ASummer Internship Project ReportonHR Audit at Aditya Birla PantaloonsByPritiUniversity Roll No. 27300912004Submitted in partial fulfilment of the requirements of theSummer Internship ProgrammeUnder Guidance ofMs Lisa ChakrabortyManager (HR)Pantaloons Fashion and Retail Ltd&Dr. Bijay BhujabalNSHM Business School Durgapur

2013Declaration I hereby declare that this project report titled HR Audit at Pantaloons - is the result of my work at Pantaloons Fashion and Retail Ltd., Kankurgachi, Kolkata as part of my Summer Internship Programme. To the best of my knowledge and belief, this report is original, except for the referenced material, and has not been submitted to any educational institution for the award of any degree or diploma.

Priti

AcknowledgmentExpression of giving thanks are just a part of those feeling which are too large for words, but shall remain as memories of wonderful people with whom we have got the pleasure of working during the completion of project.The completion of any project brings with it a sense of satisfaction, but it is never complete without thanking those people who made it possible and whose constant support has crowned my efforts with success. One cannot even imagine the power of the force that guides us all and neither can we succeed without acknowledging it.The organization which not only traines a lot of Management Professionals but also helps to understand the working environment of company. I am thankful to Pantaloons Fashion and Retail Ltd, Kankurgachi Kolkata which helped me to do so.I have this great opportunity to express my deep sense of gratitude and whole hearted thanks to Miss. Lisa Chakraborty (HR), for her invaluable guidance, inspiration & encouragement. It is because of her that I could synchronize my efforts.I have the pleasure to express my deep sense of respect and whole hearted thanks to Dr. Bijay Bhujabal, Principal (NSHM Business School Durgapur) for his constant guidance, inspiration & encouragement. It is because of him that provided the path towards the completion of the project.I shall be failing in my duties until & unless I express my sincere thanks to all the Staff members, both Operational & Back office, all my friends whos suggestions and support helped me either directly or indirectly to achieve success in my endeavour.Priti

CONTENTS

Declaration CertificatesAcknowledgement Chapter I Introduction

Chapter II Retailing in IndiaThe evolution of retail in India Challenges to retail development in India Chapter III Study objective Methodology of the Study Chapter IVAditya Birla Group-A Company Profile Aditya Birla Retail Aditya Birla NUVO

Chapter V Pantaloons Fashion and Retail Ltd- A Company Profile Private Brands Levels of Pantaloons Fashion and Retail Ltd. SWOT Analysis of Pantaloons Fashion and Retail Ltd.

Chapter VI Human Resource Management Systems at Pantaloons Fashion and Retail Ltd Importance of HRMS HRMS maintained in Pantaloons Creation of HRMS login

Chapter VII HR Audit Approaches to HR Audit Scope of HR Audit Benefits of HR Audit HR auditing done at Pantaloons

Chapter VIII Conclusion Bibliography

Chapter 1Introduction

Chapter IIntroduction

Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products. In the US alone there are over 1,100,000 retailers according to the 2002 US Census of Retail Trade. [endnoteRef:1] [1: B /nl;kjm]

In the majority of retail situations, the organization from which a consumer makes purchases is a reseller of products obtained from others and not the product manufacturer. But as we discussed in theDistribution Decisionstutorial, some manufacturers also operate their own retail outlets in a corporate channel arrangement. While consumers are the retailers buyers, a consumer does not always buy from retailers. For instance, when a consumer purchases from another consumer (e.g., eBay) the consumer purchase would not be classified as a retail purchase. This distinction can get confusing but in the US and other countries the dividing line is whether the one selling to consumers is classified as a business (e.g., legal and tax purposes) or is selling as a hobby without a legal business standing.As a reseller, retailers offer many benefits to suppliers and customers as we discussed in the Distribution Decisionstutorial. For consumers the most important benefits relate to the ability to purchase small quantities of a wide assortment of products at prices that are considered reasonably affordable. For suppliers the most important benefits relate to offering opportunities to reach their target market, build product demand through retail promotions, and provide consumer feedback to the product marketer.

Chapter II

Retailing in India

Chapter IIRetailing in India

Retailing in Indiais one of the pillars of its economy and accounts for 14 to 15 percent of its GDP.TheIndianretailmarket is estimated to be US$450billionand one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people.As of 2013, India's retailing industry was essentially owner manned small shops. In 2010, larger formatconvenience storesand supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centers. India's retail andlogisticsindustry employs about 40 million Indians (3.3% of Indian population).Until 2011, Indian central government deniedforeign direct investment(FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process.In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such asWal-Mart,CarrefourandTesco, as well single brand majors such as IKEA,Nike, andApple.The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus.In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores.In June 2012,IKEAannounced it had applied for permission to invest $1.9 billion in India and set up 25 retail stores.An analyst fromFitch Group stated that the 30 percent requirement was likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan from opening stores and creating associated jobs in India.On 14 September 2012, the government of India announced the opening of FDI in multi-brand retail, subject to approvals by individual states. This decision was welcomed by economists and the markets, but caused protests and an upheaval in India's central government's political coalition structure. On 20 September 2012, the Government of India formally notified the FDI reforms for single and multi brand retail, thereby making it effective under Indian law.On 7 December 2012, the Federal Government of India allowed 51% FDI in multi-brand retail in India. The government managed to get the approval of multi-brand retail in the parliament despite heavy uproar from the opposition. Some states will allow foreign supermarkets likeWal-Mart,Tesco andCarrefourto open while other states will not.

The Evolution of Retail in IndiaWhile barter is considered to be the oldest form of retail trade, retail in India has evolved to support the unique needs of our country given its size and complexity. Haats, Mandis and Melas have always been a part of the Indian landscape. They still continue to be present in most parts of the country and form an essential part of life and trade in various areas.

The PDS or the Public Distribution System would easily emerge as the single largest retail chain existing in the country. The evolution of the public distribution of grains in India has its origin in the rationing system introduced by the British during the World War II. The system was started in 1939 in Bombay and subsequently extended to other cities and towns. By the year 1946, as many as 771 cities/towns were covered. The system was abolished post war on attaining Independence, India was forced to reintroduce it in 1950 in the face of renewed inflationary pressures in the economy.

A detailed discussion forms a part tracing the evolution of Indian retail would be incomplete without a mention of the canteen Stores Department and the Post Offices in India. The Khadi & Village Industries (KVIC) was also set up post-independence. Today, there are more than 7,050 KVIC stores across the country. The co-operative movement was again championed by the government, which set up Kendriya Bhandars in 1963. In Maharashtra, Bombay bazaar, which runs stores under the Sahakari Bhandar and Apna Bazaars run a large chain of co-operative stores.

In the past decade, the Indian marketplace has transformed dramatically. However, from the 1950s to the 80s investments in various industries was limited due to the low purchasing power in the hands of the consumer and the governments policies favoring the small scale sector. Initial steps towards liberalization were taken in the period of 1985-90. It was at this time that many restrictions on private companies were lifted, and in the 1990s, the Indian economy slowly progressed from being state led to becoming market friendly.

While independent retail stores like Akbarallys, Viveks and Nallis have existed in India for a long time, the first attempts at organized retailing were noticed in the textiles sector. One of the pioneers in this field was Raymonds, which set up stores to retail fabric. It also developed dealer network to retail its fabric. These dealers sold a mix of fabrics of various textile companies. The Raymonds distribution network today comprises of 20,000 retailers and over 429 showrooms across the country.

Other textile manufacturers who also set up their own retail chains were Reliance which set up Vimal showrooms and garden Silk Mills with Garden Vareli. It was but natural that with the growth of textile retail, readymade branded apparel could not be far behind and the next wave of organized retail in India saw the likes of Madura garments, Arvind Mills etc set up showrooms for branded mens wear. With the success of the branded mens wear store, the new age departmental store arrived in India in the early nineties.Traditional formats1. Itinerant salesman2.Haats3. Moles4. Mandis, etc.Established formats1. Kirana2. Convenience / Department stores3. Company / Multi brand showrooms4. PDS / Fair Price shops5. Co-operative stores6. Pan / beedi shops Emerging formats1. Exclusive retail outlets2. Hypermarkets3. Internal retail4. Malls / Specialty malls5. Multiplexes6. Rural oriented formats7. Fast food outlets8. Service galleries etc.This was in a sense, the beginning of a new era for retail in India. The fact that post liberalization, the economy had opened up and a new large middle class with spending power had emerged, helped shape this sector. The vast middle class market demanded value for money products. The emergence of the modern Indian housewife, who managed her home and work led to a demand for more products, a better shopping ambience, more convenience and one stop shopping. This has fuelled the growth of departmental stores, supermarkets and other specialty stores. The concept of retail as entertainment came to India with the advent of malls. The development of malls is now visible not only in the major metros but also in other parts of the country.

Challenges to Retail Development in India Organized retail in India is little over a decade old. It is largely an urban phenomenon and the pace of growth is still slow. Some of the reasons for this slow growth are

1. Retail not being recognized as an industry in India Lack of recognition as an industry hampers the availability of finance to the existing and new players. This effects growth and expansions plans.2. The high costs of real estateReal estate prices in some cities in India are among the highest in the world. The lease or rent of the property is one of the major areas of expenditure; high lease rentals eat into the profitability of a project.3. In addition to the high cost of real estate, the sector also faces very high stamp duties on transfer of property It varies from state to state (12.5% in Gujarat and 8% in Delhi). The presence of strong pro-tenancy laws makes it difficult to evict tenants. The problem is compounded by problems of clear titles to ownership, while at the same time, land use conversion is time consuming and complex, as is the legal processes for setting of property disputes.4. Lack of adequate infrastructure Poor roads and the lack of a cold chain infrastructure hamper the development of food and fresh grocery retail in India. The existing supermarkets and food retailers have to invest a substantial amount of money and time in building a food chain network.

5. Multiple and complex taxation system The sales tax rates vary from state to state. While organized players have to face a multiple point control and tax system, there is considerable sales tax evasion by small stores. In many locations, retailers have to face a multi-point octroi. With the introduction of Value Added Tax (VAT) in 2005, certain anomalies in the existing sales tax system causing disruptions in the supply chain are likely to get corrected over a period of time.

Chapter III

Study Objective and Methodology

Chapter IIIStudy objective and MethodologyStudy objective

1. To understand what HR Audit is all about.

2. To go through process of HR Auditing adopted by Pantaloons Fashion and Retail Ltd.

3. To go through HRMS of Pantaloons Fashion and Retail Ltd.

4. To analyse difference between Sparsh (the HRMS of Pantaloons Fashion and Retail Ltd.

5. To find out the Gaps in personal file management.

6. To find out the employees life cycle management.

Methodology of the study

Research The research done was exploratory in nature.

Scope of study The store Pantaloons Fashion and Retail ltd situated at Kolkata The study was entirely based on the data provided by the company.

Sources of Data

Secondary sources/ data - Secondary data was analysed from the company records i.e. employees personal file, there sparsh account and other required sources.

Chapter IV

Aditya Birla- A Company Profile

Chapter IVAditya Birla A Company Profile

Aditya Birla Retail limited

The Group's foray into the retail sector began in December 2006 when it acquired Trinethra, the chain of stores based in south India. May 2007 saw Aditya Birla Retail Limited (ABRL) launch their own brand of stores called 'More.' ABRL's vision is "to consistently provide the Indian consumer complete and differentiated shopping experiences and be amongst India's top retailers while delivering superior returns to all stakeholders".Currently, there are over 513 supermarkets and 15 hypermarkets. All the supermarkets are branded 'More.' and the hypermarkets are branded 'More Megastore'. The company has over 9,000 employees and has a pan-India presence. More supermarkets are neighbourhood stores with the core proposition of offering value, convenience and trust to the customers and averaging 2,500 sq. ft. area.The hypermarkets are self-service super-stores offering value and range in food and non-food products and services at a single location. Hypermarkets are located in large catchment areas and encourage mass consumption with discount prices and substantial depth of assortment with an average store size of 55,000 sq ft shopping area.In May 2009 Aditya Birla Retail introduced a value proposition for its supermarkets and encapsulated it into a promise of giving its customers "Hamesha Extra" which has resonated with the consumer. "Hamesha Extra" is the core essence of more. It means customers will always feel that they have got something extra while shopping at more. Within a short span of less than three years, More. Has a strong membership base of over 3 million members as part of its loyalty program. More has also launched a huge range of private labels in food and grocery, staples and apparel which have already obtained a significant share of category as well as salience with the consumer. Aditya Birla Retail Ltd was presented with the "Master Brand Award 2012" by the World Brand Congress on 14th February 2012 in Mumbai.The Master Brand Award is conferred upon those brands that appeal to a large set of consumers from premium to mass while constantly keeping in mind a consumer centric approach. Aditya Birla Retail Limited was presented the prestigious "Retail Best Employer of the Year" award by the global jury of the Asia Retail Congress 2012 in Mumbai.The Asia Retail Congress is Asia's single most important global platform to promote world-class retail practices. These awards are aimed at honouring the best, in the Asian retail scenario. The Asia Retail Congress is represented by 100 countries across the world.

Aditya Birla NUVO

Aditya Birla Nuvo Limited (ABNL), a US $4.75 billion conglomerate by revenue size, is part of Aditya Birla Group, a US $40 billion Indian multinational company. Having a market cap of about US $2.5 billion as on 30th November 2012, ABNL is present across financial services, telecom, fashion and lifestyle, IT-ITeS and manufacturing businesses. Powered by an intellectual capital of over 65,000 employees, ABNL touches the lives of more than 120 million Indians.The razor-sharp focus on each business has made it a leading player in most segments, including viscose filament yarn, branded garments, agribusiness, textiles and insulators. Over the past few years, Aditya Birla Nuvo, through its subsidiaries and joint ventures, has made successful forays into life insurance, asset management and other financial services, telecom, business process outsourcing (BPO) and IT services.With an optimum mix of revenue and profit streams, the company is in a strong position to maximise long-term shareholder gains.As a leading player, Aditya Birla Nuvo ranks as: India's second-largest producer and the largest exporter of viscose filament yarn. The country's largest premium, branded apparel company. Largest manufacturer of linen fabric in India. Among the most energy-efficient fertiliser plants. India's largest and the world's fourth-largest manufacturer of insulators.Among Aditya Birla Nuvo's joint ventures and subsidiary companies are: Idea Cellular Limited, which is among the top three cellular operators in India, in terms of revenue market share. Birla Sun Life Insurance Co. Ltd., which is among the top five private sector life insurance companies in India, in terms of new business premium. Birla Sun Life Asset Management Co. Ltd., which is the fourth largest asset management company in India, in terms of assets under management. Aditya Birla Minacs Worldwide Limited, which is the sixth largest Indian BPO company by revenue size.

CHAPTER:-VPANTALOONS COMPANY PROFILE

Chapter: - VPantaloons Company ProfilePantaloons, Indias premium lifestyle apparel company offer chic and trendy fashion to meet the youths ever changing needs. Pantaloons reflect the ideology of keeping alive the newness factor through fashion apparel and accessories that are visually appealing and fashionably upbeat.Since its inception, pantaloons progressed from retailing a mix of brands to its own popular private labels, designed by the in-house design studio. With a sharp focus on bringing the latest in fashion, the design studio combines its prowess in design and aesthetics to present styles that keep the consumer fashionably dressed each season.

Initially positioned as a store catering to the fashion needs of the entire family, Pantaloons has transitioned to a fashion and lifestyle brand with an emphasis on youth and a focus on designs that are inherently in sync with current fashion trends. This compelling combination has helped Pantaloons retain its place on the style radar of every consumer's wardrobe.

Pantaloons stores have an abundance of choices across categories that range from western to Indian wear, formal to party wear and active wear for men, women and kids. To add to the customer's choices that reflect style, attitude, and comfort, Pantaloons has extended its horizons to fashion accessories like fragrances, footwear, handbags, watches, sunglasses and much more. With a chain of 71 fashion stores across 35 cities and towns, Pantaloons is constantly extending its footprint in India.

Pantaloons, previously controlled by the Future Group, have now been taken over by Aditya Birla Nuvo Limited [ABNL]. ABNL is a part of the prestigious Aditya Birla Group, a $40 billion Indian multinational, operating in 36 countries across the globe with over 136,000 employees.

The Aditya Birla Group ranks high in the League of Fortune 500 Corporations of the world with a strong mix of talented and capable personnel comprising of 42 different nationalities, who are credited with anchoring the organisation and scripting one brilliant success story after another.

Backed by the giant conglomerates, ABNL and Future Group, both the entities will work in tandem to derive operational synergies for back-end, supply chain and other crucial value drivers of the business.

Pantaloons Fashion and Retail Ltd is India's fastest growing premium lifestyle apparel company. With innovative designs, concepts and products, the company brings the latest trends in fashion and clothing styles to the apparel market.The company offers an incredible and complete one-stop shopping experience to its buyers through its vast collection of more than 100 prestigious brands for the discerning fashionista. The 72 aesthetically designed stores spread across the country display a range of classy and trendy merchandise that truly lives up to Pantaloons maxim of fresh fashion.A typical Pantaloons store is spread across a sprawling retail space of about 28,000 sq. ft., comprising a brand portfolio that runs across a wide gamut of styles that spell class. The collection includes ready-to-wear western and ethnic apparel for men, women and kids, complemented by an exhaustive range of accessories.The womens section houses the private labels Bare Denim, Bare Leisure, Rig, Annabelle, Honey, and Ajile in western wear, as well as the choicest ethnic wear from RangManch, Trishaa and Akkriti. Popular brands like Lee Cooper, Biba and W are also available.The private labels for men in western wear include Lombard, Rig, Bare Denim, Bare Leisure and JM Sport apart from trendy brands like Urbana, Scullers, John Miller, and Indigo Nation. Akkriti provides a wide selection of ethnic wear.Kids can choose from private labels like Bare Denim, Bare Leisure, Rig, or indulge in exclusive brands like Lee Cooper Juniors, Chalk, Pink & Blue, and Sach in addition to international brands like Barbie and Disney. For the ethnic look, they can opt for traditional wear from Akkriti.Pantaloons offer much more than just apparel. Customers can shop from an assortment of watches from renowned international brands like Tommy Hilfiger, Esprit, Kenneth Cole, Citizen, Timex, and Titan, among other brands.Trendy sunglasses from Polaroid, Guess, Police, Scott, I Dee and Allen Solly are also available. The accessories and beauty segments display an attractive collection of ladys handbags from Lavie, Caprese, Fiorelli and Fastrack. Also available are products from colour cosmetic brands such as Bourjois, Chambor, Deborah, Faces, Revlon, Maybelline, and Lakme, as well as a widecollection of exotic fragrances.With its overwhelming repertoire of lifestyle apparel brands, Pantaloons is focused on growth while continuing to create fresh fashion. Pantaloons are recognised by its warm personalised service that completes the core proposition of this trendy chain.

Brands of Pantaloons Fashion and Retail Ltd.1. Bare Denim,2. Bare Leisure,3. Rig, 4. Annabelle, 5. Honey, 6. Ajile 7. RangManch,8. Trishaa 9. Akkriti 10. Lombard11. JM Sport 12. Urbana,13. Scullers,14. John Miller,15. Indigo Nation16. Lee Cooper Juniors, 17. Chalk,18. Pink & Blue, 19. Sach

SWOT Analysis of Pantaloons Fashion and Retail Ltd.Strength:- 1. It is Indias largest retailer having 1000 stores across 70 cities in India.2. It is countrys largest retailer by market capitalization and revenue.3. It manages high number of purchase orders.4. It is always updated with changing consumer preferences.5. Popular brand with a high presence across India.6. Highly strategic human resource management and development. It invest time and money in training people, and retaining them.7. Being financially strong helps pantaloons fashion and retail ltd deal with any problem, ride any dip in profits and out perform their rivals.Weakness:-1. It serves mass consumer base, still skilled labour force is not adequate when compared with global standards.2. Consumers from premium target group perceive it low quality brand.3. Pantaloons do not function internationally, which has an effect on success, as they do not reach consumer in overseas markets.

Opportunity:- 1. Increase in footfalls by increasing ATL-TV commercial promotions2. India is fast emerging as retail hub for top brands as government allowed FDI in single brand and multi brand retail.3. Organized retail is only 4.5% of total Indian retail industry.4. Huge untapped market.5. Rural retailing.Threat:-1. Strong competition from unorganised retail sector in India.2. Government policies are not well defined in emerging markets.3. Online shopping is emerging trend in consumers due to convenience.4. Being number one means that you are the target of competition.(Extra competition and new competitors entering the market could unsteady Pantaloons Fashion and retail ltd.)

CHAPTER: - VIHUMAN RESOURCE MANAGEMENT SYSTEM AT PANTALOONS

Chapter: - VIHuman Resource Management System

HRMS stands for Human Resource Management System. HRMS is used for hiring, training, managing, evaluating and maintaining information of all employees (Human Resource) in an organization. In some cases HRMS software is also known as HRIS, Human Resource Information System.

With the increase in Business complexity and competition, employee management has become increasingly more complicated and difficult. Employees expect more from their companies and companies expect more from employees. To achieve the maximum in each case, a proper system is required to manage employee expectations as well as their output.

Management of employees requires timely payroll management, succession planning, recruitment of the right candidates, and management of employees everyday needs like Leave approval, Expense Claims management, and Payslip management. To enable a company to get the maximum out of its employees, it needs to review their performance, their attendance, and their career progression.

An HRMS Software should ideally provide all these functions to an organization. Payroll Management is handled using the Payroll Module. Hiring is managed through the Recruitment Module. Performance evaluation is managed through the Performance Appraisal Module. Leave Approval through HRMS eLeave Module and Expense Claims through HRMS eClaims Module.

Importance of HRMS:-Organizational Effectiveness:-

The human resource management system of a company has a significant impact on individual and organizational effectiveness. A good HRMS brings consistency in human resource management practices and improves human relations in the company. An effective HRMS is focused on a strategic objective and works by improving employee knowledge, skills, motivation and contribution opportunities. Based on their overarching goal, human resource management systems contribute to organizational effectiveness in multiple ways.

Employee Commitment:-

An HRMS focused on increasing employee commitment will recruit selectively, provide employees with intensive training, and offer a high level of compensation.

Empowering Employees:-

The focus of an HRMS can be increasing the involvement of employees and empowering them. Under such a system, employees are given more decision-making power, and teamwork is encouraged.

HRMS maintained in Pantaloons Fashion and Retail ltd.

Pantaloons Fashion and Retail ltd. Also maintain certain Human resource management system and it named as SPARSH.SPARSH- it is a place where all information about the employees are stored. It contains sections like ESS (Employees Staff Service), employees, employees appraisal, Attendance, and many more facilities. Every employee can go through Sparsh with their unique ID and password created by the department.

Creation of HRMS login. HRMS login is created for benefit of employees working at Pantaloons.

HRMS is created through hiring done by HR of Pantaloons.

During hiring an employee code is given which is also used as unique identification code which is used as the username of their SPARSH account and a default password is given to them which can be further modified by the employees according to their preference.

CHAPTER:-VIIHR AUDIT

Chapters:-VI HR AUDIT

HRM includes different functions like HRP, job analysis and design, recruitment, selection, induction, performance appraisal, safety and health, welfare, industrial relations and many more. These functions are performed in furtherance of certain social, functional and personal objectives. At this stage several questions crop up, for example:

1. Does the organization do the HRP regularly in various categories?2. Does job analysis exists for all positions in the organization?3. Are all potential sources of recruitment identified and evaluated?4. Is there a performance evaluation system that helps asses past and potential performance?5. Is remuneration programme designed to motivate employees?6. Does the HRM practice respond to individual employee needs and aspirations?7. Does the organisation have high quality of work life?

It is necessary to take a look at these questions. HR audit is highly useful for this purpose. The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the Non-profits human resources system, and any issues needing resolution. The audit works best when the focus is on analysing and improving the HR function in the organization. The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it cant tell you what you need to do to address these issues. It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organizations mission and objectives can be realized.

Definition HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization.

APPROACHES TO HR AUDIT

1. Comparative approaches2. Outside authority approaches3. Statistical approaches4. Compliances approaches5. Management by objective

Comparative approaches: - In this, the auditors identify competitor company at the model. The results of their organisation are compared with that of the Model Company/ industry.

Outside authority approaches: - In this, the auditor use standards set by an outside consultant as benchmarks for comparison of own results.

Statistical approaches: - In this, statistical measures are performance is developed considering the companys existing information

Compliances approaches: - In this, auditors review past actions to calculate whether those activities comply with legal requirements and industry policies and procedure.

Management by objective approaches: - This; approach creates specific goals, against which performance can be measured, to arrive at final decision about industrys actual performance with the set objective.

SCOPE OF HR AUDIT

Generally, no one can measure the attitude of human being. HR audit must cover the activities of the department and extend beyond because employees problems are not confined to the HR department alone. So it is very much broad in nature. It shouldevaluate the personnel function, the use of its procedures by the managers and the impactof these activities on the employees. It covers the following HR areas:

1. Audit of all the HR function.2. Audit of managerial compliance of personnel policies, procedures and legalprovisions.3. Audit of corporate strategy regarding HR planning, staffing, IRs, remuneration andother HR activities.4. Audit of the HR climate on employee motivation, morale and job satisfaction.

1. Audit of HR function: This involves audit of all HR activities. For each activity,auditor must (i) Determine the objective of each activity,(ii) Identify who is responsible for its performance(iii) Review the performance,(iv) Develop an action plan to correct deviation, if any (v) Follow up the action plan.

The following criteria would help measure effectiveness of HR function. Each statement has a four point rating scale varying from very true to not true.1. In your company, all issues are closely related to every other business process.2. The HR department is represented in strategy building sessions of top management.3. The performance of HR department and the organisation are linked.4. The HR function is given more importance than other functions5. The HR managers have sufficient powers to suggest strategic initiative to the top management.6. The services of HR department are equally available to everyone.7. The HR department plans the companys manpower need proactively.8. The HR department links appraisal and compensation to corporateobjectives. 9. The HR department meets individuals and organisations training needs.10. The HR department does not handle staff-welfare canteens, or payrollsmanagement.11. HR department has knowledge of behavioural sciences and industrialpsychology.12. The HR department gets feedback on its performance from other employees.13. HR practices are audited, their costs computed and then effectivenessevaluated.

2. Audit of managerial compliance: This involves audit of managerial compliance ofpersonnel policies, procedures and legal provisions. How well re these complied withshould be uncovered by the audit so that corrective action can be taken.

3. Audit of HR climate: The HR climate has an impact on employee motivation, moraleand job satisfaction. The quality can be measured by examining employee turnover,absenteeism, safety records and attitude surveys.a) Employee turnover: It refers to the process of employees leaving an organization.Higher turnover involves high cost of recruitment, selection, training, etc. High turnover may also lead to disruption of production, problems in quality control, etc. Resignation, retirement, death and transfers are unavoidable labour turnover. The specific actions that will reduce employee turnover are better hiring practices, orientation and training, working condition, better remuneration and growth opportunities.

b) Absenteeism: It refers to the failure on the part of the employees to report to work. In other words, unauthorized absence continues absenteeism. Absenteeism costs money to the organisation, besides reflecting employee dissatisfaction. Unavoidable absenteeism happens when employee or his family member is sick whereas avoidable occurs because of night shifts, indebtedness, lack of job security, unfriendly supervision, etc. Managers should take steps to remove the causes. They should make the work environment such that employees feel that it makes sense to work in the firm rather than sitting at home and wasting time.

c) Accidents: Organization maintains records related to the accidents. Organisation must have a safety plan, implement it and evaluate its effectiveness.d) Attitude surveys: Attitude surveys are the most powerful indicators of the organizational climate. It determines an employees feelings towards the organisation, peer group,colleagues, supervisors, etc. The surveys may be conducted by face-to-face interviews but are usually conducted through questionnaires.

4. Audit of corporate strategy: HR professionals do not set corporate strategy but they strongly determine its success. Corporate strategy helps the organization gain competitive advantage. By SWOT analysis, top management devises the ways of gaining and advantage. Whether the company stresses superior marketing channels, service, innovation, or some other approach, HRM is affected

Benefits of HR Audit

The team that is responsible for the audit should represent a cross-section of theorganizations staff, including line staff, middle and upper management and those responsible for HR functions. It provides the various benefits to the organization. Theseare:

1. Getting the top management to think in terms of strategic and long-termbusiness plans: It may sound ironical that the HRD audit should begin with such strategic plans, but in some cases, it has compelled the top management to think about such plans. While some companies started thinking about them, a few others started sharing these plans with a larger number of persons. Since the employees cannot participate in an HRD audit without some sharing of these plans, the audit has forced the top management to share their plans which has resulted in increased employee involvement. In a few cases a new system of annual planning and sharing of business plans with the management staff have been initiated to enable them plan their own activities and competency development programmes.

2. Clarifying the role of the HRD department and line managers in HRD: In almost all cases, the HRD audit has been found to draw the attention of employees at various levels to the important role of the HRD department in current as well as the future. Enhanced role clarity of HRD department and HRD function and increased understanding of line managers about their HRD role have been the uniform results of HRD audit. The degree may vary from organization to organization depending on other factors.

3. Streamlining of other management practices: Most often HRD audit identifies the strengths and weaknesses in the some of the management systems existing in the organization. It also points out to the absence of systems that can enhance human productivity and utilization of the existing competency base; for example, the MIS, rules and procedures, etc. which may have an effect on the functioning of the employees. In a few cases an HRD audit has helped the management look at some of these sub-systems and work procedures. Preparation of a manual of delegation of powers, clarification of roles and responsibilities, developing or streamlining the manuals of financial and accounting procedures and systems, strengthening the information systems, and sharing of information are some of the resultant activities in this direction.

4. Better recruitment policies and more professional staff: An HRD audit points out to the competence base required. It sets the stage and gives direction for the competency requirements of employees at various levels and thus provides a base for recruitment policies and procedures. In some companies, it has resulted in strengthening the recruitment policies and procedures. As a result of HRD audit, new recruitment and retention strategies have been worked out.

5. Changes in the styles of top management: One of the objectives of HRD is to also create a learning organization. A learning culture can be created only if the top managers of the company exhibit an HRD style of management. Such a style requires an empowering attitude, participative style of management, and an ability to convert and use mistakes, conflicts and problems as learning opportunities. Some of the top-level managers in India have been found to block employee motivation and learning through coercive, autocratic and even paternalistic styles of management. In such cases the HRD audit has pointed out the difficulties in developing and preparing the employees for the future. This has helped to provide subtle feedback to the top management and to initiate a change process.

6. Improvements in HRD systems: The HRD audit has helped most of the organisations in taking stock of the effectiveness of their HRD systems and in designing or re-designing the HRD systems. The most frequently changed or renewed systems include performance appraisal, induction training, job-rotation, career planning and promotion policies, mentoring, communication, and training.

7. More planning and more cost-effective training: HRD audits have been found to raise questions about the returns on training. One of the aspects emphasized in the HRD audit is to calculate the investments made in training and ask questions about he returns. The process of identifying training needs and utilization of training inputs and learning for organisation growth and development are assessed. As direct investments are made in training, any cost-benefit analysis draws the attention of the top management and HRD managers to review the training function with relative ease. One organization strengthened its training function by introducing a new system of post-training follow-up and dissemination of knowledge to others through seminars and action plans. Many organisations have developed training policies and systematized their training function. Assessment of training needs has also become more scientific in these organisations.

8. Increased focus on human resources and human competencies: One of the results of an HRD audit is to focus on new knowledge, attitudes and skills required by the employees in the organization. Comments are made about the technical, managerial, human and conceptual competencies of the staff at various levels. This differentiation has been found to help organisations identify and focus sharply on the competency requirements and gaps. The audit establishes a system of role clarity and fixing of accountabilities. This can take place through separate role clarity exercises or through the development of an appropriate performance appraisal system. In any case the attention of the organization gets focused on developing the competency base of the organization. More sensitivity is developed to the missing aspects of competencies. For example, one organization has been found to neglect human relations competencies of their staff, resulting in a large number of human Problems leading to wastage of time. Some of these got streamlined and various HRD policies also got strengthened.

9. Strengthening accountabilities through appraisal systems and other mechanisms: An HRD audit can give significant inputs about the existing state of the accountabilities of employees. This gets assessed through performance appraisals as well as through the work culture and other cultural dimensions. A number of organisations have introduced systems of performance planning, sharing of expectations and documenting the accountabilities of staff.

HR Auditing Done at Pantaloons Fashion and Retail ltd.

HR AUDIT AT PANTALOONS FASHION AND RETAIL

SPARSH AUDIT (HRMS)PERONAL DOSSAIR AUDIT

HR Auditing done at Pantaloons carried few section and they where

SPARSH Audit:-

1. ESS ( Employees Self Service)

a) Sparsh Name: - Every employee can go through sparsh with their unique Id and password created by the department.

In this part evaluation of employees name has been done on the basis of documents provided by the employees at the time of joining.

a. Last months salary slipb. Voter ID cardc. Pan Cardd. Bank A/Ce. P/F Slip

b) Date of Birth of employees in Sparsh :-i. In this part evaluation of employees actual birth date is been rectified with the help of ii. Documents like PAN Card, Class X admit card, Voter ID Card, Passport, Adhar card.

c) Father and Mothers Name in Sparsh:-In this part evaluation of employees family details was done with the help of Voter ID card, and Bank A/C

d) Address :- In this basically the address was matched from employees documents like Voter ID Cards, Ration Cards, Electric Bill, Telephone bill, Driving licence.

e) Qualification:-In this evaluation is been done with the help of certificates provided by the Schools and colleges or any other authorised institute.

f) Date of joining:- In this the date of joining is matched with the date mentioned in the joining report made at the time of employees joining.

g) Contact number:- In this verification of the contact number is done. Whether the contact number genuine or not.

2. Attendance Gap Report Audit:

This is a type of audit where employees attendance is taken as key point and according to this auditing is done. Here first of all total number of employees are recorded then there week off and their shift details are recorded. Then the data are audited and are tallied whether they are correctly recorded or not whether the off days are mentioned or not. and for example if any of the employee doesnt have off days then the correction are made and the week off / shifts are allocated to them.

Personal Dossier Audit:-

Another type of auditing done was Personal file auditing. This was done with the help of checklist provided by the company according to the policies.

Personal file checklist at Pantaloons

1.) Initial joining and the checklist:-In initial joining current checklist are provided by the company to look forward and to collect the according to the checklist. And the checklist is as follows;-

Name- Date of birth-Department-Band -

Joining report:-

Offer letter (Duly acknowledge copy) Interview Assessment form Updated Resume Appointment letter (Issued by future group) duly acknowledge Joining report Employment Application Form Code of conduct Provident fund nomination Form (form-2) Gratuity ESIC nomination form- Form 1 (If applicable) Mediclaim/ insurance Form Reference Check form (where possible)

Certificates:- Residence proof PAN CARD (DOB proof) (for Band 1 any other DOB proof applicable) Education certificates One cancelled cheque, of the salary bank a/c Relieving letter/ acceptance of resignation letter Last salary slip Appointment letter of the previous employer & salary revision Experience certificate Income tax declaration form (In sparsh/ new ESS) Form 16 (tds) certificates 3 passport size photo 2 post card size family photo for ESIC ( If applicable) Medical report

Annual form:-

Confirmation letter after 6/12 months Transfer letter (when applicable) Appraisal form & increment letter General correspondence documents.

1) Employees life cycle:-In these entire documents of an employee is recorded and audited starting from initial joining till the exit of an employee. The file consist of

Employees file open: - Joining docket 1.) Employee joining report2.) Code of conduct3.) Employees joining form4.) Nomination & declaration form5.) Employees Provident fund scheme6.) Payment of Gratuity Act.Closes with:-1.) Exit interview form2.) Full and final statement3.) Transfer order

Chapter VIII

Conclusion and Bibliography

Chapter VIII

Conclusion

The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the non-profits human resources system, and any issues needing resolution. The audit works best when the focus is on analysing and improving the HR function in the organization. The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it cant tell you what you need to do to address these issues. It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organizations mission and objectives can be realized.

Finding out what is insufficient and inadequate is the first step toward improvement. If deficiencies are identified, it is important to take steps to correct those deficiencies.Organizations should take that first step only when they are ready to act on the findings, and to make necessary improvements in their HR skills, processes, and systems. Improving the HR system takes some time. A work plan with a timeline, accountability, and deliverables should be created after the team reviews the completed audit and identifies areas where improvement is needed. Follow-up and review should be a regular management function, performed on an on-going basis. A healthy HR function in an organization is as important as the physical and mental well-being of a human body. Typically the basic reason why organizations prefer to conduct an HR audit is to get a clear judgment about the overall status of the organization and also to find out whether certain systems put in place are yielding any results. HR audit also helps companies to figure out any gaps or lapses and the reason for the same. Since every company plans certain systems and targets, an HR audit compares the plans to actual implementation. The concept of HR audit has emerged from the practice of yearly finance and accounting audit, which is mandatory for every company, to be done by external statutory auditors. This audit serves as an examination on a sample basis of practices and systems for identifying problems and ensuring that sound accounting principles are followed. Similarly, an HR audit serves as a means through which an organization can measure the health of its human resource function.

Bibliography

Reference book

Human resource management and personal management K Aswathapa

Reference web site

www.hraudit.com

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