DECA Human Resources Management Practice Exam

What is the purpose of an HR audit?

1. To reduce the number of employees in a company

2. To assess the effectiveness of human resources

3. To hire new employees

4. To streamline payroll processing

The correct answer is: To assess the effectiveness of human resources

The purpose of an HR audit is to assess the effectiveness of human resources within an organization. This evaluation allows a business to review its HR policies, practices, and procedures to determine how well they align with organizational goals and legal requirements. An HR audit typically involves a thorough examination of employee records, compliance with labor laws, employee engagement practices, performance management systems, and recruitment processes. By conducting an audit, organizations can identify strengths, weaknesses, and areas for improvement in their HR functions. This process is essential for ensuring that the HR department contributes positively to overall organizational efficiency and effectiveness, and it can inform strategic planning and decision-making related to workforce management. The other options presented do not accurately capture the overarching goals of an HR audit. While hiring new employees, reducing staff numbers, or streamlining payroll processing might be operational tasks or objectives of the HR department, they do not embody the comprehensive evaluative nature of an HR audit, which is focused on assessment and improvement rather than specific personnel decisions or procedural efficiencies.