Platt Perspective on Business and Technology

Human Resources audits 101 – 4: adding in outside regulatory and reporting requirement complexities 1

Posted in HR and personnel by Timothy Platt on November 18, 2013

This is my fourth posting to a series on performance reviewing and assessing Human Resources as a crucial area of ongoing business function, and how an HR department or service does or does not align with and support its business, and both operationally and strategically (see HR and Personnel, postings 183-185 for Parts 1-3.)

I have been focusing up to here in this series on HR business processes that take place within the organization and without explicit consideration of external factors that might specifically shape priorities or decisions made. I wrote in this regard about normative, business as usual processes and task completion in Part 1: starting a new series and Part 2: strategically selected metrics as performance tools, and then turned to consider problem solving and exception handling in Part 3: operational exceptions and problems. My goal for this posting is to expand out this discussion to explicitly consider a commonly significant source of outside influence: regulatory law as it shapes what is allowed and what is required as basic business processes and process-outcomes.

• Regulatory law impacts on businesses in a variety of ways,
• And while Human Resources is not usually the first department or service that would come to mind to a senior executive facing a need for organizational change as mandated by it, HR of necessity plays a crucial role in implementing such change.

To take that out of the abstract and flesh this discussion out with real world examples, I would cite two crucially important areas of regulatory law that HR must become involved in if legal requirements are to be met: employee rights requirements and legally mandated protection of personally identifying information that a business might acquire and use in the course of its normal operations. I will focus in this posting on the vast range of law and adherence to it that fall within the general purview of employee rights, and begin that by offering a partial list of the types of issues included there with legally mandated:

• Harassment and workplace discrimination protection,
• Whistle blower protection,
• Rights to fair worker compensation, where this often includes rights such as minimum wage laws and in many cases also means rights to overtime pay and for employees to receive monies paid by customers as tips and gratuities,
• Workplace safety requirements and more, and
• Legally mandated rights to organize into and participate in trade unions.

This is, as noted above, only a partial list and while some of the types of rights cited here apply more fully in some countries than in others, most countries offer employees at least some legally mandated workers’ rights and some regulatory law-specified and enforced protections.

Human Resources enters into this in a variety of ways. First of all, operational processes and systems are set up for managing a number of these issues though HR, and for many businesses and types of business it is HR that takes ownership responsibility for this activity.

• Harassment and workplace discrimination protection come immediately to mind there, where issues reporting is managed centrally through that department,
• As are employee training on harassment and discrimination and ideally for all new hires,
• And mechanisms for response when problems in this are reported (see, for example, my series: Confronting Workplace Discrimination at HR and Personnel as postings 57-60 for Parts 1-4.)

And this is where Human Resources auditing enters this narrative. Effective, systematically documented audits are essential here, and for a variety of reasons, including:

• Ongoing review of business performance as would be required and used for internal business purposes,
• Compliance documentation as it is required by outside oversight and regulatory bodies, and
• For legal due diligence purposes, to both lessen the likelihood that the business itself might become a plaintiff in a law suit if harassment or discrimination are claimed to be taking place, and to lessen risk of loss if the business is so identified and brought to court.

If a business has a solid policy in place against workplace harassment and discrimination and they can show that they have consistently followed through on that policy with systematic active and even proactive resources in place for training employees and for supporting them in this, that should at least lessen risk of claims of irresponsibility or failure to act on these problems if they arise anyway.

This is important. I discussed a number of the more important pieces of the puzzle that a business needs to address in both protecting the interests of its employees in the face of potential harassment or discrimination, and for protecting its own best interests through that, in my workplace discrimination series just cited above. I in effect complete the circle to that here, where I write of HR auditing and the need for effective ongoing performance reviews of these critically and even legally required protective systems.

I am going to continue this discussion in a next series installment where I will at least briefly delve into some of the other aspects of employee rights and protections that I listed above. Then I will turn to consider HR’s role in safeguarding sensitive and confidential information, and the role of effective auditing in making that demonstrably possible. Meanwhile, you can find this and related postings at HR and Personnel.

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