Human Resource Accounting System in Selected Indian Companies

Upasna Joshi

doi:10.22610/jsds.v3i2.687

Abstract

The human resource may be seen as the most fundamental of all available resources to an economy or an organization. Human resources are energies, skills, talents and knowledge of people that are or can be potentially applied to the production of goods and services. Corporations cannot run by machines or systems alone, however smart those may be. The human element in it is inevitable, even for knowledge based lean organizations of the 21st century. It is an irony that valuation of this important asset is not reflected in the books of accounts. However to enhance goodwill and attract investors, need is being felt for human resource accounting. In our present paper, an attempt has been made to do the comparative study of the human resource accounting practices of CCI, HPCL, Infosys and Rolta India Limited. The variables that are important for the purpose of human resource accounting are identified and by analyzing, the annual reports of these selected companies scores are assigned to the organizations and mean scores for these organizations were calculated. Ranks to the organizations are also given based upon the extent of the HRA information reported in their annual reports.

Highlights

Human Resource factor is very crucial, important and sensitive factor of production
It was established with the objective to achieve a pioneering and leading position in the exploration of cement grade limestone reserves and to emerge as a dominant leader in the production of cement in the country.Cement Corporation of India (CCI) branded human resources as ‘Mother Resources’ through which other scarce resources viz., machines, material, money are organized, coordinated, directed and controlled.CCI made an attempt to value its human resources by working out the present value of anticipated future earnings taking into account the present pay scales and promotion policies being followed
Whereas Cement Corporation of India mentioned in their annual reports that, they were considered the refinements suggested by Eric Flamholtz and Jaggi & Lau in the valuation of human resources of their organizations

Summary

Introduction

Human Resource factor is very crucial, important and sensitive factor of production. An organization having immense physical resources with latest technology may suffer financial crises as it does not have right people to manage and to conduct its affairs. To in spite of technological developments, the importance of human resources to ensure the organization’s success has no way abridged. Accounting has concentrated on the physical and financial resources of an entity, without bringing this vital ingredient of social system into its fold forgetting that the performance of the enterprise itself is the product of human activity and the failure of most of the organizations is due to the poor performance of its people. Realizing the importance of human resources, the accountants and economists all over the world became conscious and this has led to the development and implementation of Human Resource Accounting along with financial statements

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