Successful employers, regardless of size, are generally proactive in their approach to employment and personnel issues.
They understand that success results from effective and intelligent planning, learning from personnel “mistakes,” and a commitment to constant, never-ending improvement. Successful employers realize that sound human resource audits are a very effective way to improve employee hiring, job performance, and retention, while at the same time, reduce the risk of employment-related litigation.
A human resource audit routinely involves (i) a comprehensive review of employment policies and procedures, and (ii) a commitment to conducting meaningful and regular training of employees and managers.
These audits should be conducted for a variety of reasons, including the following:
- To evaluate procedures and ensure that forms are properly updated and revised
- To determine the appropriateness of existing policies and to determine new policies that need to be established
- To employ the best HR practices
- To ensure compliance with ever-changing employment laws
- To improve employee relations and employee morale
- To improve the rate of successful hires
- To improve the likelihood that the organization can retain valued employees
Although the needs of employers may vary depending upon size and industry, an effective human resource audit should ordinarily include a review or consideration of the following subjects and documents:
Hiring
- Job application forms
- Job posting policies
- Advertising for job openings
- Job descriptions
- Interview training for managers and supervisors (which involves learning what questions, as a legal matter, may and may not be asked); preparing a set of meaningful interview questions, as well as a set of meaningful questions to ask references; properly evaluating candidates; conducting effective reference checks; etc.)
- Job offers (offer letters)
- Background check forms and procedures
- I-9 forms
- Employment agreements; independent contractor agreements
- Non-competition, non-solicitation and confidentiality agreements
- References
- Applicant disclosure forms
Orientation
- Educate newly hired employees about the organization’s expectations about maintaining confidentiality of employer and customer sensitive, proprietary, and non-public information
- Review policies and procedures for (non-exempt) employees obtaining approval before working overtime
- Consider having non-exempt employees sign an Orientation Certification confirming their understanding of, and obligation to fully comply with, all overtime policies and procedures
Wage and Hour Laws and Regulations
- Wage policies
- Methods of recording time
- Paid time
- Regular rate of pay
- Overtime and exemptions from overtime
- Understanding when a final paycheck must be issued and when employers may withhold monies from paychecks
- Understanding when bonuses are earned and due to be paid
- Timesheet certifications for non-exempt employees
- Working “off the clock”
- Handling remote work wage issues
Employee Handbook
- Preserving employee at-will status
- Consistent practices
- Required/recommended policies (Note: employers with offices in more than one state may need an addendum to handbook)
Preventing Discrimination, Harassment, Bullying, and Violence
- Establish comprehensive policies
- Regular training for all employees and managers
Family and Medical Leave Act
- Policies and procedures
- Forms
- Educating managers on law (as well as any analogous state leave laws) and the importance of designating leave
Americans With Disabilities Act
- Create suitable handbook policy
- Train managers on the law and importance of properly handling accommodation requests
Sick and Safe Leave Laws
- Policies and procedures
- Forms
- Educating managers on laws, the importance of properly designating and tracking sick and safe leave, and relationship to other leave laws
Artificial Intelligence (AI)
- Create or, as the case may be, update AI policies which address, among other things, acceptable use of generative public and private AI tools.
Personnel Records
- Retention policy
- Access policy
Discipline and Performance Reviews
- Policies
- Meaningful evaluations and evaluation forms
- Grievance procedures
- Supervisor training
- Employee reviews – formal and informal
- Staff development
- Performance plans
Termination
- Exit interviews
- Training supervisors how to handle employee terminations legally and with dignity
- Severance and severance agreements
- Liability checklist
- Exit letter reminding employees of their ongoing obligations to organization
- Handling reference requests
Employee Retention
- Review and revise orientation procedures
- Establish competitive pay and benefit procedures – use trade associations, etc. to gather information about what others in the industry are doing
- Create career growth opportunities
- Solicit employee feedback
- Evaluate the reasons why employees have left to better tailor hiring procedures
Insurance
- Consider obtaining Employment Practices Liability Insurance (EPLI); review existing EPLI policy with knowledgeable agent and counsel
Regularly Scheduled Reviews of HR policies and procedures
- At least once a year
In conclusion, human resource audits are an important step in creating sound, effective hiring, retention, and performance management policies and procedures.
The expression “an ounce of prevention is worth a pound of cure” is perhaps never more true than when it comes to taking constructive measures to reduce the risk of employment-related litigation.
Employers who take this expression to heart and consistently act on it can improve hiring decisions; increase employee retention and job satisfaction rates; properly handle employee separations when they become necessary; meaningfully reduce the risk of litigation and damage to their reputation and brand; and, at the same time, improve the financial “bottom line.”
