The Human Resource Audit as an Improvement Tool
Regardless of the type of company or the size of your HR department, the HR Audit is a simple, yet comprehensive tool to analyze and improve your effectiveness as a function. The audit is made up of four main steps:
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Define desired HR practices for your organization
Assess current practices against the criterion that you have established
Analyze the results
Establish improvement goals and take action

This simple four-step approach can be repeated as the annual planning and goal setting process occurs within your company. Progress can be measured against goals and a continuous improvement cycle naturally unfolds.
Purpose(s) of an Audit
The audit can serve any of the following purposes:
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To clarify desired practices of HR work and roles within the organization (HR
Department, Line Managers).
To establish a baseline for future improvement.
To evaluate current effectiveness.
To standardize practices across multiple sites within a division or company.
To assess current knowledge and skills required of HR practitioners.
To improve performance levels to key customers within the organization.

The Audit Process
Step One--Defining Audit Statements
Definition of desired HR practices can occur through in a variety of ways.
A good starting point is to take some time and reflect on the legal requirements and programs that the department must administer. Simply listing them is a good first step.
Next, consider your areas of responsibility and traditional HR practices covered by your function: They may include HR Planning, Staffing, Performance Management, Employee
Relations, Compensation and Benefits, Training and Development, Safety and Wellness,
Employee Surveys, and Communications. Finally, other areas to consider are company initiatives that the HR function may be required to support, i.e. internal