Quality and quantity of assets present in an organization can specify its position in the prevailing market. One such precious asset is human resources. Putting these assets of the organization on the balance sheet is a new trend. But carrying out this process efficiently and effectively is a difficult task which requires a strategy-focused approach. KPIs can be a good way to perform this task.In this context, four perspectives can be considered. These are: - HR costs; HR investments; HR outcomes; and some other Strategic factors.HR costs perspective specifies the overall costs incurred on human resources and includes KPIs such as acquisition costs, remuneration, manpower planning and cost of non productive hours. Next perspective, i.e. HR investments, considers that skills and abilities of the employees are the key to competitive advantage and that they can be enhanced by making planned investments. Specific areas of investments include information systems, education & training, succession planning and insurance.HR outcomes can be known by looking at revenues, number of on-time deliveries, employee turnover, and yield. Improvements in these parameters can be attributed to a sound HR accounting plan.Factors such as client satisfaction, market share, product and process quality, and strategic achievements can be grouped together under the strategic perspective in which each factor has its own importance.These indicators can be arranged in a balanced scorecard and utilized by any organization to effectively and efficiently calculate the cost and benefits associated with their human resources.
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HR accounting is concerned with valuing the Human assets possessed by a given organization. Further, these are then listed on the balance sheet under the 'assets' head. However, coming up with numbers that can be assigned to this category is a tough task in itself. On of the major difficulties relates to the 'qualitative aspect' of the topic.
One of the methodologies by which this act of HR valuation can be successfully and easily established is the usage of KPIs (Key Performance Indicators) in the job. These remove the 'qualitative' fraction in the thought-process as values and numbers gain a higher importance in the subject. This lends the results a more solid and substantial ground for making decisions and conclusions.
Moving on, calculating the value of human resources is increasingly gaining acceptance as HR can be taken to be the strongest pillar on which an organization rests; thereby making its evaluation an almost obvious task.
Further, improvements can be carried on by looking at the various factors and perspectives involved such as 'motivation level', 'loyalty', 'skills' etc. One can quantify these by using a 'scaling method' and ensure 'by regular analysis' that values are always favorable.
Various methods for calculating human resources asset are available, one can choose any of the suitable ones.
This is the actual scorecard with HR accounting Performance Indicators and performance indicators. The performance indicators include: hr costing and accounting, hr costs, acquisition costs, remuneration, manpower planning costs, cost of non productive hours, hr investments, education and training, succession planning, insurance, information systems, hr outcomes, high revenue growth, on time delivery, employee turnover, increase in productivity, strategic achievements, client satisfaction, market growth, product and process quality .
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