Wednesday, 1 January 2014

Human Resources Accounting as “Accounting for People as an Organization Resources”

Govind Prasad

HOWEVER the research in the area of qualification of human resources after 1962 has, now made it possible to assess the current value of a firm’s human organization and of its customer’s goodwill. Professor Flamholtz defines hra as a accounting for people as a organizational resources. It involves measuring the cost incurred by the business firm and other organization to recruits, selection, hire, train, and develops human assist. Prof. Rensislikert one of the leading proponents of hra observes”HRA refers to activity devoted to attaching dollars estimates to the valu of a farms human originations and its costumer goodwill.”

   Introduction: - As back as in 1962 W.A. Paton observed” in Busnice interprises a well organized and legal personal may be a much important ‘assets’ than a stock”. Its term is concert with the personal management, human resourse management, human resourses accounting.
            It is concerned with all categories of personnel from top to the bottom of the organization. The broad classification of personnel industrial enterprises may be as follows--  ……Blue colours workers related to working on machinery, loading, unloading, ……Managerial and non managerial personnel. ……. Professionals such as c.a., c.s., i.c.w.a., lawyers etc and non professionals’ personnel.
·         To explain the concept of HRA.
·         To point out difficulties in the physical valuation of HRA.
·         Utilization of resources.
·         Proper placement.
·         Increases morale and motivation of the employees.
·         Designing training and development programmers.
·         Valuable information to investors.
·         There are no specific and clear cut guideline for cast and value of human resource of an organization.
·         However there are no standard for HRA.
·         There is no suitable or certified method & model for computation of HRA cost and value.
·         HRA may lead to the dehumanization in the organization.
·         The Nature of HR expert.
·         Globalization.
·         Fast Changing in technology & innovations.
·         Limitation of time and resources.
Research Methodology:
The present study being blend of conceptual as well as applied aspects of HRA makes use of both the primary as well as secondary data and information. Necessary staticsally devices are also utilized for the analysis and interpretation of the data. The primary data are to be collected by company surveys administering questionnaires, conducting interviews of the managerial / non-managerial personnel the secondary data are collected by the review of research articles, standard literature on the subject and other published sources.
The company’s annual reports, news letters will also be resorted for the purposes of obtaining various information. Necessary staticsally devices are also utilized for the analysis and interpretation of the data.    
Methods and Models of HRA:-
A.     Present value method
B.     Stochastic process with service reward method.
C.     Morse's model
D.     Jaggi Lave model of HR Valuation.
E.      Scott Myers and Vincent flowers model.
F.      Pekin organ's model of HR valuation.
G.     ABA Lev a Schwartz's compensation model.
H.     Fried Man and Lev's Economic model
I.        Meyers and flowers model
J.       Historical cost approach
K.     Replacement cost approach.
L.      Opportunity cost approach.
Hypothesis is usually considered as the principal instrument in research. Its main function is to suggest new experiments and observations. In fact, many experiments are carried out with the deliberate object of testing hypothesis. Decision-makers often face situations wherein they are interested in testing hypotheses on the basis of available information and then take decisions on the basis of such testing. In social science, where direct knowledge of population parameters is rare, hypothesis testing is the often used strategy for deciding whether a sample data offer such support for a hypothesis that generalization can be made. Thus, hypothesis testing enables us to make probability statements about population parameters.
The researcher had an assumption in his mind that Reliance Industries gives due importance to the human resource management. It was found during study that personnel policies including recruitment, selection, promotion and training and development programmers of RIL are human-oriented. It gave a sense of satisfaction to the researcher.
Operative Sugestions:-
ü  Firstly, proper initiation should be taken by the central government and the professional and the professional bodies like– CA, CS, CWA, CFA, AIMA and many others in India in respect of formulation of specific accounting standards and suitable valuation models on the measurement and reporting of value of human resources.
ü  Secondly, there should be disclosure of valuation of human recourses.
Though, it is not an easy to analyses the suitable item of HRA information
Thirdly there should be discloser of employee costs :(a) information of the salary with break-ups, (b) employee coats for different reasons (c) Manpower, development costs (d) grade wise distribution of employed costs and (e) production hours lost .  
ü  Fourthly there should be discloser of productivity / performance ratios i.e., production per employees in item of quantities and out put values per employees, value added per employee, every age per employee and investment per employee.    
ü  Fifthly, all manpower development programmers like – training and transactional analysis should be highlighted.
ü  Seventhly, information regarding regular communication with employee should also be disclosed
ü  Lastly, since there is no specific discloser pattern of HR value Reliance can adopted the following format which seems to be suitable for meeting the requirement is presented.
It is hoped that the present study would motivate further researches in this mammoth area. The recherchés would be amply awarded If due consideration is given to his finding and subsequent suggestions.
The human resources are assuming increasing significance in modern organization. There cost and values you have an important role for growth & development a firm and take decision make policies. HRA is essential for any business institution todays business age. The present study will be an important study both from academic and professional point of views as if examines very significant modern aspect of HRM. The results obtained from the study can be applied to the other organization interested in the development of HR and adoption of HRA practices the researcher hopes at present study will be a unique study and gets welcome response from academician, management researchers, proffesionals and practicing manager  in corporate world.  It is hoped that it will motivate further studies in this field.
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Govind Prasad
Research Scholer, Department. Of Commerce,
C.C.S. University Meerut, U.P. India.