HR Audit (Part 3)

SELECTION

1. Does the HR department perform all initial screening of candidates?
2. Are candidate telephone interviews, teleconferencing or video screening conducted before personal interviews?
3. How many candidates are typically interviewed before filling a position and at what levels?
4. Who participates in the interview and at what intervals?

    How many people are typically involved in the interviewing process?

    Are panel interviews used?

    Who makes the final hiring decision?

1. Are hiring managers trained in objective selection (e.g., interviewing techniques, position-related questions and legal implications)?
2. Are reference checks conducted on all candidates?

    Who performs the reference checks?

1. Are tests or personality profiles used in the selection process?

    Are they professionally validated?

1. Are drug tests administered to all new employees as a condition for hire?
2. Does the organization compare the number of job openings and workforce projections with the HR department’s recruitment and selection capacity?

    Are peak and low hiring cycles identified?

1. Has the organization examined or evaluated any of the following alternatives to satisfying workforce requirements:

    Project or contract outsourcing?

    Temporary placement?

    Internal temporary placement pool?

    Part-time employment and job sharing?

1. Are all employment costs accounted for in the organization’s budget?
2. On a scale of one to seven (seven being the highest and four being adequate), how do you think the HR team would rate the effectiveness of the recruitment and selection process?
3. On the same one-to-seven scale, how do you think departments would rate the effectiveness of the recruitment and selection process?

Explanation of Recruitment and Selection Questionnaire
    The purpose of the Recruitment and Selection questions is to improve critical staffing needs in a timely manner and with quality candidates.

    Questions three through 12 examine how the company attracts job candidates. Question ten deals with finding candidates. Cost-benefit analyses of all hiring sources (questions 11 and 12) will tell you where to place your recruiting energies and financial resources.

    Questions on the selection process (13 to 20) may be more important to government agencies and contractors because of highly regulated selection criteria, affirmative action and diversity implications. Fiscal constraints and regional preferences may also restrict government staffing professionals to the most inexpensive sources, regardless of their results.

    What makes a successful manager is the ability to influence positive behavior and to hire the best talent. HR professional counseling, guidance and training on effective interviewing and selection are essential to help managers make the right hiring decisions. It is also essential that the selection criteria be equally and consistently applied to all applicants.

    Companies’ efforts to reduce both their workforce and their fixed labor costs have resulted in less costly ways to satisfy workforce requirements. These include outsourcing and temporary workers, which transfer costs on a variable basis. This is why Manpower, Inc. has become the largest employer in the U.S. today. If your organization uses these methods, be aware of possible long-term quality problems resulting from reduced commitment and lack of company pride.

Compensation Questionnaire
    A system of evaluating jobs and compensating employees to ensure that the organization attracts, retains and motivates employees to accomplish organizational objectives.

1. Does the organization have a policy clearly stating its position on employee compensation?

    Is this policy linked to the organization’s management philosophy on compensating employees, and does it reinforce the values of the organization?

    Is the organization’s compensation philosophy clearly communicated to all employees?

    Is it clearly supported and monitored by management?

1. Does the compensation policy contain procedures to guide managers on how to implement the compensation system?
2. Is there one position within the organization accountable for overseeing and coordinating all compensation-related activities (job evaluation, job classifications, job descriptions, salary administration, performance appraisal and compliance with all governmental pay regulations, including FSLA, ADA, compensable time and EEO regulations)?
3. Is there a process for keeping the organization aware of compensation paid for comparable job functions in the region?

    Compensation paid to comparable exempt job functions nationwide?

    Compensation paid to comparable exempt job functions industry-wide?

    How frequently are there market studies performed?

1. Is your pay plan in agreement with the compensation philosophy of the organization?

    Are pay ranges wide enough so as not to force vertical pay growth?

    Are pay ranges wide enough and procedures available to reward additional knowledge, skills, abilities and responsibilities and encourage lateral career growth?

    Do the intervals between ranges clearly define the differences in positions assigned to those pay ranges?

    Are pay differences great enough to ensure that a subordinate is not paid more than his or her supervisor, including overtime payments?

1. Are all jobs classified using a consistent job analysis?
2. Are all job classifications reviewed for gender and minority equity?

    Are all comparable jobs reviewed for possible evidence of uneven treatment for females or minorities?

1. Does your organization have an employee performance appraisal system?

    Does the performance appraisal establish clear objectives, expectations and performance measurement criteria linked to that specific job?

    Does the performance appraisal provide objective, interactive and meaningful feedback on performance?

    Do performance objectives clearly support departmental and organizational objectives?

    Are these objectives and measurement criteria discussed with the individual being appraised?

    Do the employees have clear and direct control over the outcome of their appraisals?

    Do performance appraisals reflect an employee’s positive behavior, as well as results?

    Do performance appraisals include a written plan to improve employees’ knowledge and skills?

    Are pay plans linked to rewards for measured performance?

    Is the performance rating/pay adjustment reviewed by someone in a position higher than that of the rater before discussion with the employee and implementation?

1. Does your organization have a pay-for-performance (merit-based) system?

    Does it work as intended, or is it a tool for compensation adjustment?

    Does an outstanding performance merit an outstanding reward?

1. Are compensation increases budgeted throughout the organization and are guidelines for distribution clearly communicated?

    Are ranges and limits clearly defined (e.g., pay increments linked to performance measures)?

    Is distribution of compensation among departments reviewed by management for consistency and equity before awarding increases?

1. Are other performance compensation awards (results sharing) appropriate and in place?

    Profit-sharing awards based on organization-wide profitability.

    Special recognition awards, e.g., bonuses for meeting a combination of results criteria, including department contribution performance, major productivity increases, sales and profit increases, and cost savings.

    Group or team productivity based on team performance and distributed by team members.

    Gain-sharing awards based on local performance.

    A special pay-for-knowledge system, e.g., payment for increased development of employee knowledge, skills, abilities and/or responsibility (allowing a broader job design without changing assignments).

1. Does your organization have the capacity for a compensation strategy to attract, retain and motivate employees?
2. Are compensation administration costs included in the budget?
3. On a scale of one to seven (seven being highest and four being adequate), how do you think the Human Resources department would rate the effectiveness of the compensation system?
4. On the same one-to-seven scale, how do you think your internal clients (other departments and employees) would rate the effectiveness of the compensation system?

Explanation of Compensation Questionnaire
    It is important for the organization to distribute a clear policy statement on its compensation philosophy to its employees. Guidelines are important to ensure consistency and equity in the reward systems. Compensation is probably the most objective aspect of HR management. You should be aware of this when scoring questions one through seven.

    Compensation methods can help motivate the fulfillment of organizational objectives. For this reason, compensation experts receive higher pay than other HR professionals. Major consulting firms specialize in this area because compensation affects the organization’s bottom line.

    If compensation alone drove performance, companies with big payrolls would always be the most profitable, but that isn’t the case. In fact, eliminating higher paid positions is the trend. Compensation programs should motivate and reward people for accomplishing organizational objectives.

    Companies need to find new ways to reward individual, team and other group performance. Reward systems should take into consideration self-directed work teams, cross-functional problem-solving teams, matrix management, taking on added work responsibilities and more risk taking. If the organization wants a closer correlation between compensation and quality work, then the recognition of team performance is critical. Questions eight through 11 deal with these incentive issues.