5 Smart HR Audit Keys to Unlock Premium Value

Internal HR Audit Series: Part 2 of 2Last week I introduced the importance of carrying out your own internal HR audit.That post ended with a handy 19.5 point ‘Risk Mitigation Audit’ checklist to help you renovate your HR, tackle the most challenging fixer-upper employee files and remove the Gremlins from your HR filing cabinets.Using this checklist will help to remove some of the worry and fear of a visit from an External Auditor.For a quick recap about how to take action to correct and eliminate risks in your employee files, pop back to last week's post here.Come right back, because this week’s post is all about value creation.In this post, I will show you how to use your internal HR audit to unlock remarkable relevance and get recognised for results.The Society for Human Resource Managers (SHRM) says this.Value Creation Audits “look more broadly at how HR's activities correlate with business priorities and how these activities might be performed more effectively and efficiently.”This type of audit focuses on where and how HR can add value and make a positive difference to the business and the employee community it serves.Sounds great right?Do you want in?Good stuff! Let’s get started.

Mind-Shift to Value Creation

A Light bulb moment.Doing your own HR Value Creation Audit is an opportunity to examine, ask questions, listen, learn and respond to the needs of your business and employees.An internal audit is your chance to identify the real the priorities, pain-points and aspirations of your employee community and organisation.Data gathered from the audit will provide you with reliable intelligence which you can use to target relevant response to those needs.The result?Meaningful and resolute action on real priorities = Value Nirvana.Here’s where you can make a start…

Your Smart HR Audit Keys to Unlock Value

Payroll: Most audits (external) centre on assessing payroll. It is an obvious zone on which to pay close attention as payroll is typically the single largest business expense.Of course, it is critical to ensure that all your systems and processes are in top order. We know that exposure to financial risk is no laughing matter.But we must not dilly dally here on the common place. There are golden nuggets of value to be found elsewhere.Let’s press on.We are guided on our quest to unlock HR Value Creation by the wise words of Peter F. Druckerat each of the 5 key stages - starting with Purpose.Now I must tell you that embarking on a HR Value Creation Audit is not for everyone. In fact, doing this type of audit should come with a warning.Once you start asking the hard questions, going beyond your usual activities; you will create more work. And that sucks!But this is not work.Although it may feel like pure drudgery; it is your opportunity to make HR shine and add meaning to your activities.Are you still with me? Good!Collect your 5 smart value creation audit keys below.

1. Purpose

“Strategy is a commodity, execution is an art.”

Your organisation’s purpose offers mega opportunities for HR to create value.The purpose is the story of who you (the organisation) are, where you are going and why.The story is made even richer if the plot is thickened with a humongous audacious goal.And now here comes the best bit.HR takes the lead by writing the employees’ roles in this story.Here's how.a) By preparing the HR strategic plan which details the way in which the organisation can achieve its purpose (build capacity and capability) with the skills and talents of its employees.b) By developing organisation structures and roles that will support the achievement of business goals.c) By designing job descriptions that tell each employee about their role and unique value in creating the business’ future and fulfilling the purpose.d) Implementing and executing (a) and (b).

2. Processes

“There is nothing quite so useless as doing with great efficiency something that should not be done at all.”

It pains me to admit it.HR has a terrible reputation for its infamous processes that often frustrate more than facilitate the flow of business or human connection.Today, we place a premium value on products and services that remove friction from our lives.With this in mind, review all HR-led processes and test for friction.Here are some examples of pointed questions you can use to start friction testing in these 3 key HR areas.Recruitmenta) Is the time, from receipt of the employee requisition to HR publishing the recruitment advertisement, working for the business and the hiring manager?b) Is your recruitment process all about the organisation’s needs and convenience or about creating an amazing candidate experience?Learning and developmentHow easy is it for employees to access and receive learning and the professional development support they need?

Performance managementAre all the forms and documents in use for disciplinary matters or performance appraisals simple to understand, easy to use, evaluating behaviours and results important to the business?

“while almost every large organization has an appraisal procedure, few of them actually use it.”

3. Policies and Procedures

“Doing the right thing is more important than doing the thing right.”

Have I told you the one about the department manager who wanted to issue a written warning to a direct report for failing to comply with the absence reporting policy and procedure?

SCENARIO SUMMARY: A department manager requests a meeting with the HR Manager. He wants to issue a written warning to a direct report for failure to follow company procedure in reporting their absence from work.

The Absence Reporting SOP states that an employee must first try to reach their manager via the manager’s company issued mobile phone. If unsuccessful, they are to call the main switchboard so the call may be transferred to the manager or to leave a message stating they are unable to report to work.

DEPARTMENT MANAGER REPORTS: The employee did try to contact the manager via the company-issued mobile phone. This is evidenced by the 3 missed calls. However, the employee failed to follow Company procedure. They did not call the switchboard but instead sent a ‘Whatsapp’ message to their manager to report that they are sick and not able to report for work.

The manager was busy and did not check his phone or messages until 2 hours after the employee was due to start work. It was too late to make arrangements to cover the employee’s work.

Here’s where HR can 'do the right thing'.

HR VALUE RESPONSE: Thank you for bringing this outdated Standard Operating Procedures (SOPs) to our attention. This policy urgently needs updating to include reporting absence via instant messaging. HR will amend and reissue within 24 hours.

It’s time we take the burden of capturing employee calls and messages away from the main switchboard – especially now that all Department Managers have a company-issued smart phone. Be sure to check your phone regularly for messages from your team.We thank that employee for highlighting this outdated policy to us. A warning letter is not appropriate in this instance.

MORE ~~WORK~~ VALUE: Review that restrictive Social Media policy and procedure. Build in flexibility to guide the use of Social Media to support the flow of the operation.

BE A HR RULE BREAKER on a Seek and Destroy Mission.To inject value in your HR, I am 100% encouraging you to actively seek out and break – actually make that smash – all rules, policies and standard operating procedures that,

Are obsolete.
Are an insult to common sense.
Don’t contribute to the fulfillment of the organisation’s purpose
Discourages desired values and behaviours.
Suck the humanness, creativity, independent thinking out of the organisation.
Make HR look like a Dodo!

4. Communication

“Mutual understanding can never be attained by “communications down,” can never be created by talking. It can result only from “communications up.”

Your organisation is busy telling its story. And you are telling your organisation’s story – in recruitment, in training, internal communications.

But are you communicating or are you broadcasting information?

Chris Rodgers points out a critical distinction and potential pitfalls in his post, 'Ducker on Communications in Organizations'. “Communication and information are different and largely opposite - yet interdependent.”

In an organisation in which employees’ voices are not heard, employees quickly find ears that will listen elsewhere. Glassdoor? A competitor?

HR’s chance to make a meaningful contribution lies in removing obstacles to communication flow, fostering a culture of transparent communication and implementing the tools to capture and action vital feedback.

5. Action Plan

“What gets measured gets improved.”

The results of a rigorous HR Value Creation audit are pure gold.Following through on the recommendations on the action plan is the foundation for continuous improvement.Continuous improvement in areas that matter is a sure step in the direction of relevance and HR value.Over to you savvy HR. Go Create the HR value you want and the kind your business needs.Use these 5 Smart Keys to unlock opportunities where you can add real value.