Executive expectations, increasing competition, and increasing diversity in the workforce are challenges for an organization's HR manager. More than ever, HR is expected to effectively contribute to the company's competitive advantage.
Personnel is an increasingly important factor in the process of differentiating one company from another. The HR function has become an essential factor for corporate success. HR must align to the business strategy so that it becomes a strategic partner of the organization. But the HR objective is not only this, it must also cover the objectives of a social, functional and personal nature, being in this way a department with ACTIVE PHILOSOPHY, a concept that will be discussed later.
When evaluating its performance, HR cannot start from the assumption that how much it does is well done. By verifying your activities, HR can detect problems before they become serious obstacles.
An evaluation of past practices and current policies may also reveal approaches that no longer correspond to reality and that need to be changed to help HR better fulfill the task of facing new challenges.
Why evaluate?
The evaluation of practices and research on best procedures (BENCHMARKING - BEST PRACTICES) are becoming increasingly important due mainly to three reasons:
- The work carried out by HR is of great importance due to the legal implications that it entails for the company. A mistake can lead to costly adjustments or lengthy procedures. The costs generated by personnel activity are very significant. Compensation and benefits to personnel, together with wages and salaries, constitute a significant percentage of the annual expenses of organizations. HR activities are directly related to the productivity of the organization and the quality of the work environment.
AREA COVERING THE ARH AUDIT
An ARH audit covers all the activities carried out by this department, as well as the personnel activities carried out by the line managers. It can include a division of the company, or the entire organization. Provides feedback on how line managers are fulfilling their staff roles, as well as on the performance of HR specialists.
Benefits
- It helps to clarify the functions of the department and leads to a greater degree of uniformity in all practices, especially in the cases of organizations that are geographically dispersed. It identifies problems and ensures compliance with legal provisions.
The audit involves a systematic verification, that is, it transcends the limits of the HR department for a clear reason: the department does not perform in isolation. Its success or failure depends on the actions it takes regarding the company's human environment.
When evaluating the HR function, all the relevant angles are verified, that is, the aspects that make the DIAGNOSIS and the IMPROVEMENT PLAN:
- Identify the person responsible for each activity Determine the objectives proposed by each activity Verify the policies and procedures used to achieve these objectives Sample the records of the personnel information system to determine if these policies are being properly applied and the Procedures Prepare a report specifying again the objectives, policies and procedures Develop an action plan to correct deviations in objectives, policies and procedures Follow up on the action plan to establish whether the problems detected by the evaluation were resolved.
Main areas covered by the audit
| ARH INFORMATION SYSTEM | |
| HR PLANS
· Estimates of offers and demands · Personnel inventories · Substitution and replacement plans |
POSITION ANALYSIS
· Job levels and standards · Job descriptions · Job specifications |
| COMPENSATIONS
· Levels of wages and salaries · Package of benefits · Personal services |
EQUAL OPPORTUNITIES
· Communication of opportunities Fair promotions · Equality of standards |
| STAFF INTEGRATION AND DEVELOPMENT | |
| RECRUITMENT
· Sources · Availability of candidates · Applications and bank of applications |
SELECTION
· Selection fees · Selection procedures · Tracing |
| TRAINING AND GUIDANCE
· Orientation program · Training objectives and procedures · Training effectiveness rates |
PROFESSIONAL DEVELOPMENT
· Development program · Promotion plans · Successful relocation movements |
| CONTROL AND EVALUATION OF THE ORGANIZATION | |
| PERFORMANCE EVALUATION
· Standards and performance measurements · Performance evaluation techniques · Assessment interviews |
LABOR RELATIONS ADM
· Administration of the collective agreement · Economic valuation of the collective contract · Procedures for conflict resolution |
| HR CONTROL
· Communication from and to employees · Disciplined procedures · Change and development procedures |
ENVIRONMENT QUALITY
· Potential for conflict · Quality circles (or equivalent) · Rotation rate |
| ARH FUNCTION AUDIT | |
| · HR function
· Line managers · Feedback on the HR function |
Audit of the HR functions of the Line Managers
The way line managers carry out their HR function and the way policies and procedures are applied are considered.
By detecting irregularities and applying corrective measures in the HR function of line managers, the department can help align their management by helping them achieve their goals.
Due to the fact that HR fulfills a function of STAFF, that is, that it provides services to the organization, these actions will improve its overall contribution to the organization.
Audit of the level of employee satisfaction
HR departments that act effectively achieve company goals but also contribute to employee goals. When employee goals and needs are not addressed, turnover rates, absenteeism, and conflict tend to rise.
The sources from which information can be obtained to help assess how the needs of the staff are being met are:
- Salary Levels Benefits Supervisor Practices Career Planning Assistance
- Feedback that employees receive from their performance.
Human Resources function evaluation process
THE INVESTIGATION FOR THE ARH AUDIT
The objective of the research in the HR area is to improve the organization's human resources management.
In this way, the research seeks that the service that HR provides to the organization is a QUALITY service, that has its clients well identified, their needs and the requirements necessary to achieve total satisfaction of their clients are being met..
Research techniques. Approaches.
Comparative approach
It is the simplest form of research. The evaluation team compares the section under study with another similar entity. It is frequently used for the evaluation of absenteeism, turnover rate and salary levels. It is also very useful when testing a new procedure.
External consultant
The standards established by it or by specialized publications serve as an evaluation parameter.
Statistical approach
It consists of the development of statistical performance measurements, based on the company's information system. From existing records, statistical standards are generated by which deviations can be detected. A statistical approach is usually complemented by comparisons made with respect to external information. This information is frequently expressed in the form of fees.
Retrospective focus on achievements
Check past practices to determine deviations from legal requirements and organization policies and procedures. Key documents on hiring, compensation, discipline, and performance evaluation are reviewed.
Focus on objectives
Specific objectives are created, against which performance can be measured. In this way, the evaluation committee can compare the results in fact with the postulates. It can also measure the tendencies that prevail in the organization towards the achievement of the objectives.
Neither of these approaches can be applied to all ARH activities. Most commonly, evaluation committees employ various strategies, depending on the specific activities they wish to study.
Unfavorable feedback leads to taking corrective action that improves everyone's contribution to HR activities.
INSTRUMENTS FOR CARRYING OUT PERSONNEL INVESTIGATIONS
Each of these instruments provides partial information on these activities. If these techniques are used properly, the evaluation committee will be able to combine the partial data to obtain an overview of the personnel management activities in the company.
The techniques used are:
- Interviews Opinion polls External information RR investigations International audits
Interviews
They are carried out with staff at all levels and provide extensive information. The comments derived from these interviews help the evaluation committee identify areas for improvement. Criticism by staff can highlight actions the department will need to take to meet both the needs of employees and the organization.
The exit interview is another useful source of information. The employee's comments are recorded at the time the separation occurs and the evaluation committee subsequently studies the document, to determine (if any) the causes of their dissatisfaction, as well as other problems that these interviews may reveal.
Because many employees are reluctant to exercise their right to criticism while connected to the organization, these interviews often produce invaluable information that could not be obtained in common circumstances. On the other hand, when the separation occurs in conflict circumstances, it is unquestionable that some strong negative feelings towards the company or certain people may detract from the information obtained.
Opinion poll
HR generally complements interviews with opinion polls, which are also called attitude polls. In this way, through carefully prepared questionnaires, a more accurate description of the real state of certain aspects in an organization can be obtained. Questionnaires are likely to lead to more honest and reliable responses than interviews.
Of particular importance are the trends that are revealed in the course of various surveys, administered periodically to different key areas.
Essential points in opinion polls
Analysis of HR records
On many occasions, relevant information can be obtained by analyzing personnel records. These analyzes are carried out to ensure that you are complying with the company's policies, as well as certain legal aspects. Among the records are:
- Safety and hygiene aspects Evaluation of employee complaints Evaluation of compensation Evaluation of programs and policies
Records commonly verified by HR function evaluation
| SECURITY AND HEALTH |
| · To determine the differences that the programs of the area have meant in the number of accidents, professional illnesses, etc. |
| EMPLOYEE COMPLAINTS |
| · Is it possible to determine the existence of guidelines, originated in clauses of the contracts or in the supervisors?
· Are there dark spots in contracts and / or agreements? |
| DETERMINATION OF THE COMPENSATION |
| · Do wages correspond to market levels?
· Do the staff understand the benefits policy? · Does the benefits package compete with those offered by other companies? |
| STUDY OF PROGRAMS AND POLICIES |
| · Does each personnel program achieve its goals?
· Do the different departments of the organization observe the current personnel policies? |
| SAVINGS AND EFFICIENCY LEVELS |
| · How have personnel programs influenced levels of savings and efficiency? |
| ROTATION AND ABSENCE RATE |
| · Are there guidelines in the phenomenon? Have levels been reduced thanks to the programs?
· What is the relationship between the company's levels of turnover and absenteeism and those of other organizations? |
| SCORES BEFORE AND AFTER TRAINING |
| · Have the training programs helped improve performance?
· Are training and performance closely related? |
| PROMOTIONAL ACHIEVEMENTS |
| · What percentage of vacancies is filled through internal promotion?
· How is the performance of the promoted people? · Does the potential promotion diagram indicate that resources are available? |
| STAFF PICK |
| · What is the source that has supplied the best candidates?
· Are recruitment and selection costs comparable to those of other companies? |
| EMPLOYEE RECORDS |
| · Are the files in order and complete?
· Do the records contain accurate and updated information, useful for decision-making? · Are the files verified periodically, to check the progress made by each employee? · Is the situation of problematic, unprofitable employees detected for special review? |
| SPECIAL STAFF PROGRAMS |
| · How many are they and what areas do they cover?
· Do they cover the needs? How are they administered? · Are they achieving the proposed goals? |
Experimentation of personnel techniques
Experimental research and experimentation with personnel techniques allows comparison between an experimental group and a control group under realistic conditions.
But this technique has some drawbacks: some managers may be reluctant to consider that the technique could affect those who have not been taken into account; or employees may feel manipulated. Finally, the experiment may not yield clear or reliable data, due to changes in the work environment or simply due to the daily contact and exchange of information that may occur between the two groups.
External information
Comparisons with other organizations and with the environment provide insights for evaluating company policies.
Within the sources of information we can resort to:
- reports from the Central Bank reports from Chambers of Commerce statistical packages from institutions such as the Inter-American Development Bank specialized information from certain government agencies and agencies
Among the indicators that we can review to obtain data are:
- information on future investments in the area employment opportunities at future staff turnover rates in the locality demographic projections of the labor force local statistics of wages and salaries severity and frequency of workplace accidents in the community
International audits
The audit of personnel policies carried out in other countries is made especially difficult by cultural, linguistic, legal and various other factors.
Expecting policies that work well in one country to apply to all others is often unrealistic. Furthermore, certain principles and practices cannot be modified without seriously violating the corporation's philosophy.
Corporations tend to require uniform practices across all operations to ensure compliance with their policies and to create a uniform corporate culture. On the other hand, factors such as local competition, the laws of the country and the idiosyncrasy of local personnel may require certain variations.
An adequate diagnosis of the local culture must then be carried out, in order to adapt the improvements effectively.
THE AUDIT REPORT
The audit report is an overview of personnel activities and includes both recommendations for achieving effective practices and formal recognition of practices that are achieving their objective. By acknowledging both the positive and negative aspects, the report becomes more balanced and easier to accept.
The report contains several parts that address:
- Line managers who perform HR functions: among their responsibilities are
- Interview trainee candidates Train your employees Evaluate performance Motivate your team Satisfy your personal needs
- HR managers with specific functions: the report detects deviations from current policies and / or legal provisions. ARH's insufficient or erroneous practices are noted in the report, along with recommendations for problem solving. The specialists in each area (training, compensation, selection, etc.) also receive feedback. HR General Manager: The report addressed to this one contains all the information given to the line managers and the HR managers. In addition, the HR manager receives feedback on:
- The attitudes between line managers and employees to the performance of the HR area. The objectives of the department and its plans to achieve them. Personnel problems and their implications. Recommendations regarding the necessary changes and the priority that should be given to each change.
Advantages of evaluation from the audit report
- It provides a comprehensive and comprehensive perspective of the condition of HR functions in the company. Identifying key problems allows focusing on those with the greatest potential to improve the contribution of HR to the company. It allows the establishment of a future strategy. It serves as a reference point for future evaluations.
THE HR DEPARTMENT WITH ACTIVE PHILOSOPHY
At ARH, a balance is needed between the company's objectives, social needs and those of the employees. To fully fulfill its function, HR must go beyond evaluating its functions. Assessments are necessary, but are oriented to the past. They only show the results of previous decisions. Although it is necessary to evaluate the previous performance, the departments. HR professionals must also look to the future.
Without a future orientation, HR becomes reactive to the circumstances, with which minor problems can become major difficulties. An active approach, however, is insufficient in itself. A systems orientation is also required. ARH specialists must consider the goals of the company and the needs of employees as part of the total system. When personnel managers do not adopt this perspective, they may not adequately use the human resources made available to them to achieve the organization's objectives. Another probable deviation is that they are devoted exclusively to the needs of the employees, excluding the objectives of the organization. The right balance is an active approach to HR,framed within a reference system.
Active philosophy refers to the concept of CUSTOMER SATISFACTION, that is, all those that have a direct relationship with the HR area. Thus, in order to provide a quality service, you must ensure that you have:
- A practical approach, that is, to adopt a future orientation, in order to anticipate problems before they arise. The ARH needs to be sensitive to new trends of all kinds. A human approach, that is, treat employees with dignity, being sensitive to changes in the rules of dignified treatment. A systematic approach, that is, keep in mind that HR takes place within a larger context; the organization and its environment. HR can only be evaluated regarding its contribution to the organization and due to the fact that organizations are open systems, HR needs to be linked with the external environment.
Thanks to the effective contribution made by HR professionals, organizations will become more productive and lead to higher living standards thanks to the overall increase in productivity.
SUMMARY
Through a comprehensive evaluation of HR activities in an organization, the way in which the personnel of an organization is managed is known.
The evaluation of HR activities includes HR specialists, line managers, employees, and the external environment. Elements from the 4 sources are analyzed because a special perspective is adopted in each of them.
Data is obtained through interviews, questionnaires, surveys, internal records, external sources, and experimentation methods. Through these instruments, the evaluation committee prepares a global report. This report provides feedback to general management, line managers, HR specialists, and the HR manager. With this information, the HR manager can develop plans to ensure that HR activities make an effective contribution to the organization. The HR manager needs a perspective on her past performance, through retrospective evaluations. At the same time, it requires a future orientation, to anticipate the challenges of its environment. An active conception of their work, finally,encourages staff to both their individual and company goals.
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