Using HR Operational Reviews to Improve Business Performance

by | Feb 23, 2024 | Blog

  • Integrity HR

    Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success.

    Contact us for more insights - 502-753-0970 or

In the rapidly evolving business landscape, the strategic importance of Human Resources (HR) cannot be overstated. HR plays a pivotal role in managing the most valuable asset of any organization: its people. As such, regular audits or operational reviews of the HR function are crucial for ensuring that an organization’s human capital is being managed effectively and aligning with overall business goals. This article delves into the essence of human resource operational reviews, examining the key elements to evaluate, the recommended frequency of assessments, and the top areas for improvement that can significantly enhance business results.

HR Operational ReviewsUnderstanding HR Operational Reviews

A human resource operational review is a comprehensive method of examining and evaluating an organization’s HR policies, practices, procedures, and strategies to protect the company, establish best practices, and identify opportunities for improvement. Much like a financial audit assesses the financial health of a company, an HR operational review delves into HR health, ensuring legal compliance, and enhancing workforce efficiency and satisfaction.

Elements to Evaluate in a HR Operational Reviews

The scope of an HR operational review can vary widely, but there are several core elements that are commonly evaluated:

  1. Compliance with Laws and Regulations: Ensuring adherence to all labor laws and regulations, including those related to employment, compensation, and workplace safety.
  2. HR Planning and Policy: Reviewing the effectiveness of HR planning and the relevance of HR policies to current organizational goals and legal requirements.
  3. Recruitment and Selection Processes: Evaluating the efficiency and fairness of recruitment and selection procedures, ensuring they align with the organization’s diversity and inclusion goals.
  4. Performance Management Systems: Assessing the effectiveness of performance appraisal systems and their alignment with organizational objectives.
  5. Compensation and Benefits: Analyzing compensation structures and benefits packages to ensure they are competitive and aligned with industry standards.
  6. Training and Development: Examining the relevance and impact of training and development programs on employee performance and career growth.
  7. Employee Relations: Assessing the state of employee relations, including mechanisms for addressing grievances and fostering a positive workplace culture.
  8. Succession Planning: Reviewing the processes in place for identifying and developing future leaders within the organization.

Frequency of HR Operational reviews

The frequency of HR operational reviews can depend on various factors, including the size of the organization, the rate of change in the external legal and business environment, and internal changes in policies or strategy. As a general guideline, conducting a comprehensive HR operational review annually is advisable. However, it may be beneficial to perform more frequent audits (e.g., semi-annually) of specific HR areas that are more dynamic or subject to frequent changes in laws and regulations.

Top Areas to Improve in Human Resources

Improving certain areas within HR can have a profound impact on the overall business results. Here are some critical areas to focus on:

  1. Enhancing Recruitment and Selection: Streamlining recruitment processes to attract and select the best talent can directly influence the organization’s performance and competitive edge.
  2. Developing a Robust Performance Management System: Implementing an effective performance management system that motivates employees, aligns individual performance with organizational goals, and identifies development opportunities.
  3. Fostering Employee Engagement and Satisfaction: Engaged employees are more productive, have lower turnover rates, and contribute positively to the company culture.
  4. Investing in Training and Development: Continuous investment in employee development not only boosts individual performance but also prepares the organization for future challenges by ensuring a skilled and adaptable workforce.
  5. Promoting Diversity and Inclusion: A diverse and inclusive workplace fosters innovation, improves decision-making, and enhances employee satisfaction and loyalty.

Human resource operational reviews are a vital tool for organizations seeking to optimize their HR functions, ensure compliance, and align HR strategies with business objectives. By regularly evaluating key elements such as compliance, recruitment, performance management, and employee relations, companies can identify areas for improvement that directly impact business results. Investing time and resources into areas like employee engagement, diversity and inclusion, and technology can further enhance the strategic value of HR, ultimately contributing to the organization’s success in the competitive business landscape.

In navigating the complexities of HR management, organizations that commit to regular HR operational reviews and continuous improvement in critical HR areas are better positioned to adapt to changing market dynamics, retain top talent, and achieve sustained business growth.

Reach out to us for a FREE HR Consultation

Download Our FREE Resources

A list of our useful HR resources