Human Resource Accounting HRA - Meaning
Human Resource Accounting (HRA) agency to stair out the toll as well as value of the people (i.e. of employees as well as managers) inward the organisation. It measures the toll incurred to recruit, hire, prepare as well as develop employees as well as managers.
HRA besides finds out the acquaint economical value of its employees as well as managers. After measure the toll as well as value of its employees as well as managers, the scheme prepares a report. This study is called HRA Report. It is shown to the top degree management. It tin besides survive shown to the employees, managers as well as exterior investors.
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There are many unlike methods of HRA, or as well as hence 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 as well as measure information nearly human resources as well as 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 nearly the toll as well as value of human resources. It shows the strengths as well as weakness of the human resources. All this information helps the managers inward planning as well as making the right decisions nearly human resources. Thus, it provides useful information for Manpower Planning as well as Decision Making.
2. Information for making personnel policies
HRA provides useful information for making suitable personnel policies nearly promotion, favorable working environment, chore satisfaction of employees, etc.
3. Utilization of human resources
HRA helps the scheme to brand the best utilization of human resources.
4. Proper placements
HRA helps the scheme to house the right human being inward the right postal service depending on his skills as well as abilities.
5. Increases morale as well as motivation
HRA shows that the scheme cares nearly the employees as well as their welfare. This increases their morale as well as it motivates them to operate difficult as well as accomplish the objectives of the organisation.
6. Attracts best human resources
Only reputed organisations bear HRA. So, competent as well as capable people desire to bring together these organisations. Therefore, it attracts the best employees as well as managers to the organisation.
7. Designing grooming as well as evolution programs
HRA helps the scheme to blueprint (make) a suitable grooming as well as evolution computer program for its employees as well as managers.
8. Valuable information to investors
HRA provides valuable information to acquaint as well as hereafter investors. They tin 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 rest alongside the scheme for a specified period. However, this supposition is incorrect because employee mobility is really high.
- The human resources accounting may Pb to the dehumanization inward the organisation. If the valuation is non done correctly or the results of the valuation are non used properly.
- In the representative of fiscal accounting, in that location are sure enough specified accounting standards which every scheme must follow. However, in that location are no standards for HRA. Each scheme has its ain standards for it. So, in that location are no uniform standards for it. Therefore, the HRA of 2 organisations cannot survive compared.
- There are no specific as well as clear cutting guidelines for 'cost' as well as 'value' of human resources of an organisation. The acquaint valuation systems accept many limitations.
- The life of a human beingness is uncertain. So its value is besides uncertain.
Position of HRA inward India
In India, really few companies role HRA. It is non compulsory inward India. Infosys Technologies as well as BPL are the leading companies inward India, which role HRA. HRA reports hand useful information to the companionship management, employees as well as investors.
