Human Resource Accounting- Tool for measuring Human resource value

The past few decades have witnessed a global changeover from manufacturing toservice based economies. The fundamental difference between the two lies in the verynature of their assets. In the former, the physical assets homogeneous plant, machinery, materialetc. are of utmost importance. In contrast, in the latter, knowledge and attitudes of theemployees assume greater significance. For instance, in the fictional character of an IT firm, thevalue of its physical assets is negligible when compared with the value of theknowledge and skills of its personnel. Similarly, in hospitals, pedantic institutions,consulting firms etc., the thorough deserving of the organisation depends mainly on the skillsof its employees and the go they render. Hence, the supremacy of theseorganizations is contingent on the quality of their mankind imaging- its knowledge,skills, competence, indigence and ground of the organisational culture. Inknowledge ?driven economies therefore, it is imperative that the graciouss be recognisedas an integral break of the total charge of an organisation. However, in parliamentary procedure to estimateand foresee the worth of the sympathetic capital, it is necessary that some method ofquantifying the worth of the knowledge, motivation, skills, and function of thehuman element as well as that of the organisational processes, like recruitment,selection, learn etc., which are used to build and support these human aspects, isdeveloped. homophile resource accounting (HRA) denotes just this process ofquantification/ amount of the piece Resource. 2 4Intellectual CapitalAccounting 18.2 WHAT IS HRA?

The American Accounting Association?s comm! issioning on Human Resource Accounting(1973) has defined Human Resource Accounting as ?the process of identifying andmeasuring data close to human resources and communicating this information tointerested parties?. HRA, thus, not only involves mensuration of each the costs/investments associated with the recruitment, placement, training and development ofemployees, but withal the quantification of the stinting value of the people in anorganisation. Flamholtz (1971) too has offered a equal definition for HRA. They define... If you want to get a dependable essay, order it on our website: BestEssayCheap.com

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