Category Archives: HRD

What does a full HR Audit entail”:

1)Legal compliance

2)Compensation/Salary Administration




6)Training and Development

7)Employee Relations


9)Files/Record Maintenance/Technology

10)Policies and procedures (including employee handbook)




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Posted by on January 20, 2013 in HRD


Why Do An Audit?

1)To insure the effective utilization of an organization’s human resources.

2)To review compliance with a myriad of administrative regulations.

3)To instill a sense of confidence in management and the human resources function that it is well managed and prepared to meet potential challenges.

4)To maintain or enhance the organization’s and the department’s reputation in the community.

5)To perform a “due diligence” review for shareholders or potential investors/owners.



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Posted by on January 20, 2013 in HRD


What is an HR Audit?

An audit is a means by which an organization can measure where it currently stands and determine what it has to accomplish to improve its human resources function. It involves systematically reviewing all aspects of human resources, usually in a checklist fashion, ensuring that government regulations and company policies are being adhered to. The key to an audit is to remember it is a learning or discovery tool, not a test. There will always be room for improvement in every organization.



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Posted by on January 20, 2013 in HRD


Leave Encashment / LEAVE SALARY

As per Service rules every employee is entitled to certain no. of leaves per annum. If an employee does not utilize all his leaves available to him per annum such unutilized either get lapsed or get carry forward which can be enchased later. If such carry forward leaves are liquidated in cash form during the continuity of employment or on retirement, it is known as leave salary.

The taxation of Leave salary for various categories of employees is shown here under:

Status of Employee

Nature of Leave Encashment


Government/ Non-Government employee

Leave encashment during Continuity of employment

It is chargeable to tax. However relief can be taken under section 89

Government employee

Leave encashment at the time of retirement / leaving job

It is fully exempt from tax under section 10(10AA)(i)

Non-Government employee

Leave encashment at the time of retirement / leaving job

It is fully or partially exempt from tax in some cases under section 10(10AA)(ii)

In Simple words from the above tabloid summary we can conclude that Leave Salary is chargeable to tax only in two cases first accumulated leave being enchased by any class of employee- Govt. or Non Govt. during the continuation of employment whereof it is fully chargeable to tax.

Second being accumulated leaves enchased by a non govt. employee on his/ her retirement whereof the complicated part of calculation of exempted leave salary comes into picture which can be calculated as LEAST of the following:

1. Period of earned leave (in no. of months) to the credit of the employee at the time of his retirement leaving the job ×Average monthly salary.
2. 10 × Average monthly salary.
3. The amount specified by the Government  i.e., Rs. 3,00,000 /-;
4. Leave encashment actually received at the time of retirement.

How to find out leave standing to the credit of an employee at the time of retirement or leaving the job – THREE STEPS THEORY

Step (a) – Find out duration of services in number of years (ignore any fraction of year).

Step (b) – Find out rate of earned leave entitlement from the service rules – how many days leave is credited at the rendered for each year of services (earned leave entitlement can not exceed 30 days for every year of actual services rendered for the employer from whose services he has retired).

For instance, if earned leave is credited at the rate of 45 days leave for each year of service, for step (b) calculation shall be made at the rate of 30 days leave for each year of service. If, however, earned leave is credited at the rate of 23 days leave for each year of service, for step (b) calculation shall be made at the rate of 23 days leave for each year of service.

Step (c) – Find out earned leave actually taken or enchased (in number of days) during the service time, the computation shall be made as follows:-

Step (a) × Step (b) minus Step (c) ÷ 30

How to find out Average monthly salary?

Salary, for this purpose, means basic salary and includes dearness Allowance if terms of employment so provide. It also includes commission based upon fixed percentage of turnover achieved by an employee, (if any). ‘Average Salary’ for the aforesaid purpose is to be calculated on the basis of average salary drawn during the period of 10 months ending on the date of retirement.


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Posted by on January 18, 2013 in HRD, Statutory Compliance


Social Security

Social security is one of the key components of labour welfare. Labour welfare refers to all such services,amenities and facilities to the employees that improves their working conditions as well as standard of living. Social security benefits provided by an enterprise should protect not only their employees but also their family members through financial security including health care. Social security envisages that the employees shall be protected against all types of social risks that may cause undue hardships to them in fulfilling their basic needs.

In India, provision for social security to the workers occupies a very important place in the industrial set up. It is included in our Constitution under the Directive Principles of State Policy. It thus makes the ‘State’ bear the primary responsibility for developing an appropriate system for protecting and assisting its workforce. Hence, a Social Security Division has been set up under the Ministry of Labour and Employment. The division deals with framing of social security policy for the workers, administration of all the legislations relating to social security and implementation of the various social security schemes. Social Security to the workers is provided through the five Central Acts:- (i) The Employees’ State Insurance Act, 1948; (ii) Employees’ Provident Funds & Miscellaneous Provisions Act, 1952; (iii) The Workmens’ Compensation Act; (iv)The Maternity Benefit Act;and (v) The Payment of Gratuity Act.  In addition, there are a large number of welfare funds for certain specified segments of workers such as beedi workers, cine workers, construction workers etc.

The social security package broadly covers two categories of labour welfare measures:- (i) those relating to the medical facilities, compensation benefits and insurance coverage to the employees; (ii) those relating to the provident fund and gratuity provisions. It thus consists of all types of preventive, promotional and protective measures for labour welfare.


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Posted by on January 16, 2013 in HRD


Employee Benefits

Companies provide their employees and workers with a variety of benefits. These benefits are basically forms of value or services that are provided by an employer to his employees for their contribution in the performance of the organisation . Such benefits are an important component of a company’s remuneration package for attracting and retaining its employees. The benefits serve as incentives to the employees and encourage them to work harder for the organisation. These also help in building up employee job satisfaction.

These benefits may be financial or non-financial,long term or short term,free or at concessional rates.They may include educational, residential, medical, or recreational facilities. Such facilities may be provided individually or collectively and inside or outside the organization. Thus the employee benefits are the comforts and the facilities given  to employees to enable them to work in a healthy and peaceful atmosphere.

The employee benefits of a company generally includes:- (i) A remunerative wage structure which motivates the employees to contribute their maximum worth to the enterprise; (ii) bonus to the employees either on festive occasions or as a reward for their contribution in the high performance of the firm; (iii) Social security benefits for employee welfare in the form of provident fund, gratuity, medical facilities, compensation and insurance policies; (iv) different types and number of leaves so that the employees may revitalize themselves and contribute their best effort to the organization; (v) employees who wish to voluntarily retire from an organisation are provided with several benefits under the voluntary retirement scheme.

Given the various types of employee benefits, a firm may design,administer and manage a comprehensive  benefit package for its employees depending on its work culture and organisational set up.


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Posted by on January 16, 2013 in HRD


Differences Between Job Function & Job Title

Internal Vs. External Importance

One distinction between job title and function is that a title is often used to provide a label for an employee to the public. On business cards and in introductions, a title helps identify a person’s role within an organization. Job functions provide more benefit internally. A job description typically outlines the various functions of a particular job that an employee is expected to perform.

Substance or Style

Organizations sometimes serve job titles as a way to emphasize the prominent function or role in a given position. For instance, a sales associate in a retail store normally performs active sales processes, including questioning customers and making product recommendations. Job functions are detailed views of the various activities an employee performs. The process of working with customers and making product recommendations is a typical job function of a sales associate. A function is the substance within a given position or job title.


An obvious difference between job title and job function is that most employees have one job title, but may have many job functions. A store manager has one title, but his functions include hiring and training employees, motivating them, scheduling hours, overseeing merchandising and doing regular inventory checks. However, these same functions may be performed by a management employee with the title of store manager, general manager, manager or senior manager.


Both concepts play a role in the compensation system within an organization. People bearing the same job title often make the same salary or similar pay as designated on a formal or informal pay schedule. While the title is used to identify position on a pay schedule or compensation system, job functions are used to determine the appropriate level of pay. An entry-level office clerk may denote a pay range of X to Y, a salary commonly posted for this position. This pay range is based on a human resources assessment of the skills required and level of tasks performed in the position’s job functions.