The Human Resource department of an organization has multiple responsibilities. It is responsible for employee selection, development, evaluation, compensation and employee relations. The role of Human Resource management is being increasingly affected and reshaped by the growing diversity of the workforce, global and domestic compensation, and complex legal and ethical issues. In short, the Human Resource department of an organization is faced with balancing its responsibilities towards the organization it serves as well as the society in which it operates.

A Human Resources audit evaluates the Human Resource activities in an organization with a view to their effectiveness and efficiency. It is done with a view to improve those activities, uncover shortcomings and address the deficiencies. The value of the audit is that it provides feedback both to the Human Resource managers and the organization about how well the Human Resource department is meeting its duties and responsibilities. Essentially, the audit is a quality control check on the Human Resource activities within a division or company and as to how well the activities support the organization's overall strategy. (Biles & Schuler, 1986)1

The Human Resource audit has many benefits. It can serve to remind members of the Human Resource department of their roles and contributions to the organization. It serves to create a more professional image of the department in the eyes of both management and the employees. The Human Resource audit can help clarify the department's role and lead to greater uniformity in practices across geographically scattered and decentralized Human Resource functions typical of large firms. Its most important contribution to the organization and its employees is that it can correct problems and ensure compliance with a variety of local laws and the strategic plans of the organization concerned.

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