Human resource accounting: a need for relevance

MOST OF THE CRITICISM OF HUMAN RESOURCE ACCOUNTING (HRA) HAS FOCUSED ON ITS INABILITY TO PROVIDE MEANINGFUL MEASUREMENTS. THIS SEEMINGLY UNRESOLVABLE PROBLEM STEMS FROM A LACK OF SHARP SPECIFICATION OF THE PURPOSES FOR WHICH HRA WOULD BE USED. RECRUITING AND PLACEMENT DECISIONS, SPECIAL TRAINING PRO...

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Bibliographic Details
Published in:Strategic finance (Montvale, N.J.) N.J.), 1977-03, Vol.58 (9), p.33
Main Author: Tsay, Jeffrey J
Format: Magazinearticle
Language:English
Subjects:
Human resource accounting
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Summary:MOST OF THE CRITICISM OF HUMAN RESOURCE ACCOUNTING (HRA) HAS FOCUSED ON ITS INABILITY TO PROVIDE MEANINGFUL MEASUREMENTS. THIS SEEMINGLY UNRESOLVABLE PROBLEM STEMS FROM A LACK OF SHARP SPECIFICATION OF THE PURPOSES FOR WHICH HRA WOULD BE USED. RECRUITING AND PLACEMENT DECISIONS, SPECIAL TRAINING PROGRAMS DECISIONS, AND TRANSFER DECISIONS ARE EXAMPLES FREQUENTLY ENCOUNTERED IN HRA THAT ILLUSTRATE THE MUTUAL DEPENDENCE OF MEASUREMENTS AND DECISIONS. NONE OF THE DECISIONS CAN BE PRUDENTLY MADE WITHOUT APPROPRIATE MEASUREMENTS FOR THE FACTORS INVOLVED IN THE DECISION. A MEASURE USEFUL FOR ONE TYPE OF DECISION MAY NOT BE RELEVANT FOR ANOTHER. FOR EXTERNAL REPORTING, ACCEPTING THE POSITION THAT HRA'S PURPOSE IS TO INFORM USERS OF THE FINANCIAL POSITION AND OF THE RESULTS OF OPERATIONS OF THE COMPANY, WITH AN EMPHASIS ON PERFORMANCE MEASUREMENT, SUGGESTS THAT THE HISTORICAL COST MEASURE IS THE MOST APPROPRIATE.
ISSN:1524-833X