HOW TO DO HR AUDIT OF ORGANISATION : COMPLETE CHECKLIST

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Many of the articles asked me about how to do HR Audit of a Organisation. So I am providing the HR audit checklist for you all. This HR Audit checklist can be used in Internal Audit Department of the organisation. Or you can also use it while making HR SOP. If you think i have missed any area then you can comment below or you can also put your queries regarding HR Audit. Because i have done 2-3 HR Audits till now and I can share my experience with you.

HR AUDIT CHECKLIST :-

A. MANPOWER REQUIREMENT

Check that details relating to manpower requirement is informed to the management at least well in advance.-

• No. of Employees required
• Kind of Manpower required ( Skilled / Unskilled
• Qualification required ( Graduate/ PG / Professional )
• Experienced, Fresher or Trainee
• Budget

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B. Interview

1. Check that interview is taken by the committee appointed for the purpose, comprised of of at least three members or may be through proper channel like first HR Round then Technical.

• One Functional Head or Respective departmental head.
• Higher official – Unit Head
• One HR Manager or Executive

2. A proper form should be provided by the HR Executive, Which is duly filled by the candidates.

3. The interview is conducted at Unit level or HR Level for the first phase and then short listed candidates are interviewed by the higher management for final phase.

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C. Offer Letter

Offer letter should be given to the selected candidates within 2 -3 days for their acceptance

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D. After Appointment or Onboarding

Please Check that :-

•  Appointment letter is given on the date or within 3 days of joining.
• Employee Information form should be filled and documented within 3 days of joining.
• Terms and conditions associated with appointment should presents a clear picture.
• Complete code of conduct should be provided to the candidate who thoroughly reads it
• Code of Conduct sheet shall be updated on timely basis.

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E. Training & Development

• There must be proper training calendar for all employees.
• Lock-in-period of at least one year on completion of probation/ Training period.
• Performance Management Document should be present

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F. Statutory Compliances Relating To HR :

1. Check for Applicability of various acts and Their due compliance by HR Executive-

• The Apprentices Act,1961
• The Employee’s Provident Fund and Miscellaneous Provisions Act,1952
• The Employee State Insurance Act,1948
• The Factories Act,1948
• The Minimum Wages Act,1948
• The Payment of Bonus Act,1965
• The Payment of Gratuity Act,1972
• The Payment of Wages Act, 1936
• The Trade Union Act,1926
• The Workmen’s Compensation Act
• Factory and Boilers Act
• The Industrial Disputes Act, 1947
• Contract Labour (Regulation and Abolition) Act
• The Industrial Employment (Standing Orders) Act
• Air (Prevention and Control of Pollution) Act, 1981
• Water ( Prevention and Control of Pollution) Act
• The Environment (Protection) Act
• Noise Pollution (Regulation and Control) Rules,2000
• The Personal Injuries (Compensation Insurance ) Act, 1963

2. All the required registers and documents as per above applicable acts should be maintained.

3. Various challans are paid on time. For eg. Challan for PF has to be paid by 15th of next month and Challan for ESI has to be paid by 20th of next month)

4. Consolidated HR records are sent to the HR head for the group including details about all the compliances made by the Company by 20th of next month in a prescribed format.

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G. Attendance

1 Daily attendance is taken either in morning or evening in Attendance Register ( Now a days this is done through ERP)

2 Separate register is maintained for daily workers & staff on probation period

3 This register is checked and signed by Executives of two different Department (i.e. by HR Executive and Unit head)

4 Gate pass register should be maintained. Entries relating to all visitors is made in the register and at the end of the day it is verified by Admin department.

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H. Salary And Wages Procedure

         Check that :-

1 Pay scale and salary structure of the labour & staff should be uniform

2 Calculations of allowances, deductions etc should be according to the provisions and rules .

3 Person making the salary and processing the payment should be different.

4 Salary payment by the first week of next month.

5 Proper workings of salary sheet should be maintained and its authorisation thereon. If payroll processing is outsourced a proper report should be asked from them.

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I. Leave Procedures

Leaves taken by employees are classified in Paid, Casual, Sick Should be allowed as per the HR Policy

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J. Termination or resignation

Proper notice period should be served by the employee and full and final clearance thereof before resignation/termination as per HR Policy.

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K. Promotion Management System

1 After completion of at least 12 months of service, promotion or hike in salary should be done on the basis of performance appraisal and as per management decision.

2 Bonus amount would be calculated depending upon the employee performance and at the decision of the higher management.

3 Employees should submit Self Appraisal Performance Report on quarterly basis to his manager and manager should review the same and transfer it HR Team

4 Employee birthdays, Marriages and anniversaries should given due consideration and token of gift should is sent on behalf of the Company.

5 A suggestion or a complaint box should be kept and it is the responsibility of the HR Department to check the same and reporting the same to the higher management .

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L. REIMBURSEMENT OF EXPENSES TO EMPLOYEES

Expenses are reimbursed to the employees incurred for official purposes as per the reimbursement policy of the organisation.