by Andy Hofmann
While performing a recent audit of a professional service organization, I was reminded of an important truism of auditing: uniqueness. No matter how many management systems one reads and assesses, there is always another way to approach any particular requirement. In this most recent case, it was employee competence, training, and awareness.
The employee competence, training, and awareness requirement of any management system standard is an important audit target. Many registrars expect their auditors to assess this requirement at every audit. There are two main reasons for this:
- Satisfying the requirement speaks to how well-prepared associates are for their defined responsibilities.
- Investment in training is a strong indicator that appropriate resources are being provided to facilitate the achievement of goals and targets.
Before discussing my recent audit, perhaps a word on what an auditor normally sees when auditing competence, training, and awareness. The following are common responses to the requirements in ISO 9001:2008 and ISO 14001:2004:
- Job descriptions. A description of what each position in the organizations does, the job description forms the basis of both responsibility and level in an organization. Potential new hires selected for interviews will have the education, training, and experience most closely aligned with the requirements in the job description.
- Organization chart. Charts illustrate the way that the positions detailed in the job descriptions are structured. In very structured organizations, the level from the top is associated with remuneration and functional accountability. Some organization charts also depict associate responsibility through dotted line connections or committee membership.
- Objectives and targets. The organization establishes company-wide objectives and targets, but they are fine-tuned based on responsibility and function. The manner in which this is done and the accuracy with which assignments are made will have a significant effect on the plan’s success.
- Training plan. Not all personnel satisfy all their positions’ requirements. Training is required to bridge the gap. Mandatory training can frequently cover satisfy regulations, such as transportation of dangerous goods. These qualifications typically also have a periodic recertification requirement. This too is normally captured in the annual training plan.
During a recent audit, I was reminded by a professional services organization that there are alternate ways of considering the competence, training, and awareness requirement. The client was seeking simultaneous registration to ISO 9001 and ISO 14001 and provides engineering services to clients building new manufacturing locations. The organization’s process inputs are concepts, engineering skill, and time; its outputs are drawings, technical requirements, and instructions. A large percentage of the output is delivered to customers electronically.
Here are some additional characteristics found by the audit team:
- The organization has a defined structure. Functionally, personnel report to their particular discipline managers. Mechanical engineers report to head mechanical engineers, electrical to electrical, and so on. The discipline heads report to the vice president of engineering.
- Sales is made up of cross-functional personnel assigned to the quoting leader. The quote leaders report to the vice president of sales. Should a project be approved, the quote leader becomes the project manager. Team members who contributed to the quote will be the core of the project team. Project managers report through the vice president of operations.
- Support functions such as quality, environment, health and safety, finance, information technology, and human resources report to the vice president of finance and risk. All vice presidents report to the president and CEO. Meetings are held at least weekly to review quotes, project status, customer and external audits, regulatory issues, and internal reviews.
The audit team determined the above details from the organization chart and interviews. The organization didn’t have a written procedure to describe how personnel are interviewed, hired, trained, transferred, re-trained, promoted, or dismissed. The only written material that the audit team could locate was the employee handbook.
The auditor reviewed the minutes from weekly meetings spanning back two years. Customer satisfaction had started out very high; there were many positive comments concerning attention to detail and first-time-right drawing sets. These comments were two years old, at time when there were 20 or 30 people in the organization. At the time of the external audit, there were more than 100.
Recent customer feedback showed some dissatisfaction with the accuracy of the drawing sets. Corresponding to this were data that showed increased internal rework of drawings. In the past six months, the organization had been awarded three large jobs that had doubled its revenue. There had been an increase in staff from 60 to 100 during this same period.
The director of human resources told the auditor the following:
- Position descriptions had been created over the past six months because it became necessary to post open positions through an online listing agency.
- An employee handbook had been assembled during the same period to assist with the influx of personnel. The director of human resources had put this together from information provided by the president and CEO, who was also the owner. The director of human resources had been there for seven months.
- The average time sheet for the engineering staff showed that most were working more than 50 hours each week.
- The length of time to produce a quote had increased over the last year from six days to 19 days. Of the past ten projects quoted, two had been lost due to late quote submission.
- For the first time in its history, the organization had received project fines. These were levied by customers who had equipment, material, and personnel assembled according to the project plan but had not received the approved drawings.
The lead auditor could see that growth was straining the performance of the organization at a critical time. There were many audit trails open to pursue, but after seeing the number of new employees, the lead auditor selected the process of qualifying personnel. She decided to review the applicable ISO 9001 and ISO 14001 clauses.
ISO 9001:2008 clause 6.2.2 has the following requirement: “The organization shall:
a) determine the necessary competence for personnel performing work affecting conformity to product requirements,
b) where applicable, provide training or take other actions to achieve the necessary competence,
c) evaluate the effectiveness of the actions taken,
d) ensure that its personnel are aware of the relevance and importance of their activities and how they contribute to the achievement of the quality objectives, and
e) maintain appropriate records of education, training, skills and experience (see 4.2.4).”
The auditor could see that ISO 9001 does not require a procedure to address competence, training, and awareness. She could also see the following significant requirements:
- Competency and product conformity. The standard requires organizations to determine what makes personnel competent to prepare outputs affecting product conformity. The auditor could see from the organization chart that these positions would include all sales personnel and project engineers.
- The final requirement of the clause requires records to demonstrate the components of competency: education, training, skills, and experience. Those positions affecting product conformity must have records declaring the incumbents competent to prepare their outputs.
Clause 4.4.2 of ISO 14001:2004 reads: “The organization shall ensure that any person(s) performing tasks for it or on its behalf that have the potential to cause a significant environmental impact(s) identified by the organization is (are) competent on the basis of appropriate education, training or experience, and shall retain associated records. The organization shall identify training needs associated with its environmental aspects and its environmental management system. It shall provide training or take other action to meet these needs, and shall retain associated records.”
The auditor had to understand what the organization’s significant environmental impacts were. Looking at the proposed scope of its ISO 14001 system, the auditor was reminded that the organization itself did not affect the environment significantly. Rather, the organization sought registration for managing the significant environmental impacts of the projects it was assigned to complete. With that as a scope, the training clause in ISO 14001 took on an interesting meaning: The environmental aspects would be project-specific. Thus, the portion of the competency clause that would be interesting would be how the organization was going to identify the training needs associated with project-specific environmental aspects. Furthermore, what kind of training or other action would the organization take to meet its needs?
Combining what was discovered about ISO 9001 employee competence, training, and awareness processes with that for ISO 14001, the auditor needed more information from the organization. She decided to go back to the director of human resources and the vice president of engineering and find out more about how training was managed. In a conversation with the vice president of engineering, she gleaned the following information:
- All position descriptions required that incumbents provide evidence of formal university-level education in the environmental sciences.
- The vice president of engineering had created an online study module that all new engineers had to complete during their first two weeks on the job. The module provided a way of cataloging and rating project-specific environmental aspects. It tracked who had completed the training and who had not. Those who had not completed the training had their incentive pay withheld.
- The vice president of engineering had also created several modules that trained new engineers in the use of the project management software. This software identified each project task, its status, the time being spent on it, and its deliverables. It also had a checking function so that an engineer was not reviewing his or her own work.
- The online training software kept track of who had logged in, how long they remained on the system, and their success rate in challenging the quizzes incorporated into every module. The director of human resources received weekly e-mails from the system reporting on activity.
During her conversation with the director of human resources, the auditor determined the following:
- Of the 40 people who had been hired in the last six months, only 12 had completed the mandatory online training for new hires. However, 32 had been eligible for their incentive pay increase and had received it.
- None of the new hires over the past six months had completed the modules on the use of the environmental aspect determination tool.
- The system had been generating the appropriate reminders to management concerning the status of the training. The only action that had been taken was two weeks prior when the vice president of engineering had disabled the e-mail reminder function.
The auditor could see the correlation between business results and the adherence to the systems’ competence, training, and awareness requirements. Specifically, the system had worked two years ago in creating competent personnel that built the business’ reputation. Challenges with drawing accuracy and timely delivery had only begun six months ago, when the training system had been circumvented to accommodate the rapid hire of new personnel. Although the auditor did not know if an alternative qualification protocol had been adopted, she did know the training system was not being followed. In fact, the most useful portion of the tool, the e-mail reminder, had been disabled.
The auditor could now go to management with a compelling observation: The organization’s existing training system was workable provided it was followed. There were not enough resources to ensure all new personnel completed their required training when the company was rapidly hiring people. As a consequence, delivery and accuracy of drawing sets had been negatively affected.
The auditor also identified another more subtle area for improvement: New personnel were not competent in the use of the aspect determination tool. As a result, environmental aspects lists completed by these personnel were not as complete or accurate as in the past. Compounding this was the real possibility that the review of such a project could also be accomplished by a new hire. In fact, the auditor was able to determine that this had happened twice.
Although this organization’s response to ISO 9001 and ISO 14001’s requirements was not standard, our example permitted us to follow an audit trail through. The employee competence, training, and awareness process was found to be inconsistent, negatively affecting the performance of the organization and its risks. By raising these issues, the auditor assists the organization in more fully appreciating the strategic value of employee competence, training, and awareness.
About the author
Andy Hofmann has been involved with management systems for more than 30 years. He has audited more than 2,500 systems, giving him a unique opportunity view of organizations that are performing well and those that struggle. A regular contributor to American Society for Quality management systems conferences and publications, Hofmann’s intellectual property has received wide acceptance. Currently the president of ICS Certification Services, Hofmann continues to work with management systems professionals throughout North America. He has an MBA from the University of Toronto and is a Certified Engineering Technologist.