Human resource accounting tracks and measures the value of human resources in an organization. It provides cost and performance data to help with management decisions around acquiring, developing, and maintaining human capital. There are two main approaches to measurement - the cost approach focuses on expenses related to employees, while the economic value approach sees human resources as assets contributing to organizational gains.
Human resource audits evaluate how well an organization utilizes its human resources. The audit process involves defining desired HR practices, assessing current practices, analyzing gaps, and establishing improvement goals. Audits are conducted through interviews, documentation review, and questionnaires. The final report identifies strengths and weaknesses to help enhance HR performance.
Human resource accounting tracks and measures the value of human resources in an organization. It provides cost and performance data to help with management decisions around acquiring, developing, and maintaining human capital. There are two main approaches to measurement - the cost approach focuses on expenses related to employees, while the economic value approach sees human resources as assets contributing to organizational gains.
Human resource audits evaluate how well an organization utilizes its human resources. The audit process involves defining desired HR practices, assessing current practices, analyzing gaps, and establishing improvement goals. Audits are conducted through interviews, documentation review, and questionnaires. The final report identifies strengths and weaknesses to help enhance HR performance.
Human resource accounting tracks and measures the value of human resources in an organization. It provides cost and performance data to help with management decisions around acquiring, developing, and maintaining human capital. There are two main approaches to measurement - the cost approach focuses on expenses related to employees, while the economic value approach sees human resources as assets contributing to organizational gains.
Human resource audits evaluate how well an organization utilizes its human resources. The audit process involves defining desired HR practices, assessing current practices, analyzing gaps, and establishing improvement goals. Audits are conducted through interviews, documentation review, and questionnaires. The final report identifies strengths and weaknesses to help enhance HR performance.
Human resource accounting tracks and measures the value of human resources in an organization. It provides cost and performance data to help with management decisions around acquiring, developing, and maintaining human capital. There are two main approaches to measurement - the cost approach focuses on expenses related to employees, while the economic value approach sees human resources as assets contributing to organizational gains.
Human resource audits evaluate how well an organization utilizes its human resources. The audit process involves defining desired HR practices, assessing current practices, analyzing gaps, and establishing improvement goals. Audits are conducted through interviews, documentation review, and questionnaires. The final report identifies strengths and weaknesses to help enhance HR performance.
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Human Resource Accounting & Aduit :
Human Resource Accounting:
Human Resource Accounting Human Resource Accounting is defined as The process of identifying and measuring data about human resources and communicating this information to interested parties. Purpose of Human Resource Accounting: It furnishes cost/value information for making management decisions about: - acquiring, allocating, developing & maintaining human resources in order to attain cost-effectiveness It allows management personnel to monitor effectively the use of human resources It provides a sound and effective basis of human asset control It helps in developing management principles by classifying financial consequences of various practices Objectives of HRA: To inform general public how far enterprises are successful in fulfilling the human contributions To facilitates effective and efficient management of human resources. To provide information of changes in the structure of manpower to the management. To provide qualitative, relevant and timely information on human resources. To know whether the human resources are properly utilized and allocated. To evaluate the return on investment on human capital. Measurement in HRA : Two main approaches are employed for measurement: 1. Cost Approach which involves methods based on costs incurred by the company, with regard to an employee 2. Economic Value Approach which includes methods based on: the economic value of human resources and their contribution to the companys gains This approach looks at human resources as assets & tries to identify the stream of benefits flowing from the asset Return on Investment Approach: Return on Investment Approach HR ROI = Results (actual performance or expectations) Salary + human resource development investment
The concept of HR ROI is expressed with the above equation. The
denominator of the HR ROI is essentially the total amount of compensation for a targeted individual employee. This total compensation includes salary, benefit packages and investment in human resource development. The fixed HR ROI rule aims at encouraging more high-performance employees - to improve their skills and knowledge through a training and self enhancement program. Human Resource Audit Purposes of HR Audit : To get a clear judgment about the overall status of the organisation To find out whether certain systems put in place are yielding any results To figure out any gaps or lapses and the reason for the same To identify and address HR-related problems To seek out HR-related opportunities To conduct due diligence for mergers and acquisitions To support initial public offerings HR Audit Process : HR audit process is conducted in different phases Each phase is designed to build upon the preceding phase These phases are: Pre-Audit Information Pre-Audit Self-Assessment On-site Review Records Review Audit Report Preparation for an Audit : Auditor engagement : If using internal resource it is better: to appoint them formally with clarity on scope and to select persons who are non political or those who are not high on hierarchy also must be training for the persons in auditing Data gathering : Completion of a self-assessment questionnaire significantly expedites the audit process and Allows for better audit planning On-site access: On-site portion of the audit is the most critical. Approaches to HR Audit : There are five approaches to HR Audit: Comparative approach Outside authority
Statistical Compliance approach and
Management By Objectives(MBO) The audit is made up of four main steps: Define desired HR practices for your organization Assess current practices against the criterion that you have established Analyze the results Establish improvement goals and take action Benefits of HR Audit : It helps to find out the proper contribution of the HR department towards the organization. Development of the professional image of the HR department of the organization. Reduce the HR cost. Motivation of the HR personnel. Find out the problems and solve them smoothly. Provides timely legal requirement. Sound Performance Appraisal Systems. Systematic job analysis. Smooth adoption of the changing mindset. Methodology and Instruments of HR Audit : In audit to evaluate the HRD structure, system, culture, competency & other aspects, the following multiple methods are used: Interviews Group Discussions and workshops Observation Analysis of records and documents Questionnaires HR Audit Report : HR audit report may be clean or qualified. Clean report indicates the appreciation of the department's function, Qualified report represents the gaps in performance & therefore contains remarks and remedial measures. HR Audit is very much helpful to face the challenges and to increase the potentiality of the HR personnel in the organization.