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
 Introduction
 Objectives of HRA
 Importance of HRA
 Limitations
 Cost of Human Resources
 Measurements in HRA
 C...

 Process of identifying and measuring data about
human resources and communicating this
information to interested parti...

1. Valuation of human resources
2. Recording the valuation in the books of account
3. Disclosure of the information in t...

 Improve management by analyzing investment in
HR
 Consider people as its asset
 Attract and retain qualified people
...

 Furnishes cost/value information for making management decisions about
acquiring, allocating, developing, and maintain...

 Management tool designed to assist senior management in
understanding the long term cost and benefit implications of
t...

 No specific procedure for finding cost and value of
human resources of an organization
 Form and manner of including ...
Cost of
Human
Resources
Acquisition cost
-Recruitment Cost
-Selection Cost
-Placement Cost
-Campus Interview Cost
Training...

Measurements in HRA
•Historical Cost
•Replacement Cost
•Opportunity Cost
•Standard Cost
Cost based approaches:
•The Lev ...

Cost
It is a sacrifice incurred to obtain some anticipated
benefit or service
Two portions :
Expense
Asset
COST APPROACH

 Historical cost
Sacrifice that was made to acquire and develop the
resource
 Opportunity cost
Money to be spent on HR...
Hr accounting ppt
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Hr accounting ppt

amity global business (bangalore)

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Hr accounting ppt

  1. 1.   Introduction  Objectives of HRA  Importance of HRA  Limitations  Cost of Human Resources  Measurements in HRA  Cost Approach Contents
  2. 2.   Process of identifying and measuring data about human resources and communicating this information to interested parties  Quantification of the economic value of the people in an organization  Measurement and reporting of the cost and value of people in organizational resources : Flamholtz  Art of valuing, recording and presenting systematically the worth of human resources in the books of account of an organization Introduction
  3. 3.  1. Valuation of human resources 2. Recording the valuation in the books of account 3. Disclosure of the information in the financial statements of the business Contd…
  4. 4.   Improve management by analyzing investment in HR  Consider people as its asset  Attract and retain qualified people  Profile the organization in financial terms  To have an analysis of the human asset  To aid in the development of management principles, and proper decision making for the future Objectives
  5. 5.   Furnishes cost/value information for making management decisions about acquiring, allocating, developing, and maintaining human resources in order to attain cost-effectiveness  Helps the management in the employment, locating and utilization of human resources  Helps in deciding the transfers, promotion, training and retrenchment of human resources  Assists in evaluating the expenditure incurred for imparting further education and training in employees in terms of the benefits derived by the firm Importance of HRA
  6. 6.   Management tool designed to assist senior management in understanding the long term cost and benefit implications of their HR decisions  Helps in identifying the causes of high labour turnover at various levels and taking preventive measures to contain it  Helps in identifying improper or under-utilization of physical assets or human resource or both  Provides valuable information for persons interested in making long term investment in the firm Contd…
  7. 7.   No specific procedure for finding cost and value of human resources of an organization  Form and manner of including HRA value in the financial statement is not clear  Employee with a comparatively low value may feel discouraged  Tax laws do not recognize human beings as assets Limitations
  8. 8. Cost of Human Resources Acquisition cost -Recruitment Cost -Selection Cost -Placement Cost -Campus Interview Cost Training (Development) cost -Formal Training Cost -On the Job Training Cost -Special Training -Development Programmes Welfare Cost -Medical Expenditure -Canteen Expenditure -Specific and General Allowances -Children Welfare Expenses -Other Welfare Expenditure Other Costs -Safety Expenditure -Ex-gratia -Multi-trade incentives -Rewarding Suggestions
  9. 9.  Measurements in HRA •Historical Cost •Replacement Cost •Opportunity Cost •Standard Cost Cost based approaches: •The Lev and Schwartz Model (Present value of future earnings method) •The Eric Flamholtz Model (Reward Valuation method) •Morse Model (Net Benefit Model) Monetary value based approaches: •Likert Model •The Flamholtz Model •Ogan Model (Certainity Equivalent Net Benefit Model) Non- monetary value -based approaches:
  10. 10.  Cost It is a sacrifice incurred to obtain some anticipated benefit or service Two portions : Expense Asset COST APPROACH
  11. 11.   Historical cost Sacrifice that was made to acquire and develop the resource  Opportunity cost Money to be spent on HR was spent on something else  Replacement cost Cost incurred in the replacement of present employees Types of Cost

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  • raihanuddinratul

    May. 6, 2015
  • ShrutikirtiSaxena1

    Jun. 14, 2021

amity global business (bangalore)

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