Human Resource Accounting

Employee turnover has been a major issue especially for Human resource manager.
Previously, several researchers identified the factors influencing employee turnover.
However, measuring turnover cost can help a manger better to respond to this
challenging issue. The purpose of this paper is to calculate the turnover cost of
Probationary Officer (PO)/Management Trainee Officer (MTO) and impacts in
banking sector of Bangladesh. Primary data were collected through a questionnaire
survey to reveal the result. It was found that except few banks turnover costs of other
banks are more than 10% of their total recruitment, selection and training cost, which
is upsetting. For identifying turnover impacts, hypotheses were constructed and tested
using t-test. The findings of this paper will help the human resource manager get better
insights about the magnitude of turnover cost and develop employee retention
strategies in accordance with.

Human Resource is the most critical, very significant assets in any business organizations but it is not incorporated in the statement of financial position. The study examined the factors that have accounted for the exclusion of Human Resources Accounting in the statement of financial position of companies listed on the Ghana Stock Exchange. The paper also ascertained the relationship between human resource Accounting and firms performance. The study used both primary and secondary data. A regression model was used to ascertain the effects of Human Resource Accounting on a firm's performance. The study used secondary data from a published annual financial statement of all the listed companies on the Ghana Stock Exchange on the period of 2015-2018. The findings revealed that, the exclusion of human resources in the statement of financial position is due to these key obstacles such as: there is no proper clear-cut and specific guidelines for measuring costs and value of human resources; the period of existence of Human Resource is uncertain; there is no universally accepted method of valuation of human resources; no active market for human resource and the financial position of the business may be misleading. Despite the difficulties for the inclusion of HR into financial statement, it is worthy to note from the findings that, human resources contributes positively to a firm’s financial growth as evidenced by the positive effect on Return on Equity (ROE). Therefore, the paper recommends that the International Accounting Standard Board (IASB) should consult prime actors and professionals in the accounting field to debate on the arguments against and considerations for human resource inclusion in the Statement of Financial Position

As We Know In The 21st Century All The
Organizations Are Facing Competition. The Service Sector Is
The Major Contributor Throughout The World Economy. In The
Service Sector Employees Play An Important Role. Because Of
The Quality Of Service Depends On The Employees Who Are
Serving That Service. In That Support Objective Of Our Study Is
To Trend In Earnings Of The Organization And Expenditure
Incurred On Employees By The Organization. SBI Is The
Leading Public Sector Bank, So We Have Collected Data From
Annual Reports Of The SBI Bank From The Period Of 2009 To
2019. After Analyzing The Data We Found The Correlation
Between Total Income Of SBI And Expenditure Incurred By SBI
On Their Employees. On The Basis Of This Study, We Conclude
That Employees Play An Important Role In The Organization.
And Organizations Are Just Increasing Expenditure On
Employees In The Same Trend Of The Organization's Income.
The Organization Should Put Employees On The Balance Sheet
As Assets. Organizations Are Still Showing Employees As
Expenditure. In Coming Future, If The Organization Will
Recognize Employees' Contributions That Will Lead To More
Satisfaction In The Employees And This Boost In Satisfaction
Will Improve The Performance Of Employees Due To That The
Overall Performance Of The Organization Will Improve.

Human resource plays the most important role in the growth of an enterprise. Human element is the most important input in any enterprise. The investments directed to raise knowledge ; skills and aptitude of the work force of the organization are the investments in human resource. Human resource accounting is of recent origin. Human resource accounting is an accounting measurement system. The importance and value of human assests were recognized in the early 1990s when there was a major increase in employment in firms in service, technology and other knowledge-based sectors. Human resources, contributed significantly to the building of shareholder value. The critical success factor for any knowledge based company was its highly skilled and intellectual workforce. Human Resource Accounting has not been introduced so far as a system.

Human resources are considered as important assets and are different from the physical assets. Physical assets do not have feelings and emotions, whereas human assets are subjected to various types of feelings and emotions. In the same way, unlike physical assets human assets never get depreciated. Therefore, the valuations of human resources along with other assets are also required in order to find out the total cost of an organization. In 1960s, Rensis Likert along with other social researchers made an attempt to define the concept of human resource accounting (HRA). Human Resource Accounting (HRA) is a new branch of accounting. It is based on the traditional concept that all expenditure of human capital formation is treated as a charge against the revenue of the period as it does not create any physical asset. But now a day this concept has changed and the cost incurred on any asset (as human resources) should be capitalized as it yields benefits measurable in monetary terms.

"Human Resource Accounting" is the branch of different examination thinks about led in the ranges of bookkeeping and money. Human asset is a benefit whose quality gets increased in value over the timeframe gave set, connected and created in the right bearing. Till the later past, associations took couple of endeavors to allocate money related worth to human asset in its accounting skills. Behavioral researchers started endeavors to create fitting system for discovering the estimation of human asset to the association. They were against the traditional accounting skills for its inability to respect the human asset of an association alongside physical assets.

The study investigates the effect of intellectual capital on performance of non-financial firms in Nigeria. A sample of 21 Nigerian non-financial firms listed on Nigerian Stock Exchange for a period of 10 years (from 2007-2016) was selected. The main type of data used in this study is secondary; sourced from the Nigerian stock exchange fact book and internet. This study applied ex post facto research design. The data collected were analysed using Ordinary Least Square Method. The results show that for the Nigerian listed non-financial firms, the explanatory variables-capital employed efficiency, human capital efficiency and structural capital efficiency has positive significant effect on the dependent variable-earnings per share and market to book value (Performance). The study, therefore recommends among others that the organization can achieve sustainable value with investment on intellectual capital and with focusing on intellectual capital; they can move from the economy based on the tangible assets towards economy based on the intangible assets.

This study investigates the practice and impact of Human Resource Accounting (HRA) in the banking industry in Bangladesh.The study forms mainly extensive review of related literature and an analysis of the contents disclosed in corporate annual report along with primary data collected through a questionnaire survey on all commercial banks listed at Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) in Bangladesh. The research has revealed that the level of human resource practice is at very early stage where many organizations hardly focus on the Human Resource Accounting (HRA) practice properly and disclose all the relevant contents in annual report on time. However, the impact of HRA is getting more and more significant to the organization and to the investors as well.

Human Resource Accounting (HRA) was introduced in 1980s, it is the process of identifying, communicating, and measuring data about human resources. It is highly complicated in today's market to find well knowledge, and highly motivated people. But Human Resource is one of the most important operations for any organization or business. Without the human involvement can lose its efficiency in work, and all the areas of business and levels human efficiency is required with machine efficiency. Thus companies have to recognize and appreciate the value of their employees. It is worth and capital investments. The objective of this paper is to study the Human Resources Accounting practices, to identify challenges and issues, and to give suggestions based on the findings of the study.

Small and medium enterprises (SMEs) contribute substantially to the economic development, income generation, poverty reduction, and particularly job creation for both developed and developing economies. However, compared with large firms, SMEs face several challenges related to their performance and competitiveness. The role of human capital (HC) and human resource practices (HR Practices) in enhancing SMEs competitiveness and performance is vital but understudied areas. Therefore, the purpose of this study was to investigate the role of HC development between the relationship of high-performance work systems (HPWS) and export-oriented SMEs performance. Quantitative strategy and cross-sectional survey method was used to collect data from 205 managerial staff through a self-administered structured questionnaire. HPWS had a significant positive impact on export-oriented SMEs performance. The findings of the study provide evidence that HC development plays a mediating role between HPWS and enterprises performance.

The traditional method of accounting explains how employees are a liability for the organisation due to the expenses that are incurred towards the employees beginning from training and development to other employee benefits incurred, through this paper we would differ from this traditional method. We would look at it from a different point of view according to which human resource is an asset since the existence of the organisation is based on the organisation's workforce. Through the subject of Econometrics we take into account the human efficiency and relate it to the productivity and try to give human efficiency a monetary value. The data used for the purpose of empirical study are secondary in nature. The main question that we are trying to answer is whether human resources satisfy the test to be classified as an asset.

In this competitive world, the efficiency of the labour force determines the competency of the organisations, which indicates that human beings are the greatest asset for any firm. This paper attempts to examine the applicability of human resource accounting and to measure the HRV of one of the largest chemical manufacturing company of India. The study conducted for a period of three years, beginning from 2013 to 2015. Lev and Schwartz compensation model was used to calculate the worth of the workforce at a specified discount rate corresponding to the company. Employee's age, remuneration, education, experience, job performance, cost of living, financial condition and the promotion policy of the firm, are the factors which affect the calculation of employee's worth. The result of the study indicates that employee demographics and human resource values are significantly correlated. The research also advocates the need for an efficient model which could facilitate measuring th...

Every company has to be very cautious in selecting their measurement tools, as it will affect substantially the management resources and every department of the company. The concept of economic framework is an innovative way to measure the value of a company. This economic measurement system determines companies’ worth and performance based on their economic situation not according to accounting numbers produced using traditional accounting rules. According to the past studies, economic frameworks set quality standard in measuring performance and it is necessary for company to create value for share- holders. Due to ample of evolution in last decade in the corporate world, managers and investors are seeking for an economic framework which better mirror the value and profitability of their company. Accounting tools which are being used till today are not sufficient and unlikely in facing the challenge arising from efficient capital markets and owners. Value based measurement framework, a new economic dimension is required, which could better reflect the opportunities and downsides. There are number of value based measurement in the economic frame- work, for example Economic Value Added (EVA), Cash Value Added (CVA), Cash Flow Return on Investments (CFROI), Shareholder Value Analysis (SVA) and Market Value Added (MVA). Any of these can be chosen by a company as their economic framework.
Value added is a measure of economic performance of an economic entity which has a fairly long history of application in economics. It has been regarded as the increase in wealth of an economic entity. Thus, it is a particular concept of income measurement. A company creates value for its shareholders when the shareholder return exceeds the required return to equity. The shareholder's wealth is measured by the returns they receive on their investment. Economic Value Added (EVA) was introduced and advocated by Stern Stewart and Co. in 1982. This study intended to identify why EVA should be used as financial performance measure over the conventional measures and any added value or added advantage in EVA compare to conventional methods. Today EVA has been able to gain attention of the corporate giants like Coca-Cola, TATA, Reliance etc. as it is able to depict the true profitability of the company, however, there have been very little research conducted on EVA in Asian countries including India.

The study investigates the effect of intellectual capital on performance of non-financial firms in Nigeria. A sample of 21 Nigerian non-financial firms listed on Nigerian Stock Exchange for a period of 10 years (from 2007-2016) was selected. The main type of data used in this study is secondary; sourced from the Nigerian stock exchange fact book and internet. This study applied ex post facto research design. The data collected were analysed using Ordinary Least Square Method. The results show that for the Nigerian listed non-financial firms, the explanatory variables – capital employed efficiency, human capital efficiency and structural capital efficiency has positive significant effect on the dependent variable – earnings per share and market to book value (Performance). The study, therefore recommends among others that the organization can achieve sustainable value with investment on intellectual capital and with focusing on intellectual capital; they can move from the economy bas...

Human resource management has continued to evolve over the years given the rapid technological advancements. Human resource information systems (HRIS) and human resource accounting (HRA) are some of the components of strategic human resource management that have experienced tremendous changes. This study examines the complementary relationship between HRA and HRIS. The study’s findings help to address the existing gap in literature regarding the link between the two. The study utilizes a qualitative descriptive research design in which a sample of 17 participants is included. Data is collected using a structured self-administered questionnaire and analyzed through thematic analysis. The study found that HRIS applications and tools support HRA activities whereas HRA activities ensure HRIS generates complete and accurate information regarding an organization’s human resource. Insights obtained from the study findings can be used to promote better integration of HRA into HRIS tools and...

In this competitive world, the efficiency of the labour force determines the competency of the organisations, which indicates that human beings are the greatest asset for any firm. This paper attempts to examine the applicability of human resource accounting and to measure the HRV of one of the largest chemical manufacturing company of India. The study conducted for a period of three years, beginning from 2013 to 2015. Lev and Schwartz compensation model was used to calculate the worth of the workforce at a specified discount rate corresponding to the company. Employee’s age, remuneration, education, experience, job performance, cost of living, financial condition and the promotion policy of the firm, are the factors which affect the calculation of employee’s worth. The result of the study indicates that employee demographics and human resource values are significantly correlated. The research also advocates the need for an efficient model which could facilitate measuring the intell...

Human Capital Development implies the acquisition of knowledge and intellectual stock through the means of education, for expansion of productivity, efficiency, performance and output. Human Capital Development Theory is applicable at every level of human setting and human organization: individual level, family level, community level, organization level, national level and international level. Therefore the theories can be used in interdisciplinary approach-involving two or more academic disciplines. On account of the importance of Human Capital Development Theory, this article reviewed the theory of Human Capital Development and various models underpinning it; with the aim of highlighting the relevance of Human Capital Theory in Human Resource Development as well as the models of Human Capital Development. The summary of the implication of human capital development theory emphasizes the more, the vitality of it to economic improvement and advancement of individuals and organizations.

THE performance of every enterprise is based in large measure upon the quality of human resources. Capable employees must be secured, trained, and organized into effective interacting groups. Favorable relationships must also be de-veloped with external human resources ...

The paper aims at Assessing Possibilities for Domestication of HRA Practice in Nigeria, we review historical background of HRA and its current practices around the world in order to highlight some important lessons that cloud be learned by Nigeria as benefit or otherwise of HRA practice to the economy. The study utilized purely secondary data in form of journal articles, theses, dissertations and web-based materials. This paper discovered that, the existing accounting practice lack regard to human resource as an asset and that have significantly discouraged the use of any or a combination of measurement technique(s) in quantifying human resource let alone reporting it in Nigeria, it also established that HRA practice will enhance the completeness and quality of financial reporting in Nigeria by providing more information on the real value of companies to investors and other stakeholders for rational decision making. Moreover, the article concludes that, it is possible to domesticate...