paper: human resource management lesson: human resource

Institute of Lifelong learning, University of Delhi

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Paper: Human Resource Management Lesson: Human Resource Accounting

Author: Ms. Shachi Yadav, Assistant Professor, Ramjas College, Delhi University Reviewer: Prof. Anand Prakash


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Lesson: Human Resource Accounting and HRD Audit

Table of Contents

1: Learning Outcomes 2: Introduction

3: Emergence of the Concept of Human Resource Accounting 4: Methods of Human Resource Accounting

4.1 Methods, Based on Costs 4.2 Methods, Based on Value

5: HRD Audit 6: Areas of HRD Audit

7: Methods of HRD Audit Summary

Glossary

Exercises References

1. Learning Outcomes:

After you have read the lesson, you should be able to:

comprehend the theoretical framework, behind the concept of Human Resource

Accounting;

appreciate the concept of human assets in organizations;

comprehend the development of thought, concerning Human Resource Accounting;

analyse the methods of Human Resource Accounting;

examine the theoretical understanding, behind the concept of HRD Audit;

examine the scope of Human Resource Development audit in an organization;

analyse the methods of Human Resource Development audit;

appreciate the concept of Human Resource Development Score Card.

2. Introduction:

“The most valuable of all capital is that invested in human beings.”

(Alfred Marshall, Principles of Economics)


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The above statement accentuates the fact that human beings have played a key role in

the process of development of civilization.

There are unquestionable abilities in human beings. We, as human beings, are the

contributors to the growth and development of our organizations. Our conscious

endeavours make a difference in the way of organizations‟ working. Organization‟s

success or failure is largely dependent upon the effective and efficient performance of

employees. Human resources, of an organisation, become more valuable in light of the

fact that no other tangible or intangible asset can replace human resources, and these

resources develop and influence the other tangible and non-tangible assets.

Unlike non-living assets, human resources can take their decisions on their own, and

their performance is not predictable. These idiosyncrasies of human resources make

human asset management a challenging job for the organizations.

A generally satisfactory concept is that good management calls for good measurement.

Accounting helps to generate an effective measurement and reporting system for

decision making. It makes sense to measure human assets in order to improve

managerial decision making in organizational contexts.

With the evidence, suggesting the increased share of knowledge based organizations and

services in Gross Domestic Product, it has become important to harness human

resources for organizational value creation.

The importance of developing a process to identify and measure the data, concerning

human resources and its communication to stakeholders, has been emphasized by

committee on Human Resource Accounting of the American Accounting Association.

Value Addition :1 Discussion Forum

Test of Ethics Discuss the ethical relevance and acceptability of valuation of Human assets in the

organization. Develop arguments for and against inclusion of Human assets in the

accounting statement.

3. Emergence of Human Resource Accounting:

Are people measureable assets?

Sprouse and Moonitz have observed that assets represent future economic benefits they

are capable of rendering to the organization, rights to which have been acquired by the

organization as an outcome of some current or past transaction.

Since people are not legally owned by the organizations, the treatment of human

resources, as assets, has been criticized by some authors.

This view may be countered on several grounds. The concern for human valuation is

primarily with the performance of human services, not with humans per se. Now, the

question arises whether employee services qualify as assets. Let‟s give some

consideration to the economic viewpoint, as suggested by American Accounting

Association‟s definition, which says that accounting is primarily concerned with events

and objects that have economic significance and this does not necessarily involve legal

ownership.


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It follows from the above discussion that to be considered as an asset a resource must

have service potential for the future.

The argument can be forwarded on the grounds that the service potential of the

employees is not assured for the future. But that there is no assurance of future benefit

from human resources is equally true of other resources. In the world of uncertainty,

one can never be sure of future benefit from any asset, including physical asset like

machinery , accounts receivable etc. on the basis of the above argument, it can be said

that human resources are as much assets as any other resource.

As noted by Brummet and Flamholtz, measurement of the value of human resources can

assist the management, in recognizing and defining problems, related to people at work.

If the accounting system is made to include the value of firm‟s human resource and its

changes over time, the adjusted figure would give a more realistic measurement of

managerial effectiveness.

Human Resource Accounting can be understood as a tool that can be used to generate

and report quantitative information, about the contribution of human resource, for the

promotion of organizational productivity.

The underlying premises, supporting the concept of Human Resource accounting, are:

a) Human resources are valuable resources of an organization.

b) The ways these resources are managed greatly determine their effectiveness and

efficiency.

c) Information on investment and value of human resources is useful for decision making in

the organization.

“Human Resource Accounting is the process of identifying and measuring data about

human resources and communicating this information to the interested parties.”

- American Accounting Association, 1973

“Human Resource Accounting is the process of developing financial assessments for

people within organization and society and the monitoring of these assessments through

time. It deals with investments in people and with economic results of those

investments.” -R Lee Brummet, Eric G. Flamholtz and William C. Pyle.

“Human Resource Accounting can be defined as the process of identifying, qualifying,

accounting and forecasting the value of human resource in order to facilitate effective

human resource management.” - John Bratton and Jeffery Gold, 20039

Interactive 1

Value Addition :2 Activity

Analysing the Annual Reports of Selected Companies


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Document the corporate reporting practices of select Indian companies, both in private

and public sector, concerning Human Resource Accounting. Gauge the recent trend and

commonly accepted human resource accounting practice in India.

4. Methods of Human Resource Accounting:

We have already discussed that the concept of human value is derived from the concept

of general economic value of all resources. Information, generated from valuation and

accounting of human resources, is a key ingredient of managerial decision making. Over

and above this major objective of internal management, the relevant human resource

data is expected to be useful to other stakeholders, e.g., investors, creditors, financers

and government agencies. Approaches to the methods of measuring the value of human

resources have been developed by a number of authors, keeping the nature and use of

such data in mind.

Figure 1: Methods of Human Resource Accounting


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Methods to account for human resources can be classified into the following categories:

4.1 Methods, Based on Cost:

Figure 2: Methods Based on Cost

Cost may be defined in terms of a sacrifice made, something forgone to acquire a

service, an anticipated benefit or a thing. Benefits or returns from the cost can be

deferred and extended over a period of time. Ever since, the idea of human resources,

as an asset, considering valuation, recognized by the accounting community, is based

on cost to arrive at the value of human resources. On the basis of cost, the following

methods are used for human resource valuation:

Original Cost Method/Historical Cost Method:

The original cost method was developed by Brummet, Pyle and Flamholtz to measure a

firm‟s investment in human resources. Brummet et al., suggested the use of

conventional accounting procedure to determine the value of human assets, based on

the acquisition costs, including the costs of recruitment, development and familiarization.

It is similar to the concept of original cost for other assets.

Under this method, the cost of acquisition, i.e., selection, training are capitalized and

written off over the expected useful tenure of human resources. If the human asset

leaves the organization before the expected period of service, the whole amount, not

written off, is charged against the income of current year.

On a positive note, if the period of service exceeds the expected period, the amortization

of costs is rescheduled accordingly.

Value Addition: 3 Did You Know?

HR Accounting at R G Barry Corporation The original cost model was first developed by William C. Pyle, R. Lee Brummet and Eric

G. Flamholtz in association with the university of Michigan, was implemented in R G

Barry corporation, a leisure footwear manufacturing organization, in 1968, which was

discontinued later.

Source: http://www.rgbarry.com/rgbarry-history/

Replacement Cost Method:


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Replacement cost method was proposed by Eric G. Flamholtz in 1973. Replacement cost

model, as a valuation tool, is used both as an alternative and as a supplement to the

historical cost method. This valuation method involves measurement of the cost, to

replace a firm‟s existing human resources. It can be calculated by mapping the cost to

the firm, to recruit, hire, train and develop human resources, as to replace the existing

employees in terms of proficiency and familiarity with the organization.

Replacement costs can be personal or positional. Personal replacement costs refers to

the cost of replacing an individual with a substitute who is able to render the services,

equivalent to the replaced individual, i.e., same services in the same position. Whereas

positional replacement cost reflects the cost of replacing the set of services, expected to

be provided by an employee, in the present and future positions.

Opportunity Cost Method:

Hekimian & Jones preferred the use of opportunity cost method to arrive at a human

resource valuation. This involves a competitive bidding process, initiated by different

divisions of the organization, for scarce employees.

The bid is based on perceived value of the employee. This model takes care of valuation

of only the scarce employees. The successful bid price becomes part of the investment

base.

Standard Cost Method:

Standard cost method is suggested by David Watson. This method takes the standard

annual costs of recruitment, hiring, training and developing the employees, (per grade),

into account, in an organization. The total standard cost, so arrived for all employees, is

the value of human resources.

Interactive 2

4.2 Methods, Based on Value:


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Figure 3: Methods Based on Value

Value of resources can be understood in terms of its utility and is known as „use value‟.

Value concept can also be interpreted in terms of purchasing power of the resource.

Value is then termed as exchange value.

As it is evident that the value of human resource can be interpreted in the former sense

of „use value‟, i.e., in terms of the future value of the services, rendered by the

employees. The following models use the value approach to determine the human

valuation and are discussed as under:


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Hermanson’s Unpurchased Goodwill Method:

Under this method, it is assumed that the business will earn a normal rate of return on

resources. If a business shows to have any different rate of return than normal returns,

it is assumed that it is an account of human resources.

So, as per Hermanson, the value of human resources is the excess actual profit over the

profit on total physical assets, owned by the organizations, at a normal rate of return.

Hermanson’s Net Adjusted Present Value Method:

This method considers the present value of future wages and salaries, payable to the

employees, and assumes that a relationship exists between a person‟s salary and his

value to the enterprise. This present value of future wage payments needs to be

adjusted with the efficiency factor.

The following steps will be considered, while calculating the value of human resources:

Figure 4: Steps in Hermanson’s Net Adjusted Present Value Method

Interactive 3

Lev and Schwartz‟s present value of future earnings Model


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The model, by Brauch Lev and Schwartz, is advancement over Hermanson‟s adjusted

discount future wages model. The model is recognized as a general economic valuation

model.

“The value of human capital, embodied in a person of age T, is the present value of his

remaining future earnings from employment”. (Eric Flamholtz, 1974)

The model involves:

Figure 5: Lev and Schwartz’s Present Value Model

This model works on the basic assumption that the value of human resource is equal to

the present value of remuneration, payable to him during his service tenure.

𝑣𝑟= 𝐼 𝑡

1+𝑅 𝑡−𝑟𝑇𝑡−𝑇

𝑣𝑟=value of an individual

T= Present age

I (t) = the individuals annual earnings up to the retirement

t= retirement age

R= Discount Rate

Flamholtz’s Stochastic Rewards Valuation Model:

The model, developed by Eric G. Flamholtz, in 1971, considers the possibility of each

employee, working in different positions at different levels. The movement of employees,

from one role to another, within the organization, is stochastic process that is linked to

rewards.


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Under this approach, the human resource value is considered equal to the total of

present value of future rewards, adjusted with the probability of mobility and separation

of each employee. The present value may be determined on the basis of expected

services in each service level or state that the employee may occupy during the service

tenure with the organization.

Jaggi and Lau Method:

Bikki Jaggi and Hon Shian Lau have attempted to improve upon the Flamholtz model, by

introducing the group concept.

In this mode, the employee movement patterns are expressed in terms of probabilities

for group of employees, as suggested by the historical data. This method takes the

duration of employment as well as promotion paths into account.

Value Addition : 4 Case Situation

Designing a HR Accounting System You are recently appointed as a consultant to an ITES organization, as part of your job,

you are required to design a human resource accounting system. Develop:

The objectives of designing a HR accounting system

A note on the method(s) you would use

Recommendations for effective HR accounting. Interactive 4

5. HRD Audit Concept: It is realized that in an increasingly competitive world, the competency of employees and

Human Resource Development (HRD) systems have become more strategic than ever.

While physical assets and other such variables give limited advantage, the human

resources are believed to provide unlimited competitive advantage.

HRD is seen as impacting shareholders value, by influencing a whole gamut of variables,

including customer loyalty, quality improvements, revenues, cost and many others.

In last two decades, HRD has become an inevitable part of organizational growth and

change. A large number of organizations have set up HRD departments, introduced new

systems, and even made structural changes to incorporate HRD function and link it with

the other organizational systems.

Unfortunately, the buzz around HRD, though able to channelize substantial investments,

was not able to realize the full potential and grasp HRD in true spirit.

The concept of HRD audit stems from these lacunae and seems promising, as it enables

checking against some accepted and standardised principles of HRD.

Value Addition: 5 Did You Know?

HRD Audit

Dr. T.V Rao, formerly the professor at IIMA, has extensive work in the field of HRD. He

is the founder president of the National HRD Network. He has authored various books

and articles in the area of HRD.

Source: Visit the link http://www.tvrls.com/video_gallery.php to know more about the

http://www.tvrls.com/video_gallery.php


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book 100 manager‟s in action by T.V.Rao

HRD Audit: Despite the potential of contributing for building world class organizations, HRD, in

several organizations, evokes criticism and cynicism. In most organizations, HRD seems

to be a stand-alone activity and there are no apparent linkages between the impact of

HRD interventions and organizational performance. The reason, as it seems, is little

attention to the evaluation of the HRD systems.

Audit is important to the renewal. The aim of audit is to check, evaluate and review. It is

one of the important management control devices.

HRD audit can be understood as a comprehensive process for evaluation of HRD

strategies, structure and systems, styles and skills, in the context of future business

plans and corporate level strategies of the firm.

HRD audit attempts to map the competency requirements of the employees in order to

achieve the long and short term plans of the organization.

“HRD Audit is a comprehensive evaluation of human resource development,

encompassing strategies, systems, practices, structure, competencies, styles and

culture, and their appropriateness to achieve the short and long term business goals of

the organization.”

(Dr. T.V.Rao)

HRD audit is business focussed and evaluates HR strategy structure and systems, and

their relevance, vis a vis, the requirements of the organization.

HRD Audit starts, in an organization, with the following objectives:

To understand future business plans and corporate strategies, and to align HRD with the

overall goals of business.

To aim at building HR function to be more business driven.

To assist the top management to set up corporate strategies.

To support the growth and expansion plans of the business.

To prepare the organization for leadership change.

To investigate the reasons behind low productivity, employee turnover, and improve the

strategies.

HRD audit calls for a comprehensive evaluation of the various components of HRD,

against a set of accepted principles and conceptual framework as well as the current

business environment.

Value Addition : 6 Discussion Forum

Mind Set of a CEO “It is futile to conduct the HRD audit in my organization; nobody would like to spare

time for this unproductive activity. But, Do I have any choice? The overseas clients are

asking for a report on HRD audit? OK, I have instructed VP Human Resources to keep


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ready the papers and made up files. I am fairly confident of my knowledge of the HR

department. It‟s a waste of time and effort to collect information again.”

Mr. XYZ CEO of a manufacturing company holds this view.

Discuss with your peer:

Is the attitude of CEO, regarding HRD audit, Justifiable?

6. Areas of HRD Audit:

HRD audit, as a system, has its own objectives, elements and a process. The foremost

objective of the HRD system is to build the proficiency of employees, teams and the

whole organization, using a variety of instruments.

HRD audit assesses the overall HRD systems and sub systems for their clarity of

objectives, comprehension by the users, structure and implementation, and congruence

with the overall organizational goals.

HRD audit can be conducted in the following areas:

HRD Competencies:

An assessment in this area aims at the evaluation of the competency level of HRD

department as a whole. This covers the mapping competencies of the managers, top

management, union representatives, and the HRD staff.

HRD audit examines the adequacies and inadequacies of the HRD department, and helps

to strengthen the effectiveness of HR.

HRD Structure:

HRD structure deals with elements, like, task structure, tools and equipments,

infrastructural facilities, role relationships, and organizational processes.

HRD audit attempts at evaluating the relevance and efficiency of the structure, in terms

of its contribution to the overall business strategy.

It also highlights the areas, like, competency, current status, flexibility, cost

effectiveness, other strengths and weaknesses.

HRD Styles:

Congruence of HRD styles, with the style of top management, would largely define the

effectiveness of HRD systems. HRD audit may give insights on the effective use of

appropriate styles that are required to run the system or subsystems.

HRD Culture and Values:

HRD audit, in this area, is again a check of congruence of HRD culture and values, with

the culture, desired and values upheld, by the top management. HRD audit seeks to

build uniformity in culture and values of top management, and HRD philosophy, in order

to facilitate the realization of overall organizational goals.


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HRD Impact:

HRD audit aims at measuring the impact of HRD interventions on organizational

outcomes, e.g., profits, cost reduction, and process variables- talent management,

intellectual capital formation, and so on.

The HRD audit aims to quantify the variables that are involved for the purpose of

measurement.

The evaluation is done for all the areas, concerning HRD strategies and systems, HRD

competencies, HRD values and culture, and HRD impact.

The evaluation can be done with the help of an HRD scorecard which is an assessment of

HRD competency level of the organization. For the purpose of an audit, the auditor

assigns ratings to all the areas, contributing to the overall effectiveness, viz., HRD

competencies, HRD structure, HRD culture and values, HRD impact. A comprehensive

score is calculated and an overall HRD maturity grading is provided.

A Sample HRD Scorecard:

Sample HRD Score Card

Name of the organization ABC

HRD System

and Strategies

HRD

Competencies

HRD

Culture and Values

HRD

Impact

Overall

HRD maturity

Grading

A* B B* A A

Value Addition: 7 Activity

Develop an HRD Scorecard Develop an HRD scorecard for the HR function of a chosen organization. Do you think it

is an appropriate procedure to gauge the overall HRD maturity?

7. Methods of HRD Audit:

A wide variety of methods are used in the process of conducting HR audit so as to assess

the strengths and weaknesses of overall HRD system. The following methods can be

adopted to validate HRD audit, individually or as a combination:

Interviews:

Interviews, with the top management, are conducted individually, to get an insight of

the future plans and opportunities available for the company. These interviews can be

scheduled hierarchically from the top management to the line managers, in order to get

a broader picture of the organization.

It pays to structure the interview, in order to obtain relevant information and insight.

Interviews also serve as a platform to obtain first-hand information, regarding the views,

concerns and perceptions of the employees.


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Group Discussions and Workshops:

To obtain information about various aspects of HRD, a large scale interactive process

may be utilized. This is particularly useful when there are apprehensions in the

employees to talk about an issue. If structured well, the relevant information can be

obtained in less time and effort.

Observation:

Auditors visit the workplace, plant, canteens and other welfare amenities, to observe the

employees in their natural environment. Observations can be made, regarding the

supporting environment, with the help of a checklist.

Analysis of Records and Documents:

The analysis of records and documents can give the auditors an insight into the current

state of affairs of the organization. A scrutiny of performance appraisal form, training

reports, employee record files and annual report would help to judge the strength and

weakness of HRD.

Questionnaires:

Valid instruments can be constructed or pre validated questionnaires can be used to get

information, regarding the various aspects of HRD. The gathered data can be used to

benchmark the systems and processes.

Value Addition : 8 Project

Quick HR Audit Checklist Conduct an audit of the HR function, in an organization, to understand the role that HR

plays in that company. Record your findings.

Source: http://www.insureatbyron.com/apga_docs/Sample_HR_Audit_Checklist.pdf

Summary:

Human resources are the key factors that provide competitive advantage to the

organization.

Keeping in mind the growing importance of the human resources, it has become

important to develop a process to measure and record data, concerning human

resources.

The information, about costs and benefits of human resources, is useful for decision

making purposes, in an organization; it also proves to be useful to other stakeholders.

Human Resource Accounting is a tool that is used to generate and record quantitative

information about the contribution of human resource in enhancing organizational overall

performance.

http://www.insureatbyron.com/apga_docs/Sample_HR_Audit_Checklist.pdf


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Human resources are considered to be an asset as they have service potential for the

future.

On the basis of use and nature, various methods have been developed by the theorists,

to measure and record the human resources in financial statements.

Original cost, replacement cost, opportunity cost and standard cost are some of the

methods that are based on costs, which include, cost incurred by an organization to

recruit, hire, train and develop human resources.

Hermanson‟s unpurchased goodwill method, Hermanson‟s net adjusted present value

method, Lev and Schwartz‟s present value of future earnings method, Flamholtz‟s

Stochastic rewards valuation method, and Jaggi and Lau method are some of the

methods based on the economic value of human resources.

Cost is sacrifice made, or something forgone, to acquire an anticipated benefit.

Value of human resources can be understood as the future value of services, rendered

by them.

With the growing importance of human resource in the organization, HRD has become an

inevitable part of large number of organizations.

HRD audit is a comprehensive process and it helps to evaluate various areas of HRD,

against the long and short term goals of the organization.

HRD audit helps at making the HR function more business driven.

HRD audit also supports leadership change, growth, and expansion plan.

HRD competencies, HRD Structure, HRD styles, HRD culture and values, and HRD impact

can be evaluated under the HRD audit of an organization.

HRD scorecard is an assessment of HRD maturity level of an organization.

A wide variety of methods, e.g., interviews, group discussions and workshops,

observation, analysis of organization‟s records and documents, and questionnaires can

be used to get information, regarding various aspects of HRD.

Glossary: Knowledge Based Organizations: An organizational set up that values collection,

dissemination and utilization of new knowledge with a view to innovate and develop

what is known.

Human Capital: The concept that human performance and the results achieved can be

considered as return on investment and can be assessed in terms of cost and benefit.

Competitive advantage: is an advantage over competitors gained by implementing a

value giving strategy not in use by the competitors or an efficient execution of the same

strategy as competitors.

Benchmarking: a form of auditing that helps organizations to map their practices

against those in excellent organizations with a view of improvements in their processes.

Competencies: it is basically underlying characteristics of a person which result in

effective performance within an organizational context.

Validity: A statistical measure of the extent to which a selection or assessment

technique actually measures which it is supposed to measure.

Exercises:

A. Objective Type Questions:


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1. Do as Directed:

a) Match the HR Accounting Methods with the Theorists:

A. Replacement Cost Model 1.Hermanson

B. Opportunity Cost method 2.Lev and Schwartz

C. Un purchased Goodwill Method 3.Eric G. Flamholtz

D. Present Value of Future Earnings Model 4.David Watson

E. Standard Cost Method 5. Hekimian and Jones

b) Choose the Right Answer:

Which of the following methodologies is not a part of HR audit?

A. Questionnaires

B. Videoconferences

C. Group interviews

D. Workshops

c) Fill in the Blanks:

1. A --------------- is the systematic assessment of an organization‟s service excellence.

2. Original cost method is also known as----------------.

d) Give One Word Answer:

1. The world is increasingly acknowledging these as the key factors providing competitive

advantage to the organization. 2. Under this HR accounting method the cost of acquisition i.e., selection, training are

capitalized and written off over the expected useful tenure of human resources.

3. Give the name of the valuation method which involves measurement of the cost to

replace a firm‟s existing human resources.

4. This method of Human Resource Accounting involves a competitive bidding process

initiated by different divisions of the organization for scarce employees.

5. This method of Human Resource Accounting takes into account the standard costs of

recruitment, hiring, training and developing employees per grade in an organization

annually.

6. This method of Human Resource Accounting considers the present value of future wages

and salaries payable to the employees and assumes that a relationship exists between a

person‟s salary and his value to the enterprise. 7. This model works on the basic assumption that the value of human resource is equal to

the present value of remuneration payable to him during his service tenure. 8. Under this approach of Human Resource Accounting, the human resource value is

considered equal to the total of present value of future rewards adjusted with the

probability of mobility and separation of each employee.

9. It can be understood as a comprehensive process for evaluation of HRD strategies,

structure and systems, styles and skills in the context of future business plans and

corporate level strategies of the firm.

10. The concept that human performance and the results achieved can be considered as

return on investment and can be assessed in terms of cost and benefit.


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B. Short Answer Type Questions:

1. What do you mean by Human Resource Accounting?

2. Define Cost.

3. Define Value.

4. How does Human Resource accounting aid managerial Decision making? Explain.

5. Evaluate the original cost method of Human resource accounting critically.

6. What is HRD Audit?

7. What are the benefits of HRD audit?

8. What is HRD Scorecard?

9. Explain the methods of HRD audit briefly.

C. Long Answer Type Questions:

1. What do you mean by Human Resource Accounting? Discuss the arguments, for and

against, considering human resource as assets.

2. What are the objectives of HR accounting? Explain the various methods of HR

accounting.

3. Define and explain the concept of HRD audit. Why is HRD audit important?

4. What is HRD scorecard? Prepare a sample HRD scorecard.

5. Discuss the methodology of HRD audit in detail.

Answers to Objective Type Questions:

Correct answer 1a A.3

B.5

C.1

D.2

E.4

Correct answer 1b B. Video Conferences

c) 1. Human Resource Audit; 2. Historical Cost Method.

d) 1. Human Resources; 2. Cost; 3.Replacement Cost Method;

4. Opportunity Cost Method; 5. Standard Cost Method; 6.Hermanson‟s

Net Adjusted Present Value Method; 7. Lev and Schwartz‟s Present Value of Future

Earnings Model; 8. Flamholtz‟s Stochastic Rewards Valuation Model;

9. HRD Audit; 10. Human Capital.

References:

A. Work Cited:

Brummet R. Lee., Flamholtz, E., and Pyle, William C., Human Resource

Measurement- A Challenge for Accountants, The Accounting Review, American

Accounting Association, U.S.A., April 1968, PP. 217-24

AAA, “Report of the Committee on Human Resource Accounting”, The Accounting

Review, Supplement to Vol. XLVIII(1973), pp.169

R.T.Sprouse and M. Moonitz, A Tentative Set of Board Accounting Principles for

Business Enterprises, Accounting Research Study No. 3, AICPA , New York, !962


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American Accounting Association, A Statement of Basic Accounting Theory, Evanston,

IIlinois, 1966.

Jyothi, P. & Venkatesh, D.N. (2013). Human Resource Management. New Delhi:

Oxford University Press.

Flamholtz, E. (1971), “A Model for human resource valuation: a stochastic process

with service rewards”. The Accounting Review, April. Pp. 253-257.

Jaggi, B., and Lau, S. (1974), “Toward a model for human resource valuation”. The

Accounting Review, April, pp. 321-9

Lev, B. and Schwartz, A. (1971), “On the use of the economic concept of human

capital in financial statements”. The Accounting Review, January, pp. 103-12.

B. Web Links:

Visit the link

http://www.insureatbyron.com/apga_docs/Sample_HR_Audit_Checklist.pdf to obtain

a sample HRD audit questionnaire.

Visit the link http://www.rgbarry.com/rgbarry-history/ to get information about R G

Barry Corporation

C. Video Links:

Visit the link http://www.tvrls.com/video_gallery.php to know more about the book

100 Manager‟s in action by T.V.Rao

Visit the link http://www.youtube.com/watch?v=4iofrDAoQ2w to know five most

important things to measure in HR by Jac Fitz Enz.

Visit the link to http://www.youtube.com/watch?v=H7eDABbJm00 to know more

about ROI for Human Capital - A Business Asset

http://www.insureatbyron.com/apga_docs/Sample_HR_Audit_Checklist.pdf

http://www.rgbarry.com/rgbarry-history/

http://www.tvrls.com/video_gallery.php

http://www.youtube.com/watch?v=4iofrDAoQ2w

http://www.youtube.com/watch?v=H7eDABbJm00