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Litreture Review on Hr Audit

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    REVIEW OF LITRECUTURE In a study conducted by T. V. Rao (1999), is reported that HR audit is a great deal of work as been in India regarding the use of HR as an organisation development intervention and is a unique feature of Indian organizations. HR audit has following result. The audit in several organization resulted in established several original system and process, such as potential and performance appraisal, career planning, training, monitoring.

    Formulation of clear cut polices including promotion policy communication policy reward and reorganization policy, etc. Helps in development trust, collaboration and teamwork. Human orientation gets injected into business process with opportunities for growth and development provided to all employees in team of their work leading to higher level of role efficacy. Nevado [1998] considers that the audit should also analyze if the personnel policies are in alignment with the general objectives and the global strategy of the company.

    It must also translate the HR strategy into plans and programs. Thus appears a new element of the audit of HR, the strategic audit. Dolan, Schuler, and Valle [1999, p. 390] define it as “the evaluation of the adaptation of the HR policies and practices in their support of the company’s general strategy. ” Brown [2000] considers that the measurements used to evaluate the company’s personnel reflect neither its value nor its performance.

    This is why he proposes an alternate procedure that consists of creating a human capital index based on four elements that must be carefully studied considering their relative importance to the company: the number of years in the business or field, the level in the company (by job grade or organizational chart level), the number and variety of positions or assignments held, and the performance rating, which is subjective. It is the result of an evaluation of an employee’s performance, which should include an evaluation by a superior and another of objective aspects such as sales, benefits, or other factors.

    Through the use of this index, the value that each employee has for the company would be obtained over a total of 100 points. This index is easy to calculate and interpret, and it is fair since it is based on a larger number of objective factors. Yet, it is very simple and does not supply information about the knowledge, abilities, values, managing experience, or other factors of each employee. To overcome this inconvenience, Brown has created a second index that attempts to measure the employee’s level of experience and aptitudes.

    Grossman [2000] proposes a three-pronged approach for the measurement of the HR function. First, according to this model, there should be efficiency measurements that help to determine the way in which the resources are being used. Within this group are the measurements of turnover, quits, and discharges as a percentage of total employees, average tenure of employees in various jobs, absenteeism, employee productivity, and intellectual capital. After calculating the measurements of efficiency, they must be compared to the results obtained in previous periods.

    Nevertheless, this is not sufficient, and it is critical to benchmark against others in the same industry or profession. When inefficiencies are revealed, careful analysis of the problem should follow before expenditures are slashed. These cover the efficiency side, but one must also look at the value-creation side. Thus, it is necessary to develop a new set of strategic measurements that connect directly with the mission and strategies of the company.

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