Human Resource Accounting HRA - Meaning
Human Resource Accounting (HRA) agency to mensurate the damage too value of the people (i.e. of employees too managers) inwards the organisation. It measures the damage incurred to recruit, hire, prepare too develop employees too managers.
HRA too finds out the acquaint economical value of its employees too managers. After mensuration the damage too value of its employees too managers, the arrangement prepares a report. This written report is called HRA Report. It is shown to the blogspot.com//search?q=levels-of-management-top-middle-and">top degree management. It tin plough over the axe too live on shown to the employees, managers too exterior investors.
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There are many unlike methods of HRA, or too thus of which are:-
- Actual Cost Method,
- Replacement Cost Method,
- Standard Cost method, etc.
Definition of HRA
According to American Accounting Association,
"HRA is the procedure of identifying too mensuration information most human resources too communicating this information to interested parties."
Advantages of HRA
Benefits, objectives, advantages of human resources accounting HRA:-
1. Information for manpower planning
HRA provides useful information most the damage too value of human resources. It shows the strengths too weakness of the human resources. All this information helps the managers inwards planning too making the right decisions most human resources. Thus, it provides useful information for Manpower Planning too blogspot.com//search?q=levels-of-management-top-middle-and">Decision Making.
2. Information for making personnel policies
HRA provides useful information for making suitable personnel policies most promotion, favorable working environment, project satisfaction of employees, etc.
3. Utilization of human resources
HRA helps the arrangement to brand the best utilization of human resources.
4. Proper placements
HRA helps the arrangement to house the right human being inwards the right shipping depending on his skills too abilities.
5. Increases morale too motivation
HRA shows that the arrangement cares most the employees too their welfare. This increases their morale too it motivates them to run difficult too accomplish the objectives of the organisation.
6. Attracts best human resources
Only reputed organisations deport HRA. So, competent too capable people desire to bring together these organisations. Therefore, it attracts the best employees too managers to the organisation.
7. Designing preparation too evolution programs
HRA helps the arrangement to blueprint (make) a suitable preparation too evolution programme for its employees too managers.
8. Valuable information to investors
HRA provides valuable information to acquaint too hereafter investors. They tin plough over the axe role this information to choose the best companionship for investing their money.
Limitations of HRA
Criticism, disadvantages, limitations of human resources accounting HRA:-
- The valuation of human assets is based on the supposition that the employees are going to stay amongst the arrangement for a specified period. However, this supposition is incorrect because employee mobility is really high.
- The human resources accounting may atomic number 82 to the dehumanization inwards the organisation. If the valuation is non done correctly or the results of the valuation are non used properly.
- In the representative of blogspot.com/">financial accounting, at that topographic point are for sure specified accounting standards which every arrangement must follow. However, at that topographic point are no standards for HRA. Each arrangement has its ain standards for it. So, at that topographic point are no uniform standards for it. Therefore, the HRA of ii organisations cannot live on compared.
- There are no specific too clear cutting guidelines for 'cost' too 'value' of human resources of an organisation. The acquaint valuation systems convey many limitations.
- The life of a human existence is uncertain. So its value is too uncertain.
Position of HRA inwards India
In India, really few companies role HRA. It is non compulsory inwards India. Infosys Technologies too BPL are the leading companies inwards India, which role HRA. HRA reports plough over useful information to the companionship management, employees too investors.
