- Database and information system. HR audit
The larger the organization and the more decentralized its structure, the greater the need for control over human resources.
The word control has many connotations and its meaning depends on its function or the specific area in which it is applied.
It can be the administrative and managerial function of control. In this case. Control is part of the administrative process, together with planning, organization and management.
It can be the set of means of regulation of a system or organization. This is the case of the specific tasks that the controller applies in a company. Control in an automatic system that maintains a constant degree of flow or operation of the total system. The control mechanism detects any deviation from normal patterns and allows for proper process regulation.
It can be the restrictive function of a system to keep the members within the desired parameters. This is the case of the frequency control and personnel file.
For Sherwin, the essence of control is action that adjusts operations to predetermined patterns, and its basis is the information managers receive. Koontz and O'Donnell believe that control is the administrative function that consists of measuring and correcting the performance of subordinates, in order to ensure that the company's objectives or the plans outlined to achieve them are carried out.
Control is not only about verifying if everything is in accordance with the adopted plan, the instructions issued and the established principles, it aims to point out the failures and errors to rectify them and avoid re-offending them. It applies to everything: things, people and acts.
CONTROL PROCESS
Control is carried out through a series of stages, which form a process.
Every control is made up of four stages:
1) Establishment of desired patons.
2) Observation of performance.
3) Comparison of performance with desired patterns.
4) Corrective action.
The control process acts in the sense of adjusting operations to certain previously established patterns and works according to the information it receives. This information enables corrective action to be taken which is the basis of control. Control involves a comparison with previously established patterns to allow corrective action to be implemented when a deviation occurs that cannot be accepted.
Appropriate corrective action may involve exercising authority and direction, although not necessarily in all cases.
The appropriate corrective action may also be the revision and alteration of the existing patterns, given that they were improperly established, to adjust them to the reality of the facts or the possibilities of the company.
Management creates mechanisms to control all possible aspects of the company's operations. For both, the main uses of business controls are:
1) Standardize performance, through inspection, supervision, written procedures, or production schedules;
2) Protect the company's assets from theft, waste and abuse, by requiring written records, audit procedures and division of responsibilities;
3) Standardize the quality of products or services offered by the company, through personnel training, inspections, statistical quality control and incentive systems;
4) Limit the authority that is being exercised by the different instances of the company, by describing positions, guidelines and policies, rules and regulations and auditing systems;
5) Measure and direct the performance of employees using personnel performance evaluation systems: direct supervision, surveillance and recording, including information on production.
The ARH is a line responsibility and a staff function, which has some operations and controls centralized in the staff body and others decentralized and distributed in the line bodies. An integrated system for collecting, processing, storing and supplying important human resource information is necessary so that both recommendations and staff services and line decisions are appropriate to each situation. The important thing is that within the organization there is a human resources database that is capable of supplying a personnel information system, in addition to an audit system capable of regulating its operation.
DATABASE AND INFORMATION SYSTEM
From the point of view of decision theory, business organization can be understood as a series of large information networks that link the information needs of each decision-making process with data sources. Although these information networks are separated, they overlap and interact.
DATA AND INFORMATION CONCEPTS.
Data are the elements that serve as the basis for solving problems or for the formation of judgment. A data is only an index, an objective manifestation possible to be analyzed subjectively, that is, it requires interpretation of the individual to be able to handle it. In itself, each data has little value. Data allows information to be obtained when they are classified, stored and related to each other.
Isolated information is also meaningless, it requires processing so that it can acquire meaning.
The term data processing designates the great variety of activities that are carried out both in organizations, in social groups, and between people: There is a certain volume of initial data or information (in the files, in the expectations or in the minority) to which are added other data or subsequent information (greater volume of data, alterations, modifications) causing a new volume of data or information. In this way, data processing is the activity that consists of accumulating, grouping and crossing data to transform it into information or to obtain other information.
Data processing can be:
1) Manual: when it is done manually, using cards, checkbooks, maps, etc., with or without the help of typewriters or calculators.
2) Semi-automatic: when accounting machines are used in which the operator enters tokens or checkbooks one after the other and after receiving the token and initial data, the machine performs numerous consecutive operations already programmed without the intervention of the operator.
3) Automatic: when the machine programmed to perform a certain set of operations develops the entire sequence without the need for human intervention between one cycle and the next.
DATABASE IN HUMAN RESOURCES
The database is a system of storage and accumulation of data properly classified and available for processing and obtaining information. In reality, the database is a set of logically related files organized in a way that improves and facilitates access to data and eliminates redundancy. Information efficiency is increased with the help of the database, because logically related data enables simultaneous and integrated updating and processing. This reduces inconsistencies and errors that occur because double files are presented. It is quite common for software to run the functions of creating and updating files, retrieving data, and generating reports.
The human resources area, the database can obtain and store data from different strata or levels of complexity, namely:
1) Personal data of each employee that make up a personnel record.
2) Data on the occupants of each position, which make up a register of positions.
3) Data of the employees of each section, department or division, which constitute a registry of sections.
4) Data on wages and salary incentives, which constitute a record of remuneration.
5) Candidate data (candidate registry), courses and training activities (training registry), etc.
The human resources information system obtains data and information from employees, the business environment, the external environment (labor market, and legal restrictions, etc.) and the macroenvironment (economic, political, etc.) this data flow. experiences harvesting, processing, and utilization work.
The development of an information system must take into account the concept of the operational cycle traditionally used in accounting. This concept locates chains of events that start outside the company, include a main chain of events within the organization, and end at a point outside the company. This allows to precisely identify a starting point and an ending point that are related to each other by chains of events. Once the start and end points have been specified, the risk of projecting an information system for only a part of the information flows is avoided.
The information may be external to the company (labor market, human resources market, wage market, labor legislation, unions, regional labor organizations, etc.) or internal to the company (registration of employees, positions and occupants, etc.).
On the other hand, the information can be directed to the institutional or strategic, intermediate or operational level, whether it refers to decisions, monitoring and control or execution, respectively. Either way, an integrated human resources information system must group a variety of information obtained from data from various sources.
HUMAN RESOURCES INFORMATION SYSTEM
Information system is a set of interdependent elements (subsystem), logically associated, so that from their interaction the information necessary for decision-making is generated. As the ARH is a line responsibility and a staff function, the ARH agency must supply all agencies with important information about the personnel that exists in each of the agencies, so that the respective chiefs manage their subordinates in a adequate.
Assembling a human resources information system requires systematic observation and analysis and evaluation of the company, or its subsystems, and their respective information needs. An information system must identify and group all the networks of information flows so that it is projected towards each group of decisions. In essence, the information system is the basis of the organization's decision-making process.
Planning an HR information system
A human resources information system uses, as a data source, elements provided by:
- Human resources database. Recruitment and staff selection. Training and development of personnel. Performance evaluation. Salary administration. Registration and control of personnel, regarding absences, delays, discipline, etc., Personnel statistics. Hygiene and security. Respective headquarters, etc.
The HR information system must be planned and implemented to achieve certain objectives. The achievement of these objectives is what will make it possible to evaluate the effectiveness of the system: Make it possible for line organizations to make adequate decisions regarding people.
AUDIT OF HUMAN RESOURCES
Human resources auditing can be defined as the analysis of a company's personnel policies and practices and the evaluation of its current operation, followed by suggestions for improvement. The main purpose of the human resources audit is to show how the program is working, locating practices and conditions that are detrimental to the company or that are not justifying its cost, or practices and conditions that must be increased.
The audit is a review and control system to inform management about the efficiency and effectiveness of the program it carries out.
Evaluation and control patterns in human resources
The human resources management system needs employers capable of allowing a continuous evaluation and systematic control of its operation.
Standard in criteria or a model that is previously established to allow comparison with the results or with the objectives achieved. By means of the comparison with the standard, the results obtained can be evaluated and verifying that adjustments and corrections must be made in the system, in order for it to work better.
Various patterns are used, this can be:
1) Quantity patterns: they are those expressed in numbers or quantities, such as number of employees, percentage of employee turnover, number of admissions, accident rate, etc.
2) Quality standards: those that are related to non-quantifiable aspects, such as employee selection methods, training results, performance evaluation operation. Etc., 3) Patterns of time: they consist of the speed with which newly admitted personnel are integrated, the average permanence of the employee in the company, the processing time of personnel requisitions, etc.
4) Patterns of cost: are the direct and indirect costs of staff turnover, accidents at work, social benefits, social obligations, cost-benefit ratio of training.
The standards allow evaluation and control through comparison with:
1) Final results: when the comparison enters the pattern and the variable is made after the operation has been performed. The measurement is made in terms of something quick and finished, at the end of the line, which presents the drawback of showing the successes and failures of an already completed operation, a kind of death certificate of something that has already happened.
2) Performance: when the comparison between the pattern and the variable is made simultaneously with the operation, that is, when the comparison accompanies the execution of the operation. Measurement is concomitant with operation processing. Although it is carried out simultaneously, what it means is that it is current, the measurement is carried out on an operation in process and not yet finished.
Comparison is the function of verifying the degree of agreement between a variable and its pattern. The ARH is in charge of planning, organizing and controlling the activities related to the life of the personnel in the company. Part of the execution of these activities is carried out by human resources organizations, while so many parts of it are carried out by various line organizations. In this way, the human resources activities planned and organized in advance show, during their execution and control, some difficulties and distortions that need to be diagnosed and overcome, in order to avoid further problems. The speed with which this is done depends on a permanent review and audit, capable of providing adequate feedback so that the positive aspects can be improved and the negative ones,correct and adjust.
The audit function is not only to point out flaws and problems, but also to present suggestions and solutions. In this sense, the role of human resources auditing is fundamentally educational. Even when the audit is well carried out, it allows the development of administrators' sensitivity to diagnose problems.
INFORMATION SOURCES
The human resources audit is based on verifications, follow-ups, records and statistics.
BROADNESS AND DEPTH OF ACTION OF THE AUDIT
Human resources auditing can cover as broad a coverage as the ARH functions themselves and has a division similar to the sectional divisions of the ARH agencies.
Audits usually begin with an assessment of the business relationships that affect human power management, including line and staff personnel, the qualifications of human resources staff members, and the adequacy of financial support for various programs.. From there a variety of patterns and measurements are applied, the depth scale of which depends on the type of examination to be carried out. Personnel records and reports are examined. An examination report is analyzed, compared and prepared, which almost always includes recommendations for changes and alterations.
The audit can also evaluate programs, policies, philosophies, and theories. Depending on the policy that exists in the organization. Rh auditing can focus on any or all of the following productivity aspects.
1) Results, which include both achievements and problems considered effects of ongoing administration;
2) Programs, which include the detailed practices and procedures that comprise them;
3) Policies, both explicit and formalized as well as implicit;
4) Administration philosophy, its priorities of values, goals and objectives;
5) Theory, assumed relationships, and plausible explanations that detail and relate philosophies, policies, practices, and continuing problems.
The larger and more decentralized the organization, the greater the need for systematic audit coverage.
The audit can develop a strong educational impact, since it enables the quality of human resource management to be related to the various efficiency indicators of the company. It allows to observe to what extent the administration was successful in the personal identification of the employees with the processes of the organization and the acceptance of the organizational objectives.
The audit may also present indicators of leadership quality, work motivation, poor supervision, and continued growth and development of employees and managers taken individually.
The audit allows verifying:
- To what extent human resources policy is based on an acceptable theory, to what extent the practice and procedures are adequate to such policy and theory. In essence, it is about evaluating and measuring the results of the ARH in the activities of greater or lesser priority, such as: Indicators of efficiency and effectiveness in terms of staff formation, training and development, remuneration, social benefits, relationships union, etc., Clarification of objectives and expectations regarding ARH in terms of quantity, quality, time and cost; Use of resources and results obtained; Contribution of ARH in the objectives and results of the company; Organizational climate, development and incentive to personal creativity.
THE HUMAN RESOURCES AUDIT AGENT
Some companies hire an external consultant, other companies use their own staff and form audit committees, which are coordinated by the director of human resources or the manager of industrial relations. Others form commissions and hire the external consultant to guide them.
Yoder highlights the role of auditing for him, the various variations that appear simultaneously seem to have influenced the tendency to systematize formal examinations of industrial relations.
The most important changes that alter the HR audit scenario are:
1) Change in administrative philosophies and theories.
2) The change in the role played by the government and its increasing intervention in order to monitor the administration of human potential and protect the interests of employees, increasing economic security and guaranteeing full employment;
3) The expansion of unions and the bilateral determination of employment policy, with frequent criticism of administrative competition in industrial relations;
4) Frequent salary increases, which imply a higher cost of labor and greater opportunities to develop a competitive advantage in personnel administration;
5) The change in skills required for some technical and professional workers who present more difficult administrative problems and a more critical attitude towards administration;
6) Increased expenses for the industrial relations staff divisions, which implies a higher proportion of personnel and higher salaries for the industrial relations specialists;
7) More aggressive international competition, resulting from the expansion of the circle of industrialization, which destroyed the myth of the old advantage enjoyed by North American companies.
The audit agent can be a specialist, an external consultant or an internal commission; In any case, the HR audit has a strong educational impact on the organization.
HR ACCOUNTING AND SOCIAL BALANCE
In purely accounting terms, the human being seems to escape any direct and immediate quantitative evaluation. However, the human factor is not included in this evaluation. The human element must be placed at the center of concerns, not only in administration but also in accounting.
Man is an asset to the company, and like all other assets it is necessary to know the cost of obtaining this asset and its law of amortization or return.
Every asset must be profitable, taking into account the objective of the company, that profit.
The social balance seeks to recapitulate in a single document the main data that allows us to appreciate the situation of the company in the social domain, record the achievements made and measure the changes that occurred during the reference year and during previous years. Thus, the social balance sheet must contain information about employment, remuneration, social obligations, hygiene and safety conditions, staff productivity, disturbances (turnover, absenteeism, labor conflicts), labor relations, etc.
The social balance should reflect not only the relationships between the company and its staff, but also the relationships between the company and society as a whole, thus including information on the following categories of social groups:
1) Employees: constitution, characteristics, remuneration, social obligations, development potential, promotions, working conditions, etc.;
2) The shareholders: constitution, characteristics, applied risk capital and financial result;
3) Customers and users: constitution, characteristics, level of production and sales, etc.;
4) Suppliers of raw materials and equipment: constitution, characteristics, so that they can assess the solvency and profitability of the company;
5) The local, regional and national entities, related to aspects of environment, control, operation, etc., of the organization;
6) Public authorities in general.
In this way, the social balance tries to demonstrate the relationships that exist between the company and its social groups, as well as the social or partner influence and the social impact exerted by the company. It seeks to reflect the various flows between the organization and its environment.
CLASSIFICATION OF SOCIAL ACCOUNTS
We can classify four categories of social accounts.
1) The social accounts reduced to analysis in terms of social costs, related to the main social groups that make up the organization, such as:
- Personnel: investments or ordinary annual expenses related to improvements in working conditions or hygiene and safety and security, as well as in terms of training personnel, expenses to improve the quality of life of staff and their family (restaurants, hostels, vacation spots, clubs, etc.) Clients or users: investments (research, quality control facilities, product or service improvement) that seek to provide greater consumer protection;
2) Collectivity: expenses to reduce pollution, urban improvement, physical environment, works of collective interest, etc.
3) The social accounts in which the shares have a social purpose are evaluated simultaneously in terms of monetized costs and in terms of non-monetized impacts. The aim is to improve the previous item, in which the social product is known, however it is not evaluated in precise monetary terms. In this way, in addition to a defined financial benefit, a social benefit is included that cannot be expressed in monetary units, but in better working conditions, increased education or culture, reduced pollution.
4) Social accounts in which social costs and social products are monetized to determine a liquid social result for each type of social group that makes up the company, and by algebraic sum in global result. The only characteristic example of this category is the social balance model in which all assets are expressed in money and in which the principles of double entry are fully respected, and there is an account for each of the following groups:
a) Employees;
b) The company;
c) The general public and the community, d) The shareholders;
A liquid social result (social benefit or social loss) is calculated in the account of each group. The algebraic sum of these social results allows evaluating the company's social contribution, which can be positive or negative, to the whole of society, by accounting year.
5) Social accounts that essentially seek to show how, over time, the part of wealth created by the company evolves and how it is distributed among the various social groups. This model starts from a certain idea of social justice concealed in a political conception of society: it tries to demonstrate the fact that the liberal economy can provide the material well-being of all social groups and show how the profits of the company are distributed among the different social groups, especially in nationalized or mixed economy companies.
This type of accounting presents a table of annual distribution or superposition of value added among the various social groups, and considers two successive periods to demonstrate:
- If the total production of the company improved from one period to another and in what proportion; If additional productivity occurred, how was this benefit provided and how was it distributed in each of the social groups.
Those that supply the resources (inputs) are generally:
a) Suppliers (raw materials)
b) Employees (staff)
c) The shareholders (goods and equipment)
Those who obtain the goods produced by the company are the customers. The state systematically benefits from the profits from production through taxes. Thus, if there is an increase in productivity, the question is to know who benefited and in what proportion.
The overlap accounts show how this distribution changes over time, constituting a valuable instrument of social leadership for the management of the company, a means of negotiation with the unions, as well as a means of political orientation for the government.
SOCIAL RESPONSABILITY OF THE COMPANY
The social balance shows the concept of social responsibility of the company.
Social responsibility does not mean the socially responsible action of its members, nor charitable activities, but the company's commitments to society in general and more intensely with those groups or part of society with which it is most in contact.: with its homework environment. Social responsibility is oriented towards the company's attitude and behavior towards social demands, as a consequence of its activities. This implies the evaluation and compensation of the social costs that it generates and the expansion of the scope of its objectives, defining the social role to be developed in order to achieve, with all this, legitimacy and responsibility vis-à-vis the various human groups that integrate and reign in society as a whole.
The company is successful and efficient when it achieves its objectives and is capable of meeting the needs of its environment.
The company's social responsibility occurs as soon as it complies with the legal requirements and contracts, constituting a response of the company to the needs of society, internalizing what is good for society and responding to what society expects of the company.. This responsibility is conditioned by the social, political and economic environment, by the groups and organizations involved and by time.
The social balance thus emerges as an instrument to define and define the company's social responsibility. For this reason, the implementation of the social balance has three stages:
- Political stage: it is the phase of awareness by the management of the company, regarding the need to implement the social balance as a public relations instrument; Technical stage: when the demand for a partner information system arises and the demonstrates that the social balance is a valid instrument for this; Stage of integration of social objectives: when the decision-making process begins to integrate the new social objectives, as a reflection of the idea of social responsibility at the various levels of the company.
Consequently, the social balance becomes an information system directed to the public regarding the socially responsible behavior of the company.
In essence, the social balance seeks to express a set of indices and indicators that express the levels of each of the variables that are taken as important by the company to enforce its social responsibility. The social balance tends to show whether or not the organization is doing a good job, whether from the point of view of its employees, its shareholders, its customers, the general public and the community.
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