SOP: Hosteeva Armenia HR Audit

SOP Hosteeva Armenia HR Audit

Purpose

The purpose of this Standard Operating Procedure (SOP) is to provide guidelines for conducting HR audits at Hosteeva Armenia. This SOP ensures adherence to Armenian labor laws, accuracy in employee records, and identifies opportunities for enhancing HR practices.

Scope

This SOP applies to all HR functions at Hosteeva Armenia, specifically focusing on the audit of employee personal files, contracts, personal documents and copies, salary amendments, vacation records, and other relevant documentation.

Policy Statement

Hosteeva Armenia is committed to conducting regular HR audits to uphold compliance with Armenian labor laws, maintain the accuracy of employee records, and foster best HR practices for organizational efficiency.

 Procedures

A. Planning the HR Audit

1. Audit Frequency and Timing:

Conduct HR audits semi-annually, specifically during the first and third weeks of February and August, to ensure comprehensive coverage of HR operations.

2. Audit Team & Structure:

• The HR Director leads the audit process, assisted by the HR & Administrative Assistant.
• The HR team needs to be assigned specific responsibilities through Trello to ensure thorough document review and compliance checks and well a control of the process.

B. Conducting HR Audit (Compliance with RA regulations)

1. Document Review:

• Verify that each employee personnel file is complete and contains legally required documents, as well as any individual-specific documents created during the time of employment with Hosteeva.
• Ensure compliance with Armenian labor laws and internal HR policies regarding document maintenance.
• If discrepancies are revealed, ensure immediate communication with HR manager and together with team lead (if necessary) arrange the communication with employee and assure document signature.

1.1 Check if there are photocopies of legally required documents for employment (Article 89, Armenian Labor Code):

• Proof of identity (Passport, ID).
• Social security card or certificate of not having a social security card or public service number or certificate of not having a public service number, except if the employee is a foreign citizen without residence status in the Republic of Armenia and is not physically present in Armenia.
• Certificate of education or necessary qualifications, if the job requires specific education or professional training.
• Health status certificate if the employment contract is for jobs requiring initial and periodic medical examinations.
• Employment Contract.

1.2 Ensure the employment contract includes necessary clauses and verify that these clauses are correct, updated, and supported by appropriate documentation:

• The date, month, year, and place of contract conclusion.
• Employee’s full name.
• Employer’s name or, if an individual, the employer’s full name.
• Workplace.
• The structural or separate subdivision or office of the employer where the employee will work.
• The start date of employment.
• The job title and/or job functions or reference to the document outlining job functions.
• The base salary amount (including taxes and other mandatory payments) and the method of determining it (hourly, daily, piece-rate, or monthly).
• Supplements, surcharges, and additional payments as prescribed.
• The duration of the individual legal act or employment contract (if necessary).
• The probation period duration and conditions, if applicable.
• The work schedule (normal, part-time, reduced, or cumulative working hours) and weekly duration (except for cumulative working hours).
• The type and duration of annual leave (minimum, additional, extended).
• The position, full name, and surname of the person signing the individual legal act or employment contract.
• Methods for notifying each other about employment relations.

1.3 Ensure all documents indicate that the employee has received their copy and agrees with its content.

1.4 Verify the presence of documents showing that the employee has passed probation, performance assessment, and KPI documents, specifically the templates and targets for KPI calculations during each evaluation period.

1.5 Cross-check HR documents with accounting records for synchronization and accuracy.[LT1] 

ü  Request Information from Accounting:

o    Vacations: Get vacation records.

o    Final Calculations: Obtain salary and compensation details.

o    Contract Dates: Request contract starting dates.

ü  Review HR Documents:

o    Match HR vacation records with accounting data.

o    Verify HR salary and compensation records against accounting calculations.

o    Confirm contract start dates with accounting records.

ü  Identify and Address Discrepancies:

o    Note any inconsistencies.

o    Investigate and correct errors.

ü  Document and Follow-Up:

o    Record results and actions taken.

o    Update procedures and schedule regular reviews.

C. Audit Findings Compilation and Reporting

1. Audit Findings Compilation:

• Use an audit checklist for thorough verification, attaching it to each personal file to indicate the file has been audited and the date of the audit.
• The HR Director compiles audit findings highlighting compliance gaps, inaccuracies, and improvement opportunities.
• Provide specific examples and recommendations for each identified issue.

Annual Review:

Once a year, during the first week of March, the HR Manager, together with the General Manager (GM) and Operations Director, will review all HR policies and procedures to determine if updates are necessary or if new policies should be written.

2. Audit Report Preparation:

• The HR Manager prepares a detailed audit report that includes:
  • Findings: Summarize strengths and areas needing improvement.
  • Recommendations: Suggest enhancements to HR practices to ensure compliance and efficiency.
• Present the audit report to the GM and Operations Director for review and approval.
• Discuss findings, recommendations, and proposed action plans to address identified issues.

3. Implementation of Recommendations:

Action Plan Development and Implementation

     3.1.Develop an Action Plan:

• Timeline: Within 2 weeks after the review meeting.
• Task: Create a detailed action plan outlining the approved recommendations and steps for implementation.

    3.2.Assign Responsibilities and Timelines:

    3.3.Timeline: Within 1 week after the action plan is developed.

    3.4.Task: Assign specific tasks to relevant team members or departments, and set clear deadlines for each task.

    3.5.Implement Solutions:

    3.6.Timeline: Begin implementation within 1 week after responsibilities are assigned.

    3.7.Task: Execute the action plan according to the assigned responsibilities and deadlines.

    3.8.Monitor Progress and Effectiveness

   3.9.Timeline: Review progress weekly for the first month and then monthly thereafter.

    3.10. Task: Track the progress of implementation, assess the effectiveness of the solutions, and make adjustments as needed.

4. Roles and Responsibilities

• HR Director: Leads the HR audit process, develops audit plans, ensures compliance with Armenian labor laws, and compiles audit findings for review by senior management.
• HR Assistant: Assists in document preparation and supports audit activities.
• General Manager (GM) and Operations Director: Review audit findings, provide strategic guidance, and approve action plans for implementation.
• Department Managers: Provide input during audits, support implementation of recommendations, and ensure compliance within their respective departments.