Conducting an organizational audit, reviewing formal and informal systems and procedures, helps an employer determine current and projected needs, provide protection from legal liability, as well as, prioritize issues of concern in terms of significance. Specifically, an HR audit will answer questions such as:
- What are our current formal and informal employment policies? Where can they be found; electronic, written or both? Who has access to them and how are they accessed?
- Are policies applied according following prescribed laws and consistently?
- Are all forms of required employee-related documentation in compliance?
- How do HR employees ensure state and federal labor law compliance?
- Are policies and procedures regularly updated? If so, are processes in place to monitor efficiency?
Human Resource audits allow employers to integrate systems to achieve business priorities. The audit process will look different based on the size of the organization and available resources. Big or small – all organizations should strive for a yearly HR audit. Checklists are a great way to get the ball rolling, a roadmap for an efficient audit. Let’s begin by discussing personnel files.
An audit should take into account the nine (9) primary roles of the HR function: HR information systems, recruitment, documentation, training & development, compensation & benefits, safety & health, performance management, termination & transition, and legal issues & personnel policies.
In part one of this blog we will discuss personnel files and performance management.
Personnel Files
Each employee should have a personnel file where important information is kept; some records are required by law.
- Employment application as completed by the employee
- Signed acknowledgements i.e. background, credit forms and results
- Signed offer letters, job movements (promotions, lateral changes)
- Signed acknowledgements of receipt for employee handbook, code of ethics, drug testing, electronic monitoring, confidentiality agreements, state mandated pamphlet/brochures and any other employer-employee agreements
- Sign-off sheets for any employee unique written agreements
- Records of time off/leaves of absence, FMLA, and vacation
- Forms required by state and/or federal law (examples include: Form I-9, W-4, E-Verify)
- Workers’ compensation and Unemployment insurance paperwork
- Direct deposit authorizations
- Performance appraisals/grievances/disciplinary documentation
- Termination and exit interview forms
It is particularly important for companies to stay on top of changing laws. Any law changes can affect what an employee must receive and how or when they receive it, not to mention updates to how the law is applied by HR team members.
Effective Performance Management
Have you created clear and concise performance expectations? This can be accomplished by reviewing job descriptions to ensure they are relevant and current. Attracting the right candidates starts with an internal evaluation of what the job entails and what types of skills are necessary for success. Once you have attracted the best talent, it’s time to keep the individuals by setting goals that align with the organizations core competencies.
Part two of conducting an HR audit will cover training and development and safety & health. Compliance Poster Company’s HR Research and Compliance Team tackles topics that can be potential compliance pitfalls. Need assistance with HR questions? Give us a call at 800.817.7678.