Human resource accounting (HRA) measures the cost and economic value of employees and managers in an organization. It calculates recruitment, training, and development costs, as well as the current value of human resources. This information is presented in an HRA report to management, employees, and investors. HRA provides useful information for manpower planning, personnel policies, resource utilization, job placement, and training programs. However, HRA has limitations since employee values are based on assumptions about retention, and there are no uniform valuation standards. In India, HRA is not compulsory and few companies implement it, though some like Infosys and BPL issue HRA reports.
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Human resource accounting (HRA) measures the cost and economic value of employees and managers in an organization. It calculates recruitment, training, and development costs, as well as the current value of human resources. This information is presented in an HRA report to management, employees, and investors. HRA provides useful information for manpower planning, personnel policies, resource utilization, job placement, and training programs. However, HRA has limitations since employee values are based on assumptions about retention, and there are no uniform valuation standards. In India, HRA is not compulsory and few companies implement it, though some like Infosys and BPL issue HRA reports.
Human resource accounting (HRA) measures the cost and economic value of employees and managers in an organization. It calculates recruitment, training, and development costs, as well as the current value of human resources. This information is presented in an HRA report to management, employees, and investors. HRA provides useful information for manpower planning, personnel policies, resource utilization, job placement, and training programs. However, HRA has limitations since employee values are based on assumptions about retention, and there are no uniform valuation standards. In India, HRA is not compulsory and few companies implement it, though some like Infosys and BPL issue HRA reports.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
Human resource accounting (HRA) measures the cost and economic value of employees and managers in an organization. It calculates recruitment, training, and development costs, as well as the current value of human resources. This information is presented in an HRA report to management, employees, and investors. HRA provides useful information for manpower planning, personnel policies, resource utilization, job placement, and training programs. However, HRA has limitations since employee values are based on assumptions about retention, and there are no uniform valuation standards. In India, HRA is not compulsory and few companies implement it, though some like Infosys and BPL issue HRA reports.
Copyright:
Attribution Non-Commercial (BY-NC)
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Download as DOCX, PDF, TXT or read online from Scribd
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Human
Resource Accounting HRA - Meaning
Human Resource Accounting (HRA) means to measure the cost and value of the people (i.e. of employees and managers) in the organisation. It measures the cost incurred to recruit, hire, train and develop employees and managers. HRA also finds out the present economic value of its employees and managers. After measuring the cost and value of its employees and managers, the organisation prepares a report. This report is called HRA Report. It is shown to the top level management. It can also be shown to the employees, managers and outside investors.
Advantages of HRA Benefits, objectives, advantages of human resource accounting HRA:-
1. Information for manpower planning
HRA provides useful information about the cost and value of human resources. It shows the strengths and weakness of the human resources. All this information helps the managers in planning and making the right decisions about human resources. Thus HRA provides useful information for Manpower Planning and Decision Making.
2. Information for making personnel policies
HRA provides useful information for making suitable personnel policies about promotion, favourable working environment, job satisfaction of employees, etc.
3. Utilisation of human resources
HRA helps the organisation to make the best utilisation of human resources.
4. Proper placements HRA helps the organisation to place the right man in the right post depending on his skills and abilities.
5. Increases morale and motivation
HRA shows that the organisation cares about the employees and their welfare. This increases their morale and it motivates them to work hard and achieve the objectives of the organisation.
6. Attracts best human resources
Only reputed organisations conduct HRA. So, competent and capable people want to join these organisations. Therefore, HRA attracts the best employees and managers to the organisation.
7. Designing training and development programmes
HRA helps the organisation to design (make) a suitable training and development programme for its employees and managers.
8. Valuable information to investors
HRA provides valuable information to present and future investors. They can use this information to select the best company for investing their money.
Limitations of HRA Criticism, disadvantages, limitations of human resource accounting HRA:The valuation of human assets is based on the assumption that the employees are going to remain with the organisation for a specified period. However, this assumption is wrong because employee mobility is very high. The human resource accounting may lead to the dehumanisation in the organisation. If the valuation is not done correctly or the results of the valuation are not used properly. In the case of financial accounting, there are certain specified accounting standards which every organisation must follow. However, there are no standards for HRA. Each organisation has its own standards for HRA. So, there are no uniform standards for HRA. Therefore, the HRA of two organisations cannot be compared. There are no specific and clear cut guidelines for 'cost' and 'value' of human resources of an organisation. The present valuation systems have many limitations. The life of a human being is uncertain. So its value is also uncertain.
Position of HRA in India
In India, very few companies use HRA. HRA is not compulsory in India.Infosys Technologies and BPL are the leading companies in India, which use HRA. HRA reports give useful information to the company management, employees and investors.
