Human Resource Management

WHY?

Human Resources (HR) management plays a key role in the effective governance of hiring, employee management, and compliance with labor laws. Strong controls prevent unauthorized changes, ensure accurate payroll processing, and maintain the integrity of employee records, reducing risks related to fraud, errors, and non-compliance.

HOW?

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1. Segregation of Duties

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[1-1] Responsibilities for recruiting, onboarding, and salary changes are separated from payroll processing and general ledger functions.
[1-2] Personnel responsible for hiring decisions are independent of those who handle payroll preparation and distribution.
[1-3] Supervision of HR processes, such as hiring, termination, and timekeeping, is distinct from the payroll department to prevent conflicts of interest.

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2. Authorization Controls

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[2-1] Written authorizations are required for all hiring, terminations, salary adjustments, and employee benefit changes.
[2-2] Management reviews and approves all new employee hires, promotions, and compensation changes.
[2-3] Access to sensitive HR records is restricted and regularly reviewed.

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3. Personnel Record Controls

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[3-1] Employee records, including background checks, wage data, and withholding information, are maintained securely and are accessible only to authorized personnel.
[3-2] Changes in employment status (e.g., additions, terminations, salary adjustments) are communicated promptly to the payroll department.
[3-3] A formal process is in place for reviewing and approving employee benefits such as vacation and sick leave accruals.

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4. Procedural Controls

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[4-1] Detailed employment records, including job descriptions and promotions, are documented and maintained.
[4-2] Timekeeping procedures, such as attendance sheets and supervisory approval, are in place and adequately monitored.
[4-3] Timekeeping procedures, such as attendance sheets and supervisory approval, are in place and adequately monitored.

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Q&A

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Q1: Why is segregating duties in HR important?

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Q2: What is the importance of maintaining up-to-date employee records?

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Q3: What are the risks associated with weak HR controls?

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Q4: How can technology help in HR management?

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