Among the many changes that face internal audit, the growing diversity of its employees is a big one. A new report from the Institute of Internal Auditors Foundation makes clear that successfully blending audit team members of different experiences, ages, genders, and cultures requires out-of-the-box thinking.
“Bringing these teams together and motivating them takes a willingness to learn, adapt, and try new things that might even be out of our comfort zones,” the report states.
Good teamwork is a goal in and of itself, of course, but it also adds value to the organization.
Based on responses from 14,518 professionals – 26 percent chief audit executives (CAEs), 13 percent directors, 17 percent managers, and 44 percent staff – in 166 countries, the report offers motivational strategies in five management categories: setting goals, talent retention, equipping employees, performance assessment, and treating success.
Here’s a snapshot of the recommendations.
1.Goal setting. Aligning auditors’ goals with those of the department and organizational strategies helps meet corporate objectives. A formal analysis of organizational strategy is required. Goals and auditors’ capability have to match, of course, and they should be allowed to build the necessary skills.
2. Talent retention. As the business and internal audit changes, talent must be identified. That means different generations will need different motivation tactics. A well-known but little-used management tactic is rotation of employees through the internal audit department. Respondents indicated that most (66 percent) companies don’t use rotation. Of those that do, 12 percent make it a formal process.
NG Shankar, senior president of corporate audit for the Aditya Birla Group, said in the report that the organization has seen the following benefits related to its rotation program.
- Enhances the value of internal audit by drawing practical insights from business experts into complex audits, and enhances internal audit’s credibility when technically strong outputs are delivered.
- Improves the intellectual capital and expertise of the internal audit department.
- Helps business experts boost their understanding of corporate governance, risk management, and internal audit.
- Draws fresh talent into the internal audit department and potentially helps to replenish the talent pool for the business as a whole in the longer term.
- Helps to attract and retain key employees.
3.Equipping employees. Internal audit delivers value when the capability and capacity of each employee and the entire team are addressed. That requires workforce and professional development plans. As with employee retention, the tactics and message of the CAE need to be tailored according to generational differences. Flexibility is key. Baby boomers, for example, prefer a traditional classroom style, while Generation X (between boomers and millennials) likes self-direction and self-pacing, but millennials want to merge technology and media, as in webinars.
4.Performance assessment. For internal audit to give its utmost, each employee has to be evaluated compared to the department’s overall performance. Use a balanced scorecard report, or similar dashboard, and provide constant learning and feedback. Tactics can include:
- Feedback after every engagement.
- Career mapping.
- “360-degree profiling” (feedback from managers, peers, and subordinates).
- “Fireside chats” that focus on professional development in brief confabs of maybe 15 minutes.
- Annual skip-level interviews during which the CAE meets with indirect reports.
- Assigning coaches and mentors for auditors.
- Evaluating auditors’ personality type.
5.Treating success. Everyone likes a carrot, so provide recognition and incentives to increase productivity. In other words, you get more when you give more. Develop an employee engagement model and a rewards system that doesn’t involve the paycheck. So-called intrinsic rewards can include giving an auditor a pat on the back in front of everyone (ditto for teams), mentoring and coaching, flexible work scheduling, and training support.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.