satisfaction Hayday S; HR Network Paper MP19, Institute for Employment Studies; March 2003 (HR Network members only) Kirkpatrick and Beyond: A review of models of training evaluation Tamkin P, Yarnall J, Kerrin M; Report 392, Institute for Employment Studies; October 2002 (read a summary) The Human Resource Function Audit: a six-step audit to review, measure and assess the role, contribution and performance of your organisations HR function Reilly P, Strebler M, Kettley P, Carter A, Tamkin P, Robinson D; Portfolio of Human Resource Audits, Cambridge Strategy Publications; October 1999

The Human Resource Information System Audit: a six-step audit to evaluate and improve the effectiveness and performance of your HR information system Robinson D; Portfolio of Human Resource Audits, Cambridge Strategy Publications; October 1999 The Human Resource Planning Audit: a self-assessment audit to analyse, estimate and plan the supply and demand of your organisations human resources Reilly P; Portfolio of Human Resource Audits, Cambridge Strategy Publications; October 1999 Measuring the Personnel Function Hirsh W, Bevan S, Barber L; Report 286, Institute for Employment Studies; June 1995 (read a summary) Measuring and Monitoring Absence from Work Seccombe I; Report 288, Institute for Employment Studies; May 1995 (read a summary)

Human resources and managment practice audits

The audit report will review current practices/performance, identify where best practices are successfully used as well as recommendations where there are improvement opportunities. The on-site portion of the audit will take 1-5 days depending on the number of sites, scope and organization size. Most written audit reports are completed with three weeks. A preliminary report can be available within one-week. Some of the areas reviewed include:

Status of Strategic Initiatives Recruitment Process (souring, interviewing, hiring, record keeping and orientation) Retention and Succession Plans Training Communication Policies and Procedures Performance Management Compensation Administrative Staff Levels and Functions Job Descriptions Regulatory Compliance Processes and Efficiencies

http://www.hraudit.com/practice.html
ORGANIZATION NAME INTERNAL CONTROL QUESTIONNAIRE PURPOSE: Audits help determine the effectiveness of an HR department and/or HR systems. They are a systematic, objective tool to assess regulatory or policy compliance in

the workplace. The following list of HR audit questions is not meant to be comprehensive to every organization, merely a representation of the types of questions that may be found in an HR audit. Department: Discussed with: Auditable Function: Human Resources Audit Checklist Date:

Question Management 1. Are HR goals in line with those of the organization? 2. Are workweeks identified and defined? 3. Are full-time and part-time hours defined? 4. Are shifts defined? 5. Is there open communication to and from the HR department? Hiring 1. Do job descriptions exist? 2. Are job descriptions up to date? 3. Are I-9 forms and acceptable documentation reviewed annually? Are job openings offered to current employees? 4. Are applicant references checked? 5. Are turnover rates monitored? 6. Are selection processes used with reference to the Uniform Guidelines? 7. Are all applicants required to fill out and sign an application form? 8. Are applicants asked to voluntarily identify their affirmative action information? 9. If applicable, do application forms

Yes

No

N/A

Comments

Question identify that the employment relationship at the organization atwill? 10. Do employment applications refrain from requesting protected information? 11. Are independent contractors accurately identified? 12. If the organization has a qualifying federal contract, is there an affirmative action plan? 13. Are all new hires reported to the IRS? 14. Are I-9s and medical information kept separately from personnel files? 15. Do new employees fill out W-4 forms? 16. Are W-4 forms sent to the IRS? New employees Are workplace policies in place? Do policies focus on your workplace? Are policies communicated? Are policies enforced? Is there an employee handbook? Is the employee handbook specific to your workplace? Do employee orientations take place? Are employees trained on policies and work rules? Are employees trained on discrimination issues?

Yes

No

N/A

Comments

Wages and hours Are compensation levels monitored and

Question reviewed? Are employees correctly designated as exempt or nonexempt per FLSA? Is there a formal pay structure? Is the compensation structured reviewed regularly? Is working time documented? Are paid time off (vacation, holidays, etc) structures developed? Are non-exempt employees compensated at least one and one-half times their hourly wage for any hours worked beyond 40? Is the compensation plan communicated to all employees? Are appropriate payroll withholdings performed?

Yes

No

N/A

Comments

Benefits Are employees informed about their benefits? Are Summary Plan Descriptions provided to plan participants? Are general COBRA notices provided to plan participants? Are employees allowed up to 12 weeks of leave under the FMLA? Are plan documents in compliance with ERISA? Are supervisors and managers trained to report employee absences of more than three days to HR for FMLA purposes? If there is a health care plan, is protected health information kept private? Are all Form 5500s completed and

Question reported?

Yes

No

N/A

Comments

Employee relations Is there a system for performance evaluation? Does the system check for effectiveness of the evaluation? Is quality and quantity of work evaluated? Is performance tied to compensation? Are workplace policies flexible? Are disciplinary actions for violating workplace policies flexible? Is there a process for employees to lodge complaints? Are there a variety of individuals to whom employees may lodge complaints (supervisor, HR representative)?

Safety and security Are safety hazards reported to the appropriate personnel? Are workplace accidents, near-misses, injuries, and illnesses reported and investigated? Are measures in place to prevent intruders from entering the grounds or buildings? Is bright, effective lighting installed indoors and outdoors? Are measures in place (access badges, traffic control, etc.) to keep unauthorized persons from entering the facility through normal entrances? Is there a reliable response system in place in the event an alarm is triggered? Are employees encouraged to promptly

Question report incidents, and suggest ways to reduce or eliminate risks? Are structures readily accessible to disabled employees? Are minors prohibited from performing hazardous work?

Yes

No

N/A

Comments

Discrimination and employee rights Are employees trained on discrimination issues? Are supervisors and managers trained in anti-discriminatory practices? Are employment practices in line with the various anti-discrimination laws? Are minors prohibited from working more than their hours allowed by the Fair Labor Standards Act? Are effective policies in place that prohibit retaliation against employees who exercise their rights?

Workers compensation Are injuries/incidents investigated? Is follow-up remediation performed where appropriate? Is regular contact made with employees out on lost time? Are return-to-work programs checked for effectiveness? Is contact made with medical providers? Are insurance premiums and competitive quotes reviewed on a periodic basis? Is the workplace environment maintained with safety in mind? Are state (new and existing) requirements monitored?

Question Employee separation Do exit interviews take place? Are final paychecks provided on time? Recordkeeping and other documentation Are personnel files current? Are all appropriate labor posters displayed in a conspicuous place? Are documents regarding employees kept for their required duration?

Yes

No

N/A

Comments