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Human Resources Audits
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 reeal the strengths and wea!nesses in the nonprofits
human resources system, and any issues needing resolution. The audit wor!s "est whenthe focus is on analyzing and improing the HR function in the organization.
The audit itself is a diagnostic tool, not a prescriptie instrument. #t will help you identifywhat you are missing or need to improe, "ut it cant tell you what you need to do to
address these issues. #t is most useful when an organization is ready to act on the
findings, and to eole its HR function to a leel where its full potential to support the
organizations mission and o"$ecties can "e realized.
Who should conduct the audit?
The team that is responsi"le for the audit should represent a cross%section of the
organizations staff, including line staff, middle and upper management, and thoseresponsi"le for HR functions.
How should it be conducted?
The audit process consists of a series of &uestions coering the eight primary components
of the HR function'
Roles, head count, and HR information systems (HR#)
Recruitment
ocumentation
Training, deelopment, and career management
*ompensation and "enefits
+erformance measurement and ealuation Termination and transition
egal issues and personnel policies
The team wor!s to collect information to answer the HR audit &uestions in each of these
categories. The focus is on how these actiities and tas!s are actually performed in theorganization. The first step is to collect all the pertinent information. The process of
getting information, in and of itself, can "e &uite informatie.
How are needed improvements identified?
-nce information is gathered, the audit team reiews each ma$or section and notes
disparities "etween paper (what we thin! or say we do) and practice (what we actuallydo, as reealed "y the answers to the audit &uestions). This can then "e compared to "est
practice (what we should do to "est support our organizations mission).
A cautionary note:inding out what is insufficient and inade&uate is the first steptoward improement. #f deficiencies are identified, it is important to ta!e steps to correct
those deficiencies. -rganizations should ta!e that first step only when they are ready to
act on the findings, and to ma!e necessary improements in their HR s!ills, processes,
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and systems.
How is follow-up and correction done?#mproing the HR system ta!es some time. A wor!plan / with a timeline,
accounta"ility, and deliera"les / should "e created after the team reiews the
completed audit and identifies areas where improement is needed. ollow%up and reiewshould "e a regular management function, performed on an ongoing "asis.
Roles, Head Count, & Human Resource nformation !ystems "HR!#
How many employees are currently on staff0
How many employees are'
o Regular
o +ro"ationary
o Temporary
o ull Time
o +art Time
o 1xempto 2on%1xempt
3hat is the definition of a part%time employee0 (i.e., 3hat is the maximum
num"er of hours an employee can wor! to "e considered part%time0)
3hat is the minimum num"er of hours an employee has to wor! to "e considered
full%time0
How long is the pro"ationary period0
Are employees aware of their status0
How long can an employee "e temporary0
How many employees hae superisory responsi"ility0
Are there currently up%to%date $o" descriptions for all employees0 #f not, which
ones dont hae descriptions0 Are independent contractors used0 #f so, how many are "eing used0 And, for what
functions0
#s the 45 point test for #ndependent *onsultants "eing used for classification0
Hae issues related to classification of employees "een raised0
Recruitment
How did the wor! force get to "e the current size0
3hat are some of your organizations future needs for personnel0
3hat are the procedures for hiring in your organization0
3hat recruitment sources are used0 (e.g., adertisements, referrals from other
agencies, personal contacts) Are current employees gien appropriate consideration for promotion or lateral
position changes0
3ho does the preliminary screening of candidates0
3ho selects candidates for interiews0
#s training proided for those who conduct interiews0
How is the recruitment, screening, and selection process documented0
3hat is the interiew process that is used (e.g., indiidual, se&uential, panel)0
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3ho holds final authority to hire0
3ho chec!s references0
How are the reference chec!s documented0
3ho ma!es the offer of employment0
3here is the hiring paperwor! generated0
3ho negotiates compensation pac!ages0 ist the practices you "eliee are uni&ue to your organization.
3hat is the turnoer rate (percent of employees leaing each year) in your
organization0 Has this changed oer time0
3ho gies references for former employees0
$ocumentation
3here and with whom are the personnel files currently held0
3hat documents are held in personnel files0
How are the following documented "y your organization0
o Hiring' Application, #nteriewing, and Reference *hec!s
o *ompensation and 6enefitso Transitions
o +aid Time -ff
o Training
o iscipline
o 3or! History
o 3or! Assignments
o ignificant accomplishments
o 1mergency contact information
o +erformance ealuation and performance management
o Termination
How long are files held and where are they stored after employees leae0 3hat is the interface "etween HR and inance0
#s a payroll serice used, and if so, which one0
oes the payroll serice proide all goernmental employment filings0
#s there training of managers and employees a"out personnel files, and policies
and procedures for accessing them0 How is +aid Time -ff documented0
3hen re&uests for information are made to your organization, who fills the
re&uest0
#s an HR# system "eing used, and if so, which one0
%rainin, $evelopment and Career 'anaement
3ho is responsi"le for new employee orientation0
3hat are the elements of the new employee orientation program0
3here and to whom do new employees go when they hae &uestions a"out your
organization or their $o"s0
#s there a formal training program for employees and managers0 #f so, please
descri"e it.
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3hat training and deelopment initiaties hae occurred in your organization0
How are managers and superisors trained and prepared for their roles0
3hat is the aerage length of time an employee stays with your organization0
oes this ary "y position type0
How much does your organization spend annually (in total and per employee) on
employee training and deelopment0 oes this ary "y position type0
Compensation and (enefits
(asic Compensation )uestions
#s there a formal compensation program0
How are wages set0
Are formal salary ranges set0
#f formal salary ranges are set, are they made pu"lic to employees0
How are $o"s rated0
How fre&uently are $o"s re%ealuated or updated0
Are any salary sureys used0 #f so, which ones0 Are pay ranges reised as a result of these sureys0 How fre&uently0
3ho in your organization (what position) administers the compensation program0
Are *-As gien, and if so what is the "asis for the *-A0
Are merit increases gien, and if so, are they integrated with performance
ealuation0
#s there a "onus system, and if so how is it structured0
How is the compensation program and total compensation pac!age communicated
to employees0
3hat are the 7cultural issues8 or "eliefs related to compensation in your
organization0
How is employee communication regarding compensation and "enefits delieredin your organization0
Health and Welfare (enefits
escri"e the health insurance program proided "y your organization.
Are dependents coered, and if so, in part or in full0
Are domestic partners coered0
3hat are the eligi"ility re&uirements for health insurance and other "enefits0
3hich of the following health and wellness "enefits are offered, and what are the
limits and re&uirements for coerage0
o ental
o 9isiono isa"ility
o 1mployee Assistance +rogram
o ife #nsurance
o -ther wellness "enefits
o lex "enefit plan
o -ther "enefits
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3ho has organizational responsi"ility for legal or employment &uestions0
#s harassment training regularly proided0
How are employee grieances dealt with0