HRA is the systematic process of identifying, measuring & communicating data about human resources.
According to Flamhoitz HRA involves measuring the costs incurred by business firms & other organizations to recruit, select, hire, train & develop human assets.
HRA therefore, shows how the organization makes investment in its people & how the value of the people change over time. Value of the employees increases by training (the core HRD activity ) & experience over a time period.
With the help of HRIS (personal profile, career profile, benefits profile ) organizations collect basic information while doing HRA.
Personal profile – name, age, gender, address, phone number, service date.
Career profile – education, training, certificate, license, degrees, skills, hobbies, requisite training etc.
Benefits profile – insurance coverage, disability provisions, pension, profit sharing, vacation, holidays, sick leave etc.
HRIS consists of
Number of employees
Categories
Grades
Total value of HRs
Value per employee
Number of employees acquired during the year
Cost of acquisition
Levels for which they were acquired
HR development
HR maintenance
Cost related to HR maintenance
HR separation
Cost related to HR separation
Detail of benefits provided to the employee
Methods of evaluation can be non-monetary & monetary
Non- monetary measures – It involves the classification of human resources in terms of skills, performance evaluation, potentiality for development & promotion, attitude surveys & subjective values
Skill is coordinated series of actions to attain some goal. Skills are defined widely as overt responses & controlled stimulation.
Overt responses may either be verbal, motor or perceptual.
Verbal responses typically stress on speaking.
Motor responses stress on movements of limbs & body.
Perceptual responses stress on understanding of sensory responses.
Controlled stimulation are energy inputs to the workers which we express in units of frequency, length, time & weight.
Monetary measures are
Capitalization of historical costs method
Replacement cost method
Opportunity cost method
Economic value method
Present value method
Historical cost method was developed by Likert.
It capitalizes all costs of recruitment, hiring, training & other initial costs involved in the development of HRs.
The amount which is capitalized is written off over the period of an employee remains with the organization.
If he leaves before the expected service period, the amount remaining as an asset is written off in the year of leaving.
Replacement cost method measures the cost to replace an organization’s existing human resources.
It indicates what it would cost the concern to recruit, hire, train & develop human resources to match the present level of efficiency.
Under opportunity cost method, the value of HRs is determined on the basis of the value of an individual employee in an alternative use.
If an employee can be hired externally, there is no opportunity cost for him.
Cheap Rate ➥8448380779 ▻Call Girls In Sector 29 Gurgaon
HUMAN RESOURCE ACCOUNTING.pptx
1.
2. HRA is the systematic process of identifying,
measuring & communicating data about human
resources.
According to Flamhoitz HRA involves measuring
the costs incurred by business firms & other
organizations to recruit, select, hire, train &
develop human assets.
HRA therefore, shows how the organization
makes investment in its people & how the value
of the people change over time. Value of the
employees increases by training (the core HRD
activity ) & experience over a time period.
3. With the help of HRIS (personal profile, career
profile, benefits profile ) organizations collect
basic information while doing HRA.
Personal profile – name, age, gender, address,
phone number, service date.
Career profile – education, training, certificate,
license, degrees, skills, hobbies, requisite
training etc.
Benefits profile – insurance coverage, disability
provisions, pension, profit sharing, vacation,
holidays, sick leave etc.
.
4. Number of employees
Categories
Grades
Total value of HRs
Value per employee
Number of employees acquired during the year
Cost of acquisition
Levels for which they were acquired
HR development
HR maintenance
Cost related to HR maintenance
HR separation
Cost related to HR separation
Detail of benefits provided to the employee
5. Non- monetary measures – It involves the classification of
human resources in terms of skills, performance
evaluation, potentiality for development & promotion,
attitude surveys & subjective values
Skill is coordinated series of actions to attain some goal.
Skills are defined widely as overt responses & controlled
stimulation.
Overt responses may either be verbal, motor or
perceptual.
Verbal responses typically stress on speaking.
Motor responses stress on movements of limbs & body.
Perceptual responses stress on understanding of sensory
responses.
Controlled stimulations are energy inputs to the workers
which we express in units of frequency, length, time &
weight.
6. Capitalization of historical costs method
Replacement cost method
Opportunity cost method
Economic value method
Present value method
7. This method was developed by Likert.
It capitalizes all costs of recruitment, hiring,
training & other initial costs involved in the
development of HRs.
The amount which is capitalized is written off
over the period of an employee remains with
the organization.
If he leaves before the expected service
period, the amount remaining as an asset is
written off in the year of leaving.
8. It measures the cost to replace an
organization’s existing human resources.
It indicates what it would cost the concern to
recruit, hire, train & develop human resources
to match the present level of efficiency.
9. Under this method, the value of HRs is
determined on the basis of the value of an
individual employee in an alternative use.
If an employee can be hired externally, there
is no opportunity cost for him.
10. Under this method HRs are valued on the
basis of the contribution they are likely to
make to the organization during the period of
their employment.
The remuneration to be paid to an employee
is estimated & discounted appropriately to
arrive at the current estimated value.
11. This method measures HRs by attributing an
employee’s value to the organization as an
equivalent to the present value of his
remaining earnings.
Organizations like, ONGC, BHEL,ACC etc.
have already adopted this concept.
