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Measuring HR Effectiveness A Toolkit. People In Aid Nov 2007
Measuring HR Effectiveness A Toolkit
What the Toolkit is for?The guiding principle in the People In Aid Code of Good Practice is that People are central to theachievement of the organisations mission. This Toolkit is designed to help managers evaluate theextent to which that is the case it enables an organisation to audit its HR and peoplemanagement systems, policies and practices, and identify priorities for action. It will work in mostcontexts, and has been designed specifically to be used in head office, regional office or local /field office environments.
It comprises a set of diagnostic questionnaires, guidelines and tips that enable organisationsinvolved in humanitarian relief and development programmes to measure and evaluate theeffectiveness of their HR / people management policies and practices, and address any gaps orshortcomings. In other words, its an HR audit.
The HR audit is built around six core categories of people management, namely:
Planning
Recruitment
Deployment
Management
Development
Transition
Why use the Toolkit?An HR audit enables an organisation to get an accurate and thorough picture of the effectivenessof its HR systems, policies and practices.Over time, audit data can be tracked and trends monitored. Where appropriate, benchmarking withpeers can help bring about performance improvements and facilitate organisational learning anddevelopment. The key benefits associated with this tool include:
Objective and systematic review of HR systems, policies and practices
Indicates levels of employee engagement
Highlights issues or gaps and identifies priorities for action
Encourages participation by managers on HR issues
Who would use it and when?
People In Aid encourages all organisations committed to good practice in the management andsupport of their staff and volunteers to measure the effectiveness of their HR systems, policies andpractices. Using this toolkit will help you gather the evidence you need to be awarded the firstPeople In Aid Quality Mark and it can also be used as part of the People In Aid Codeimplementation process. Further information on the Code implementation process can be found onour website www.peopleinaid.org/code
The toolkit can be used by individuals or teams, according to respective needs or drivers. Forexample:
an individual within the HR department might use it to provide a quick overview of theorganisations health
an HR team might use it to facilitate internal diagnosis, discussion and action planning
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the senior executive team might use it to assess how HR policies and practices impactindividual and organisational performance.
The toolkit can be used at any stage in an organisations life cycle; it is equally applicable to neworganisations in the start up phase and to mature well-established organisations.
How to use it
The real power behind the toolkit does not lie in the diagnostic instruments themselves, it is in thesubsequent discussion, prioritisation and action planning that results. The recommended approachis therefore as follows:
The HR audit can be carried out at 3 different levels (basic, full and enhanced), depending on thetime available, the particular needs of the organisation and the depth of insights that they wish toobtain.
Basic audit (Level 1)
The basic audit provides the organisation with an overview of HR effectiveness across the sixcategories and identifies the priority categories for attention.
Full audit (Level 2)
The full audit can either follow on from the basic audit (Level 1) and explore issues within prioritycategories in more detail, or it can be used in its own right as a stand-alone audit that provides agreater depth of insight. As before, priority areas for attention are highlighted.
Enhanced audit (Level 3)The enhanced audit is designed to be used in conjunction with the full audit and enables anorganisation to gain a deeper understanding of issues by identifying underlying causality in termsof capability, resource or infrastructure problems.
1. Conduct HRAudit using
Toolkit
2. Discussimplications /
findings andagree priorities
3. Create actionplans and engage
key stakeholders
4. Implementchanges andmonitor progressimpact ofchanges
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Basic Audit (Level 1)
This can be used on its own as a high level audit or can form a precursor to more detailed insightsthat can be obtained through moving to the full and enhanced audits.
Who Would Use It?HR Director / Manager, HR team or senior leadership team
When to Use It?
When a quick assessment is needed in order to assess the health of people practices at a highlevel
How to Use It?
The audit comprises two questionnaires / checklists:
The HR Policies, Processes and Practices Checklist (Appendix 1) provides insight into theextent to which key policies processes and practices exist, the level of understanding of themwithin the organisation and the extent to which they are up to date and fit for purpose.
The Basic HR Effectiveness Questionnaire(Appendix 2) comprises 6 statements that broadlyalign to the stages in the employee life cycle and provides an opportunity to rate the effectivenessof systems, policies and practices.
Step 1
The individual manager, or team, completes the HR Policies, Processes and Practices Checklist(Appendix 1) and the Basic HR Effectiveness Questionnaire (Appendix 2) by rating the extent to
which they agree with the statement (high level of agreement (H); moderate level of agreement(M); low level of agreement (L)). The more respondents that complete this process, the morerobust the data will be.
Step 2
Review the results from the completion of both the checklist and the questionnaire. If more thanone person is carrying out the diagnostic then collate results and compare similarities anddifferences in perceptions. A scoring sheet is provided in Appendix 3 to help summarise individualscores, if required.
Discuss the findings and:
Clarify why different perceptions exist
Review the gaps
Agree a collective rating
Undertake a risk assessment to determine the implications in terms of impact on servicedelivery i.e. which issues, if addressed, would have the greatest impact on theorganisations ability to recruit, retain and motivate staff and improve service delivery. Riskshould be categorised as high (H), medium (M) or low (L). The agreed risk assessmentshould be recorded on the questionnaire.
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Step 3
Determine the level of priority that should be attached to each statement. This can be doneby reviewing the perception and risk assessments and determining a priority rating foreach statement as follows: high priority (Red), medium priority (Amber), low priority(Green) and very low priority (Blue). The following table can be used to assist in this
categorisation:
Perception Risk Priority
High High Green
Medium High Amber
Low High Red
High Medium Green
Medium Medium Green
Low Medium Red
High Low Blue
Medium Low Green
Low Low Amber
Attention should be focussed firstly on those activities that fall into the red category andsecondly on those in the amber. It is also worth considering any activities that fall into theblue category in order to explore whether too much resource / focus is being given to theseactivities at the expense of others.
The results can be represented visually if desired by plotting a matrix on a flip chart asfollows:
H
M
L
L M H
Identify the top (no more than 5) issues to focus attention on. Develop and agree action plans, including how other key stakeholders will be engaged
Step 4
Implement changes and monitor progress a list of possible performance metrics is shownin Appendix 4.
In the course of carrying out the above exercise it is possible that specific business units, functions,locations and employee groups may be identified for particular attention or where the ratings wouldbe expected to differ from the norm, either because they are more strategically critical or becausethe perception of the impact on these groups might differ. Where this is the case the exercise
should be repeated for these specific groups.
Perception
Risk
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Outcomes
The above process will result in:
An understanding of how different members of the team view existing people managementpractices and the extent to which consensus exists
Where specific policies and procedures may be missing or where improvements incommunicating and implementing are required
Identification of priorities and where attention needs to be focussed
Insights into specific employee groups / locations / functions where attention may need tobe focussed
The formulation of action plans and a process for monitoring progress
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Full audit (Level 2)
The full audit can be used as a stand alone diagnostic tool or can follow on from the basic audit(Level 1) in order to gain greater insight into the priority areas for attention.
Who Would Use It?HR team or senior leadership team with the option to modify the approach in order to capturebroader stakeholder opinions.
When to Use It?
When a more detailed assessment is needed and more comprehensive insights into all or specificpeople practices are required.
How to Use It?
Step 1Complete the Full HR Effectiveness Questionnaire (Appendix 5). There are a set of 35 statementsgrouped into six categories. Respondents are required to provide perception (H,M,L) ratings andscore them as with the basic audit.
Step 2
As with the basic audit the distribution of responses from all respondents should be collated,discussed, differences in perception explored and a risk assessment carried out. A scoring sheet isprovided in Appendix 6 to help in the collation of responses, if required.
Step 3
Agree priorities, record on the diagnostic and develop action plans and how best to engage keystakeholders
Step 4
Implement changes and monitor progress
As before, the exercise can be repeated for specific employee groups, functions or locations
Outcomes
The above process will provide detailed insights into a wider range of people management
practices and as such will enable much more detailed prioritisation and action planning to takeplace.
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Enhanced audit (Level 3)
The enhanced audit enables managers to gain a deeper understanding of the issues that underpinthe high priority areas for attention
Who Would Use It?
HR team with an option to involve a broader range of stakeholder groups in the diagnosis
When to Use It?
When there is a need to understand the extent to which capability, resources and infrastructureissues are the limiting factors underlying priority areas for attention
How to Use It?
The enhanced audit focuses on the extent to which the HR function and Line Management havethe capability (skills, knowledge and expertise), resources (manpower, time money) andinfrastructure (information, processes, technology and support) to enable them to deliver.
Step 1Create a template comprising the statements that are the high priority (Red) areas for attention asidentified during the full audit (alternatively the exercise could be carried out on all 35 statements ifa more comprehensive analysis was required).
Example
Statement HR Function Line Management Risk PriorityCapability Resources Infra
structureCapability Resources Infra
structure
Planning
We have a clearlydefined, integratedpeople management
strategyOur people strategy isaligned to our mission,values and strategicobjectives
Our people strategyenables us to maximisethe return on ourinvestment in people.
Our people strategysupports a culture oflearning and continuousimprovement throughoutthe organisation
We provide people withgood careerdevelopmentopportunities
Step 2
Individuals rate perception on a H/M/L scale as before for each of the six areas: HR and linecapability, resources and infrastructure. Consolidate and review and discuss the distribution ofresponses. Undertake a risk assessment as before.
Step 3
Agree priorities and action plans and how best to engage key stakeholders
Step 4
Implement changes and monitor progress
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Appendix 1
HR Policies, Processes and Practices Checklist
Policy / Process / Practice
Responses: Yes / No / Dont Know
Does thisexist?
Is it / arethey up to
date?
Is it / are theyclearly
communicated?
Is it / arethey
consistentlyapplied?
Planning
Organisation charts which reflect thecurrent organisation
Contracts of different types andlengths which reflect the requirementsof the organisation
Terms and conditions of employment,including non cash and cash benefitsin local currencies
Policy governing annual,compassionate and home leaveentitlements
Policy covering working hours, thelength of the working week andstandards governing the workingenvironment
Policy covering living / accommodationarrangements including adequateprivacy provisions
Insurance arrangements
Rest and Recuperation policy
Expected standards of behaviour andcode of conduct
Understanding of labour laws in thecountries in which the organisationoperates
Recruitment
Job descriptions
Person specifications
Diversity and Equality policy
Application forms and selection / shortlisting processes
Testing and interviewing tools andprocedures
Procedures for obtaining references,conducting health checks and carryingout criminal records checks
Deployment
Travel arrangements inc vaccinations,visas, insurance, work permits etc
Induction programmeTraining needs analysis for newstarters
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Policy / Process / Practice
Responses: Yes / No / Dont Know
Does thisexist?
Is it / arethey up to
date?
Is it / are theyclearly
communicated?
Is it / arethey
consistentlyapplied?
Probationary period and review
Mentoring / support for new starters
Management
Grievance, disciplinary and whistleblowing procedures
Performance management / appraisalprocess
Periodic salary reviews andbenchmarking against relevant localorganisations
Health and Safety policy includingsecurity, stress and individual
counselling supportConfidential and secure personalrecords
Development
Training needs analysis for all staff
Availability of range of differentlearning methodologies including selfhelp, training courses, mentoring,shadowing etc
Articulated career paths and periodiccareer development discussions
Methodologies /approaches forcommunicating and managing change
Transition
Policies for handling resignation,redeployment and redundancy
Evacuation / suspension of operationsprocedures
Dismissal procedure
Exit procedures including exitinterviews, hand over, references,
health checks, ongoing support,payments
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Appendix 2
Basic Audit - Level 1HR Effectiveness Questionnaire
Category Perception(H, M, L) Risk(H.M,L) Priority(R,A,G,B)
Planning
We have a clearly defined, integrated people managementstrategy, aligned to our mission, values and strategicobjectives, which enables us to maximise the return onour investment in people and which supports a culture oflearning and continuous improvement throughout theorganisation.
Recruitment
We are able to attract and select a diverse workforce withthe skills and capabilities we need to meet our current and
future needsDeployment
We rapidly assimilate new starters into the organisation inorder to make them feel part of the family, help themunderstand how the organisation, and the sector works,clarify organisational values and cultural norms, andidentify and provide on-going support during theirprobationary period
Management
We manage our people in a way that energises andmotivates them to perform to the best of their ability andprovide rewards and recognition that are fair and equitable
and where appropriate, reflective of individual contribution.Development
We actively help our people to realise their full potentialthrough by enabling appropriate training and learninginterventions and through the provision of careerdevelopment opportunities
Transition
We manage the exit of people from the organisation in ahumane and sensitive manner that reinforces ourreputation as a good employer and which enables us tolearn how best to adapt existing people managementpractices.
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Appendix 3 Basic Audit - Level 1
HR Effectiveness Questionnaire Scoring Sheet
IndividualPerceptions
OverallPerception
IndividualRisk
Assessments
OverallRisk
PriorityCategory
H M L H M L
Planning
We have a clearly defined, integrated peoplemanagement strategy, aligned to our mission,values and strategic objectives, which enables usto maximise the return on our investment inpeople and which supports a culture of learningand continuous improvement throughout theorganisation.
Recruitment
We are able to attract and select a diverseworkforce with the skills and capabilities we need
to meet our current and future needs
Deployment
We rapidly assimilate new starters into theorganisation in order to make them feel part of thefamily, help them understand how theorganisation, and the sector works, clarifyorganisational values and cultural norms, andidentify and provide on-going support during theirprobationary period
Management
We manage our people in a way that energisesand motivates them to perform to the best of theirability and provide rewards and recognition thatare fair and equitable and where appropriate,
reflective of individual contribution.Development
We actively help our people to realise their fullpotential through by enabling appropriate trainingand learning interventions and through theprovision of career development opportunities
Transition
We manage the exit of people from theorganisation in a humane and sensitive mannerthat reinforces our reputation as a good employerand which enables us to learn how best to adaptexisting people management practices.
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Appendix 4
People Metrics
Category Measure
Planning Segmentation of workforce and the extent to which HR practices are tailored to suitdifferent needs
Key people measures regarding recruitment, retention and motivation analysed bykey talent group
% of senior leadership time devoted to people issues and reviewing people metrics
% of senior management time spent in identifying key talent and in planningappropriate deployment and development
Retention rates overall and for key employee groups
Engagement scores - overall and for key employee groups
Recruitment Reputation as an employer from external surveys
Elapsed time to fill vacancies
Number of failed recruitments (& reasons)% offers accepted
% candidates retained after 1 year
Diversity mix of applicants
Induction % new starters receiving full induction within specified timescale
% new starters receiving mentoring and coaching
Perception of new starters after first 3 months
% of new starters whose training and development needs have been met withinspecified timescale
Deployment Accuracy and relevance of person specifications
% of employees who feel that their role plays to their strengths
% of employees who feel that they are trusted to use their judgement
% of employees who feel that their role is stretching and challenging
Capture and sharing of information regarding individual strengths across theorganisation
Management % of employees who trust and respect their manager
% of employees who have had motivational performance review discussions withtheir manager
% of employees who are clear about what is expected of them
% of employees who receive prompt recognition and praise
% of employees who receive regular constructive feedback
% of employees who believe they are treated fairly
Level of investment in employee welfare and heath and safety
Number of flexible working and work / life balance initiatives
% of employees fully engaged within team
Development Level of training and development investment
% of employees who have individual training and development plans
% of employees who have had a meaningful career planning discussion with theirmanager
% of employees who feel that their manager understands their aspirations andneeds
Transition % of leavers who feel that they have been well treated
Level of time spent analysing and taking action on exit interview dataNumber of referrals generated by former employees
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Appendix 5
Full Audit - Level 2HR Effectiveness Questionnaire
Statement Perception(H,M,L)
Risk(H,M,L)
Priority(R,A,G,B)
Planning
We have a clearly defined, integrated people management strategy
Our people strategy is aligned to our mission, values and strategic objectives
Our people strategy enables us to maximise the return on our investment inpeople.
Our people strategy supports a culture of learning and continuousimprovement throughout the organisation
We know where the key talent which is critical to our success is and how bestto retain and motivate them
Recruitment
We have a strong employer brand that attracts high quality applicants
Our recruitment & selection processes enable us to respond rapidly whenvacancies arise
Person specifications for jobs define the correct levels of skills, competenciesand experience required
Our recruitment & selection processes effectively sift candidates and enable usto select the best person for the job
Our recruitment & selection processes enables us to attract a diverse range ofcandidates
Our employment offer is attractive and enables us to recruit the calibre ofpeople we require
Deployment
New starters are provided with a comprehensive induction programme
The individual needs of new starters are rapidly assessed and addressed
Our induction programme enables new starters to rapidly assimilate into theorganisation and become part of the family
New starters are provided with coaching and mentoring support during theirprobationary period
New starters are provided with the equipment, information and guidancenecessary to prepare them for their role
Management
We provide individuals with roles that are stretching and challenging
We delegate authority appropriately and trust individuals to use theirjudgement
Our managers build individual capability and confidence and enable others tobe successful
Managers are good at identifying what motivates individuals and in bringing thebest out of them
Individuals have a clear understanding of what they need to do and whatconstitutes success in their role
Individuals receive regular constructive feedback which helps them to improvetheir performance
Our managers provide prompt praise and recognition where it is merited
Our treatment of people is fair, equitable and even handed
We take employee health, welfare and safety seriously and strive to helpindividuals achieve a meaningful work / life balance
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Statement Perception(H,M,L)
Risk
(H,M,L)
Priority
(R,A,G,B)
We have a comprehensive understanding about how people feel aboutworking for us and take prompt action to address issues
Development
We have a comprehensive understanding of individual training anddevelopment needs
Individual training and development needs are promptly and appropriatelyaddressed
We provide people with the scope to grow and fulfil their potential
People are clear about how they can progress their career within theorganisation
We provide people with good career development opportunities
Transition
We manage the exit of people from the organisation in a humane and sensitivemanner
We adapt our people management policies and practices based on insightsprovided by those that have left
We help build peoples capabilities for their future careers
People invariably speak well of this organisation after they have left
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Appendix 6 Full Audit - Level 2HR Effectiveness Questionnaire Scoring Sheet
IndividualPerceptions
IndividualRisk Assessments
Statement
H M L
OverallPerception
H M L
OverallRisk
Priority(R,A,G,B)
Planning
We have a clearly defined,integrated peoplemanagement strategy
Our people strategy is alignedto our mission, values andstrategic objectives
Our people strategy enablesus to maximise the return onour investment in people.
Our people strategy supportsa culture of learning andcontinuous improvementthroughout the organisation
We know where the key talentwhich is critical to our successis and how best to retain andmotivate them
Recruitment
We have a strong employerbrand that attracts high qualityapplicants
Our recruitment & selectionprocesses enable us torespond rapidly whenvacancies arise
Person specifications for jobsdefine the correct levels ofskills, competencies andexperience required
Our recruitment & selectionprocesses effectively siftcandidates and enable us toselect the best person for the
job
Our recruitment & selectionprocesses enables us toattract a diverse range ofcandidates
Our employment offer isattractive and enables us to
recruit the calibre of peoplewe require
Deployment
New starters are provided witha comprehensive inductionprogramme
The individual needs of newstarters are rapidly assessedand addressed
Our induction programmeenables new starters torapidly assimilate into theorganisation and become partof the family
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IndividualPerceptions
IndividualRisk Assessments
Statement
H M L
OverallPerception
H M L
OverallRisk
Priority(R,A,G,B)
New starters are provided withcoaching and mentoringsupport during theirprobationary period
New starters are provided withthe equipment, informationand guidance necessary toprepare them for their role
Management
We provide individuals withroles that are stretching andchallenging
We delegate authorityappropriately and trustindividuals to use their
judgement
Our managers build individual
capability and confidence andenable others to be successful
Managers are good atidentifying what motivatesindividuals and in bringing thebest out of them
Individuals have a clearunderstanding of what theyneed to do and whatconstitutes success in theirrole
Individuals receive regularconstructive feedback whichhelps them to improve theirperformance
Our managers provide promptpraise and recognition whereit is merited
Our treatment of people is fair,equitable and even handed
We take employee health,welfare and safety seriouslyand strive to help individualsachieve a meaningful work /life balance
We have a comprehensiveunderstanding about howpeople feel about working forus and take prompt action to
address issues
Development
We have a comprehensiveunderstanding of individualtraining and developmentneeds
Individual training anddevelopment needs arepromptly and appropriatelyaddressed
We provide people with thescope to grow and fulfil theirpotential
People are clear about howthey can progress their careerwithin the organisation
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IndividualPerceptions
IndividualRisk Assessments
Statement
H M L
OverallPerception
H M L
OverallRisk
Priority(R,A,G,B)
We provide people with goodcareer developmentopportunities
Transition
We manage the exit of peoplefrom the organisation in ahumane and sensitive manner
We adapt our peoplemanagement policies andpractices based on insightsprovided by those that haveleft
We help build peoplescapabilities for their futurecareers
People invariably speak wellof this organisation after they
have left