ELLA® helps organizations assess the Five Critical Components of the HR Audit Process:

1.  Activities:  The starting point of the HR auditing process is a review of the organization’s activities, that is, the tasks and actions that create or implement employment policies, practices, procedures, and programs.  Activities include such actions as the promulgation of an EEO policy statement and employment policies, and the posting of required employment posters.  The Activities component of HR audits is typically evaluated by using a “checklist approach,” that is, an activity is check off when it is completed.

 2.  Behaviors:  Behaviors in the HR audit context are actions and conduct that affect ─ either positively or negatively ─ the implementation or effectiveness of the organization’s policies, practices, procedures, and programs, and demonstrate the organization’s commitment to stated goals and objectives.  Examples of  Behaviors include: the creation of a corporate culture that values and promotes equal employment opportunities, diversity, and empowerment; the visible and       unequivocal support by senior management for the organization’s diversity efforts; and the budgeting of sufficient resources to achieve EEO compliance and diversity goals.  Behaviors are frequently assessed using qualitative measures, such as culture scans and employee satisfaction surveys.

3.  Risk Assessment:  Risk assessment is the identification of current and/or future events that have the potential to cause loss, peril, or vulnerabilities; or that create new opportunities for the organization to achieve its business objectives.  Risk assessment provides management with the information to make informed decision about the allocation of the organization’s human, physical, and financial capital and about effective ways to eliminate, mitigate, control, or transfer risks.  Human resource management and employment practices liability risks include: employment law and regulation compliance failures; lost business opportunities due to the failure to attract and hire top talent; intangible asset losses due to turnover of top talent and key employees; and lower profitability due to the inability to control labor costs.  Risk assessments include an assessment of the external and internal factors that impact human resource management and  employment practices – including the economy; legal, regulatory, and litigation trends; and changes in the workplace and work force.

4.  Internal Controls:  Internal controls are processes, test, and assessments that: 1) help ensure compliance; 2) manage risks; and 3) help ensure the achievement of organizational goals.  Internal controls include an evaluation of: 1) the effectiveness and efficiency of HR management policies, practices, and procedures; 2) the accuracy and reliability of HR management reporting; and 3) the level of compliance with laws and regulations, industry and professional standards, codes of ethics, organizational policies, and budgets.

5.  Outcomes:  Outcomes and results are quantitative and qualitative measurements and metrics that measure and help assess the achievement of organizational goals and objectives.  Outcomes include: 1) the identification of metrics used by the organization to measure organizational and individual performance; 2) the assessment of HR managment results by comparing actual results against projected and expected results, budgets, and internal and external standards; and 3) an analysis of the activities, behaviors, and internal controls that are needed to maintain or improve future     results.