Auditing Your Company's 'Human' Resource

As an auditor, it is your responsibility to analyze the effectiveness of your resources. But most auditors overlook a company's most important, and often most costly resource, its employees. An auditor is particularly qualified to monitor the existing workforce and to develop a system through which an employer can hire those employees who will work most productively within the company's work environment.


Before designing an effective hiring system, you must evaluate the current workforce and work environment. You can complete this evaluation by conducting a series of audit-interviews with selected members of management. The preliminary audit-interview accomplishes two goals: it defines the company's "work philosophy" and allows you to formulate a description or "wanted poster" of the type of employee who will work most productively within that company.

Work Philosophy Defined

The "work philosophy" is a policy statement regarding the company's commitment to maintaining a cooperative employee relations atmosphere and, where appropriate, the advantages of operating without interference from organized or outside representatives. All levels of management, particularly top management, must be fully committed to the principles outlined the "work philosophy" if it is to provide a strong base upon which to build an effective hiring system. For that reason, the philosophy must be an amalgamation of top management's views, as ascertained through the initial audit process, of the type of employee relations environment which is appropriate for that company.


The initial audit process can also be used to develop a profile or "wanted poster" of the ideal employee. The employee profile defines specific behavioral attributes and values. An employee profile should not be an outline of personality characteristics, but rather an assessment of a prospective employee's propensities and past work experience.

You can design a profile for your company or client by evaluating the existing workforce. Supervisors and members of management should be asked to describe those employees who are "successful" company employees and those who are unsatisfactory. You should caution those individuals interviewed to avoid describing employees' personality traits. What is more important is how the successful employee and the unsatisfactory employee view the work they do, the people they report to, the company's policies and procedures and the employees with whom they work. For instance, the initial audit could determine the amount of independence which is suitable for an employee of that company. It could also determine whether the work requires employees who think for themselves and can adapt their work habits to specific situations, or employees who are satisfied performing tedious and repetitive work.

As an alternative to audit-interviews, you can gather this preliminary information by conducting an opinion survey. An opinion survey will allow supervisors to express their unbiased views regarding the existing workforce and has the added benefit of eliciting the supervisors' opinions and attitudes about their work environment in general.

Wanted Posters

Once you have gathered a sampling of "wanted posters" from management and supervisory personnel, you can begin to distill their descriptions into a list of desirable and undesirable characteristics. These profile characteristics form the backbone of an effective hiring system.

The profile should list and define both positive attributes and negative attributes; in other words, those characteristics an interviewer should look for in a prospective employee and those characteristics an interviewer should seek to avoid. By developing a profile of this nature, you can provide your company or client with an objective method of determining whether an applicant will work well within the company's work environment to achieve the company's goals and objectives.


Once positive and negative characteristics are defined, you should help your company or client develop a set of interview questions designed to elicit the various profile attributes. You should phrase interview questions in a way which encourages the applicant to respond with more than a "yes" or "no" answer. Each question should be accompanied by suggested answers and an explanation of the positive or negative attributes which the suggested answer indicates.

Questions and sample answers of this nature provide an interviewer with a consistent, objective system for evaluating prospective employees. The hiring system can be made even more objective if you develop a tally sheet which summarizes and evaluates an applicant's responses to the interview questions. A tally sheet assigns a point value to each attribute indicated by the applicant's answer to each interview question. The total number of points the applicant receives determines whether the applicant should be considered for employment.

A Second Benefit

Aside from the benefits of assessing an applicant's suitability for the company's work environment, a hiring system of this nature can help protect an employer from charges of discriminatory refusal to hire. An interview system developed through this process can assure that no unlawful questions are asked. In addition, if challenged, the company can produce a standard set of interview questions and the applicant's tally sheet to rebut any allegation that a decision not to hire a particular individual was based on a discriminatory motive.


The auditor's job does not end when the hiring system is completed. You should also develop a system of general labor relations audits which help the company assess the effectiveness of the hiring system and which allows the company to monitor its employee relations climate. Labor relations audits can fulfill a number of employee relations functions, including

  • Minimizing overall labor relations "risks" by minimizing exposure to liability under state and federal anti-discrimination laws and under theories of wrongful discharge
  • Align employees' expectations with the company's organizational philosophy and economic reality
  • Promote and maintain employee morale, effectiveness, satisfaction and loyalty to the company
  • Monitor personnel procedures and policies
  • Maintain a competitive compensation package


You can develop a series of audit forms to be completed by supervisors or other management personnel on a regular basis to monitor various elements of the company's working environment which effect its labor relations climate. Various types of labor relations audits you can develop to accomplish these goals include:

  • Employee Audit -- monitors each employee's loyalty to and attitude toward the company.
  • Vulnerability Audit -- assesses a particular employee group's receptivity to a union organizing attempt.
  • Daily Human Resource Audit -- completed by the individual responsible for handling human resource matters. This audit reviews on a daily basis absenteeism, discipline and other factors which would indicate the company is vulnerable to a union organizing attempt.
  • Weekly Human Resource Audit -- reviews turnover rates, absenteeism, tardiness, lay-offs, disciplinary action, voluntary terminations, forms of communications used, injury rates and any other factor which could affect the overall human resource climate of the company.
  • Monthly/Quarterly Human Resources Audit -- includes an analysis of wage and benefit comparisons, union organizing activity in the company's geographic area, a review of hiring procedures, orientation procedures, methods of communicating the availability of and tilting job openings, training, discipline, resignations, awards, communication programs, points of employee dissatisfaction, and other factors affecting the company's work environment.

A combination of labor relations audits used in conjunction with a hiring system can help a company to pinpoint trouble areas while developing and maintaining a workforce which will maximize the company's productivity and minimize its vulnerability to outside interference.

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