AIRO INTERNATIONAL JOURNAL VOLUME 7 ISSN … Gautam.docx · Web viewAfter that comes Nibson India Ltd. what's more, Gillette India Ltd. which have around same estimation of HR yet

AIRO INTERNATIONAL JOURNAL VOLUME 7 ISSN 23213914

AN ANALYTICAL STUDY OF HUMAN RESOURCE ACCOUNTING

PRACTICES – AN INDIAN EXPERIENCE

Submitted by :- Ayushee Gautam

Abstract

Human asset bookkeeping has high essentialness for the administration, as well as for expert and notwithstanding for representatives. It offers administration in better use, some assistance with planning administration of HR in the association while for examiner, Even today, when a decent arrangement of work has been done in this field, it is all that much tragic that there is not just set example or for the most part acknowledged strategy either for valuation of human asset or for their recording in books of records or for the revelation of data by method for various explanations. The study concentrates on the figuring of the estimation of HR at various levels of association and to decide the human asset effectiveness remainder. Fifteen Companies are analyzed for the estimation of human asset estimation. The present study in light of the essential information identified with the estimation of HR. The joining of the estimation of HR is exceptionally costly and difficult to ascertain the estimation of HR and in the event that they figure it, then the quality won't demonstrate the genuine position of human asset.

Keywords: Human Resource Accounting, Indian Human Resource Practices, Lev and Schwartz model, Human assets, Human Efficiency

1. Introduction:

Human Resource Accounting gives information as for internal nature of affiliation and helpers in settling on decisions concerning whole deal enthusiasm for that affiliation. The agent's trading power and execution are also impacted by this. Regardless, neglecting having such importance, examination of human resource of an affiliation had not been given required thought by organization researchers for very much quite a while. Under the goals the cash related clarifications are prepared agreeable with the Company Law in India. There is no expansion for exhibiting any basic information about HR in cash related enunciations except for the remuneration paid to them and the amount of laborers getting pay past certain aggregate per annum.

In any case, there is nothing to disallow the associations to interface information about the estimation of HR and the outcomes of their execution in the midst of the accounting period in


notes or timetables. The going with are the general thoughts in the working of the HR thought by affiliations:

1. Only inside human affiliation (laborers) is considered. Outside affiliations, for example, customers are not considered.

2. All arrangements of agents are joined. The estimation of delegate potential organizations is considered.

3. HR quality is worked out on certain standardized comparison made by pros.

4. A 12% markdown rate is grasped.

5. Employees are requested by and pay scales under six arrangements i.e. authorities, supervisors, supporting particular staff, skilled artisans, clumsy and semi-capable workers and managerial staff.

6. Weighted ordinary is figured for each social affair on information of total number of specialists at each incremental stage and in each assessment.

7. Future number of delegates is worked out on the reason of general progression plan.

8. Employee examinations fuse prompt and underhanded preferences.

HRM and HRA is in no time trailed by most of the medium and extensive scale associations in India as there is consideration regarding the formal with respect to Revenue, gainfulness, versatility in inclination change and so forth. What used to be a task like Personnel Management is in the blink of an eye Human Resources Management and the boss can grow up to Director level in a couple of associations. That is the essentialness displayed by associations for the Human Resources limit.

2. Research Methodology:

For pursuing any research there should be a proper research methodology. A detailed plan of the research methodology is provided below:

2.1 Research Problem:

The research problem of the study is:

“An Analytical Study of Human Resource Accounting Practices – An Indian Experience” 2.2 Objectives of the Study:


The main objective of the study is to measure the value of human resources in the corporate financial statements. However, the specific objectives are as follows:

To study the value of human resources at different levels of organization.

To study hierarchical per capita HR.

iii)To determine the human resource efficiency quotient.

2.3 Period of Study :

The period of study is confined to 2007-08 as no data is available after this period, of the selected companies.

Sampling Techniques :

Sampling technique used is convenient sampling technique.

Sample of Study :

The overall study is confined to 15 Indian Companies which are:-

Gillette India Ltd.

Guru Gobind Singh Thermal Power Plant

HNT International

Haryana Milk Foods Ltd.

Ind. Chenial Health Spl. (P) Ltd.

Keniforn Chemicals Pvt. Ltd.

Mahaan Proteins Ltd.

Nibson India Ltd.

OST Electronics Ltd.

Poorva Consultants

Ranbaxy

M/s Saint Gobain Diamat Winter Ltd.


Sagar Electricals

Tata Consultancy Services

Vedilal Chemicals Ltd.

Sources of Data Collection :

The data used for this study is primary data. Questionnaires sent to selected companies and on that basis data is collected and analyzed.

Data Analysis :

To process the data scientifically and to make it easily understandable statistical method of tabulation is used. Compilation of data was done with the aid of computers. MS-Excel was used for data processing and presentation.

Limitations of the Study :

Every research conducted has certain limitations. The limitations of this study are as follows:

Although 15 Companies are being taken into consideration, still data collected is about the present number of employees working in organization. There is no information of past employees.

The study being corporate sector or company specific cannot be generalized.

3. Measurement of Human Resources :

People are the dynamic components of each association. The achievement of any association, as it were,

relies on the quality and bore of the general population working in it. At the end of the day, HR is the

most vital resource of an association. Hence, regardless of every innovative improvement, the

significance of HR has not the slightest bit reduced. With the appearance of experimental administration,

which accentuation on quantitative approach to make a most proficient utilization of all assets,

additionally it incorporates the calculation of the human asset capital.



Table 1 demonstrates

the estimation of

workers opposite

aggregate no. of

representatives

according to Lev and

Schwartz model. The

aggregate estimation of

workers of inspected

associations is around

15crores. By table, TCS

shows the most

noteworthy estimation

of workers i.e. 87.09%

and it additionally have

most noteworthy rate

among aggregate

number of


representatives 53.9%

(17,000 workers). The

second companywhich

have most elevated

worth is Gillette India

Ltd. i.e. 4.22% quality.

In any case, the table

demonstrates that there

are a few organizations

in test that have higher

number of

representatives yet

estimation of their HR

is not higher like as

Guru Gobind Singh

Thermal Power Plant

that has utilized 11.46%

(3,620 workers)

however their human

worth is just 2.3% that

is an excess of not as

much as number of

representatives. In this

way, inspite of vast

number of workers,

estimation of human

capital is not high. The

most reduced estimation

of human capital is

spoken to by Sagar

Electricals which

utilized 0.063% workers

and their human worth


is just 0.004%.

Table 1 : Total Value of HR as per Lev and Schwartz Model

1.

Gillette India Ltd.

1,568 (4.96)

664.6(4.22)

2.

GGS, Thermal Power Plant

3,620(11.46)

373.6(2.37)

3.

HNT International


53(0.167)

6.69(0.04)

4.


190(0.60)

14.71(0.09)

5.

Ind Chenial Health Spl(P) Ltd.

900(2.85)

90.85(0.57)

6.


32(0.10)


2.98(0.018)

7.


26.0(0.82)

41.8(0.26)

8.

Nibson India Ltd.

60(0.190)

25.61(0.162)

9.


300(0.95)

33.03(0.20)


10.

Poorva Consultants

40(0.12)

14.27(0.090)

11.

Ranbaxy

915(2.89)

31.58(0.20)

12.


200(0.63)

92.86(0.59)


13.

Sagar Electricals

20(0.063)

0.69(0.004)

14.


17,000(53.9)

13,700.55(87.09)

15.


122(0.38)

18.32(0.11)


Source: Data Compiled from questionnaire

(*) The figure in parantheses is the rate of the quantity of representatives when contrasted with alternate

assets utilized by that organization.

(**) The figure is parantheses is the rate of the sum spent on the HR when contrasted with the

consumption for remaining variable of generation by the organization.

It can be induced that the estimation of HR does not rely on the quantity of people utilized or at the end of

the day, it can be said that if the quantity of representatives are higher than the quality will be higher. The

circumstance might be that estimation of HR might be higher despite less number of human capitals.

Along these lines, another component that builds the estimation of human capital is sum paid by

associations to their representatives. On the off chance that organizations pay higher sum on pay rates to

their HR then esteem will be higher, and if organizations will pay less, human capital will be low. This is

the reason, organizations have higher number of HR however their worth is not exactly the organizations

which utilized less number of representatives. On the off chance that organizations paid higher

compensations to their representatives, human capital worth is higher. Then again, the assembling

organizations are paying less add up to their representatives so their estimation of HR is less inspite they

utilized substantial number of work power.

The second reason is IT Companies utilized a large portion of the workforce at higher and center level

and pay rates at both levels are higher in contrast with lower level. The assembling organizations paid

utilized bigger workforce at lower level and pay rates at lower level is additionally less. That is the

reason; human capital worth is less in assembling than in the IT Companie.

4. Per Capita Value of Human Resources:

High performing associations so as to continue performing on a ceaseless premise must regard their

human capital as the most imperative and significant resource. They ought to regard them as grown-ups,

as accomplices and with poise and regard. As we all realize that 'Individuals who like themselves deliver

great results' and 'Individuals who create great results like themselves'. Such a solid and temperate cycle

continues forever, fulfilling the individual objectives and authoritative objectives too in the meantime, in


that the individual drives the employment fulfillment, which thus actuates him to connect for

fabulousness, finishing in the inside and out advancement of the performing associations.

Lately, India has developed from an internal looking economy to one with a worldwide introduction.

Today, the organization sends out extensive number of items to different destinations than at any other

time. Sound HR not just encourage to enhance an association's for quite some time run responsiveness

and adaptability likewise along these lines aggressiveness. Hierarchical structure methodology,

innovation and physical resources can't promise practical upper hand for an association in the period of all

around focused business environment in which organizations as well as whole item classes can vanish

over night. This is a direct result of the way that contenders can done the majority of the customary

benchmarks of achievement. HR give an association a reasonable upper hand through the production of

predominant quality scholarly resources.

Table 2 demonstrates the worth for every worker and number of representatives working in association.

TCS have the most astounding number of representatives i.e. 17,000 and esteem for every worker is

additionally high i.e. 80 lakh. The table demonstrates this is one of the greatest IT Company. After TCS,

M/s Saint Gobain have the most noteworthy worth 46.4 lakh of every representative that is high in

contrast with the quantity of workers i.e just 200 however the quality demonstrates that HR are essential

for these associations. After that comes Nibson India Ltd. what's more, Gillette India Ltd. which have

around same estimation of HR yet there is all that much contrast among the quantity of workers.



Then again, there are

numerous organizations

in which number of

representatives are high

however their quality is

low like as Guru

Gobind Singh Thermal

Power Plant with 3620

workers and per worker

worth is just Rs.10.3

Table 2: Value of HR per employee as per Lev and Schwartz Model

1.

Gillette India Ltd.

1,568

42.3


2.

GGS, Thermal Power Plant

3,620

10.3

3.

HNT International

53

12.6

4.


190

7.7


5.

Ind Chenial Health Spl(P) Ltd.

900

10

6.


32

9.3

7.


26.0

16

8.


Nibson India Ltd.

60

42.6

9.


300

11

10.

Poorva Consultants

40

35.5

11.

Ranbaxy


915

3.4

12.


200

46.4

13.

Sagar Electricals

20

0.3

14.


17,000


80

15.


122

15

Source: Data Compiled from questionnaire

5. Hierarchical Per Capita Human Resources:

Individuals are the dynamic components of the association. The achievement of an endeavor will rely on

the bore and inspiration of persons working in it. The achievement of an association relies on the

powerful and important use of men, materials and cash. Infact, business is a framework which comprises

of components and between associations between components. One can't just say that the quality

produced by a business comprises of the whole of the worth created by individual components. Esteem

emerges in light of the fact that each of the component performs different capacities and on the grounds

that these capacities interface.

HR is a key component in the creation or administrations in an association. Proficiency and benefit of a

firm is resolved to an expansive degree by the character and effectiveness of its human components.

Despite the fact that interest in physical capital might by implication accomplish some diminishing of


backwardness of the HR, the immediate and more conclusive means is through interest in individuals. A

development in information to impart the human.

Table 3 : Value of HR on per employee basis at each level vis-à-vis total value per employee


the undertakings tail somebody comparative practice advanced out of the union of the three

methodologies in view of financial worth as pushed by Lev and Schwartz, Flamholtz and Jaggi and Lew

might have all the earmarks of being an enhanced adaptation. The present worth way to deal with HRA is

still in the exploratory stage. Be that as it may, it is now required in esteeming some particular under

general acknowledged human bookkeeping guidelines. HR worth might mirror the present estimation of

future obligation of an association towards boss pay installment. It doesn't mirror the estimation of HR as

an advantage, nor does it encourage to deal with the same as a benefit as against cost in the conventional

bookkeeping hone. The expense of the wages might need to be judged in connection to the

administrations they render to get to their quality and enhance authoritative efficiency. Other than the

wages as an adjusting expense of workers, the expense of labor procurement might be no less significant.

Detailing of by and large acknowledged human bookkeeping standard is vital at this point. It may not

speak to the estimation of the HR as proposed in the chronicled cost based HRA, yet the same cost

components might need to be perceived while judging the degree of the administrations, the

representatives render to the association to mirror their quality. The quality doled out by Indian

organizations to their HR just indicates the present estimation of the expenses as for remaining

administration life of a worker in the association as opposed to their commitment that it will get from HR.

It gives the idea that the association have focused on more upon the Human capital Accounting instead of

Human Asset Accounting.

Up to this point, the endeavors made are to esteem HR and to coordinate and present their worth in the

ordinary monetary articulations. In any case, if the truth of HRA is to be determined, the idea of get ready

money related proclamations must be changed. Money related articulations must be arranged with a

perspective which depends on people. Rather than the present perspective in view of capital, the

budgetary proclamations so arranged to demonstrate the HR as advantages for be termed as human based

money related explanations. Presently, it is required under law for endeavors to keep up a different thing

in their asset report about such HR exercises attempted by them. In this way, endeavors must actualize

HRA with life and clear bearings.

The present study in light of the essential information identified with the reporting of HR. It can be

construed on the premise of various data that the estimation of HR not rely on the quantity of persons

utilized or as it were, it is redundant that if the quantity of persons are higher than worth will be more.

The explanation behind higher quality might be the sum paid to the representatives. The assembling

organizations are paying less adds up to their representatives so their estimation of human asset is less in


disdain they utilized expansive number of workforce. The estimation of IT Companies is higher on the

grounds that the pay rates at larger amount and center level are higher in connection to lower level. Then

again, specialized organizations having the less worth at lower level in contrast with the assembling

organizations on the grounds that these organizations utilized more work-power at top and center level,

that is the reason they have most elevated quality at the top level.

It can likewise be deduced that estimation of representatives is higher than deals per worker. In the event

that there is opposite circumstance, organizations need not pay much add up to their workers since they

are very little productive to get such an extensive sum. Representatives ought to attempt to enhance

themselves to expand the benefit of the organizations, else it will impact contrarily to the association as

well as to the workers.

6. Obstacles in HRA :

In spite of the fact that, the hypothesis of HRA seems, by all accounts, to be helpful, there is still absence of sufficient guidelines for the valuation of HR. The minor procedure of putting number to things can without much of a stretch be taken outside the connection of their legitimate use. It is likely that administrators will treat human quantitative information not unique in relation to quantitative information with respect to the physical plant and hardware.

The administrators might utilize HRA as a method for controlling the representative. She/he might diminish the estimation of a representative as a type of discipline or control. This might be finished by adjusting the variables like the likelihood of a representative being elevated to the following state, future additions and so on., deciding the estimation of HR. The representative's bartering force may be expanded if his/her worth was known. Be that as it may, power may be expanded if his/her worth was known.

7. Conclusion:

HRA being a rising territory in bookkeeping has more prominent potential for further research. The

model formulated as such, for the valuation of HRA, has been created in USA keeping into thought the

situations winning there. There is an extraordinary need to audit their relevance in India, a nation which is

generously confronting diverse situations.

The uncommon studies required intermittently to ascertain expense of turnover, money saving advantage

investigation of preparing and the expense of work and so on., must be a joint exertion since numerous

quality judgments and suppositions must be made and comprehended by the gets ready of information


and in addition the client. HRA has a guarantee; it has not yet met the test of utilization. A great deal

more research is fundamental before HRA can be valuable to working supervisors.

References:

Das Gupta, N.(1985), “Human Resource Accounting”, Sultan Chand & Sons, New Delhi.

Human Resource Accounting – A Study Material of Company Secretarial Practices in India.

Kothari, C.R.(1990), Research Methodology; Methods and Techniques, Wishwa Prakashan, New Delhi.

Porwal, L.S. (2001), “Accounting Theory” Tata McGraw Hill Company, New Delhi.

Rao, Prabhakar D,(1986), “Human Resource Accounting” Inter India Publication, New Delhi.

Sharma, R.K., Gupta Shashi K.(2009), “Management Accounting”, Kalyani Publishers, New Delhi.

Documents

AIRO INTERNATIONAL JOURNAL VOLUME 7 ISSN … Gautam.docx · Web viewAfter that comes Nibson India Ltd. what's more, Gillette India Ltd. which have around same estimation of HR yet