HRP chptr1: D. Forecasting techniques : Demand analysis identifies the future human resource 5.
D. Forecasting techniques : Demand analysis identifies the future human resource 5. Matching Demand and Supply: surplus manpower may be redeployment in other
According to stainer “hrp is the strategy of the acquisition movement & prevention of an requirements needed to maintain the organization’s mission and goals.
organizations human resources”. i. Expert Forecast (Delphi Method): a panel of experts using their judgements to
OBJECTIVES OF HRP make estimates of short-term future demands. experts are not permitted to engage
1. to ensure optimum use of human resources currently employed. in direct face- to-face contact or communication
2. to avoid balances in the distribution & allocation of human resources ii. Scenario analysis: provides multiple estimates of future Human Resource demand,
3. to assess or forecast future skill requirements of the organization’s overall objective contingent on a unique set of assumptions and circumstances for each scenario.
4. to provide control measure to ensure availability of necessary resources when required This method involves recognizing uncertainties about the future.
5. to control the cost aspect of human resource iii. Nominal Group Technique: The nominal group technique (NGT) was first developed
6. to formulate transfer and promotion policies by Delbecq and VandeVen . It can be used to help forecast Human Resource
IMPORTANCE OF HRP demand for an organization or can be used to solve other organizational issues.
1..Forcing Top Management to involve in HRM: Systematic HRP forces top management of an iv. Mathematical models:
organization to participate actively in total HRM functions ,an area that has been neglected by a. Regression: Regression analysis is a method of estimating Human Resource
most of the companies until recently. If there is active involvement of top management in the demand, but allows for adjustment of seasonal fluctuation, long-term trends,
preparation of human resources plans 2. Coping with Change : Human Resource and random movement when forecasting.
Planning enables an enterprise to cope with changes in competitive Human Resource market b. Ratio Analysis: Ratio analysis estimates future Human Resource demand
place , technology and governmentregulations. Such Changes generate changes in job based on ratios between assumed casual factors and the number of
content, skill demands and number and type of personnel employees needed.
3. Providing base for developing talents Jobs are becoming highly intellectual all over the c. . Trend analysis: Trend analysis predicts the demand for labour based on
world and individuals are getting vastly professionalized. The Human Resource manager must projections of past relationship patterns over a number of years.
use his Skill to v. Workforce analysis: Avg loss of manpower due to leave , retirement ,transfer etc
attract and retain qualified personnel within the organisation. 5. Protection of weaker section during last 5 years may be taken into account
of society vi. Workload analysis: Tries to calculate number of employees required for various
In employment sector sufficient representation need to be given to SC/ST candidates, jobs with reference to a planned output After giving weightage to
physically handicap and backward class citizen. A well conceived personnel planning factors such as absenteeism, idle time, etc
Programme would protect the interests of such groups. 6. Resistance to change There is vii. Job analysis
chance of increasing resistance among employees to change . There is also a growing 3. Forecasting Supply of Human Resources: Two sources of HR supply(techniques )
emphasis on self – evolution of loyalty and dedication to the Organisation. A sound Human ™ Internal labour supply
Resource management can predict the possible resistance from employees and to develop a. Staffing table: A staffing table provides a clear graphical view of all organizational
suitable strategies for Human Resource development. 7. Reservoir of talent 8. Prepare people jobs and the current number of employees at each job.
for future 9. Expand or contract 10. Cut cost 11. Succession planning b. Markov analysis: Transition probability matrix is developed to determine the
PROCESS OF HRP probabilities of job incumbents remaining in their jobs for the forecasting period on the basis
1.Analysis of Organizational Plans and Objectives: Plans relating to technology, production, of workforce factors
marketing, c. Skills inventory: A skills inventory is a compilation of the skills, education and
finance, expansion and diversification give an idea about the volume of future work activity. experiences of current employees.Organizations use these inventories to assess whether
2. Forecasting Demand for Human Resources: Human Resource planning starts with the current staff can meet company goals.
estimation of the number and type of Human Resource required at different levels and in e. Replacement chart: A replacement chart is used to estimate vacancies in higher
different departments. level jobs and identify how potential Human Resource supply can fill these vacancies via
The demand for human resource affects by: internal movements from lower levels jobs.
A. External challenges : a. Economic developments b. Political, legal, social and tech ™ External supply
changes c. competition 4. Estimating Manpower Gaps: Net Human Resource requirements gaps can be identified by
B. Organisational decisions comparing demand and supply forecasts. Such a comparison will reveal either deficit or
C. Workforce factors surplus of Human Resources in future.
Step 4 – Learning and Development Plans: Once the relevant candidates have been identified, 5. Preparation of job specification: Job Specification is a standard of personnel and designates
the organization must ensure that these employees have access to focused learning and the qualities required for an acceptable performance. In other words, it refers to a summary
development opportunities of the personal characteristics required for a job.
Step 5 – Implementation and Evaluation: Evaluating succession planning efforts will help to Contents: Job title, Code, Department, Education, Experience, Skill : Knowledge : Ability :,
ensure the effectiveness of the process Work factor, Age.
Mapping: Mapping means linkage between two sets of Data. It can be “One to One”, one to
JOB ANALYSIS (CHPTR 2) many or many too many.
It is the determination of the tasks which comprise the job and of the skills, knowledge, Age Group Preference:- In many organizations, a particular age group is preferred to other age
abilities and responsebilities required of the worker for a successful performance and which groups for staffing vacancies.
differentiate one job from all others. The idea of preference for a particular age group is based on following considerations:
Job analysis provides the following information: (i) Expected number of year of services.
1. Job Identification: Its title, including its code number; (ii) Professional source of supply of required manpower in future.
2. Significant Characteristics of a Job: It location, physical setting, supervision, union (iii) Personally, dynamism, initiative, challenging attitude etc.
jurisdiction, hazards and discomforts; Competency Mapping:
3. What the Typical Worker Does: Specific operation and tasks that make up an assignment, Competency Mapping is a map to display a set of competencies.
their relative timing and importance, their simplicity, routine or complexity, the responsibility It helps to describe an ideal workforce.
or safety of others for property, funds, confidence and trust; It is always done in the defined job context.
3. Which Materials and Equipment a Worker Uses :Metals, plastics, grains, yarns, milling Competency Mapping:
machines, punch presses and micrometers; a.) Workforce Skills Analysis:
5. How a Job is Performed: Nature of operation - lifting, handling, cleaning, washing, feeding, b.) Job Analysis:
removing, drilling, driving, setting-up and many others; c.) Supply and Demand Analysis:
6. Required Personal Attributes: Experience, training, apprenticeship, physical strength, d.) Gap Analysis:
coordination or dexterity, physical demands, mental capabilities, aptitudes, social skills; e.) Situation analysis:
Job Analysis Purposes and Uses Human Resource Information System (HRIS)
x Organization and Manpower Planning The HRIS is a system that is used to collect and store data on an organization’s employees.
x Recruitment and Selection HRIS encompasses the basic functionalities needed for end-to-end Human Resources
x Placement and orientation Management (HRM).
x Wage and Salary Administration : Human Resource Information System acts as a decision supportsystem.
x Training It helps managers in decision-making in respect of promotion, wage fixing, recruitment,
x Performance appraisal training and development.
x Job design and redesign The inputs of Human Resource Information System include the information relating to
x Job evaluation employees, their abilities, qualifications, potentialities, creative instincts, age, payscales, their
required skills and qualifications
Human Resource Information System (HRIS)
1. Employment-Unemployment Situation :
Job Analysis Process 2. Technological Change :
1. Organisational analysis 3. Organizational Change :
2. Selection of representative job position to be analysed 4. Demographic Changes :
3. Collection of job analysis data: it include A. Job performance B. Personal observation C. 5. Legislative Controls :
Critical incidents D. Interview E. Panel of experts F. Diary method G. Questi 6. Impact of Pressure Groups :
4. Preparation of job description: Job description is a written record of the duties,
responsibilities and requirements of a particular job. In other words, it tells us what is to be
done and how it is to be done and why.
Contents: Job title , Code , Department , Job summary, Duties, Working condition,
Reporting to .
Human Resource Accounting Approaches Human Resource Development is the integrated use of training and development,
x The Historical Cost Method: organizational development, and career development to improve individual group, and
x The Opportunity Cost Method: organizational effectiveness
x The Replacement Cost Method: The following factors may be considered as contributing to Human Resource Development
x Economic value method climate:
x Asset multiplier method 1) Top Management Philosophy: Belief in the capability of people, openness and
receptivity to suggestions from the subordinates are some of the dimensions that
contribute to the creation of a positive Human Resource Development climate.
2) Personnel Policies: Personnel policies should emphasize equity and objectivity in
appraisals. A good human resource policy should be developed for ensuring
conducive human resource development climate.
3) Human Resource Development Instruments and Systems: A number of Human
Performance Appraisal Resource Development instruments have been found to generate a good Human
Performance Appraisal is the systematic evaluation of the performance of employees and to Resource Development climate. Particularly open systems of appraisal with emphasis
understand the abilities of a person for further growth and development of counseling ,career development systems, informal training mechanisms, potential
Performance Appraisal OBJECTIVES development systems etc. contribute to Human Resourced climate.
x Compensation decisions 4) Self-renewal Mechanisms: self-renewal mechanisms are likely to generate a positive
x Promotion decisions Human Resourced climate.
x Training and development 5) Attitudes of Personnel and Human Resource Development staff: A helpful and
x Feedback supportive attitude on the part of Human Resource Development and personnel
people plays a very critical role in generating the Human Resource Development
x Personal development
climate
Performance Appraisal It's done by
Human Resource Development Climate:
1. Supervisors
Quality of Work Life
2. Peers
Quality of work life is focused generally on motivational factors such as flexibility in working
3. Subordinates
hours, autonomy and discretion in the performance of jobs and the very nature of the work
4. Self appraisal
etc.
5. Users of services
QWL means “The degree to which members of a work organization are able to satisfy
6. Consultants
important personal needs through their experience in the organization”.
Quality Circles
Performance Appraisal Process
Quality Circle is a small group activity where in a small group of employees on voluntary basis
1. Establish performance standards
meet periodically to discuss work-related problems.
2. Communicate the standards
Experience with quality Circle in Japan and elsewhere is very encouraging in terms of
3. Measure actual performance
involvement of workers in the work-related matters and psychological satisfaction.
4. Compare
Management of Change:
5. Corrective action
Management Organisational Change is a complex process.
Performance Appraisal methods
Change in organisation does not occur instantaneously. It requires considerable planning and
Confidential report, Essay evaluation, Critical incidents, Checklist, Graphic rating scale, BARS,
efforts on the part of management.
Forced choice method, MBO, Ranking, Paired Comparison, Forced Distribution, Group
Process of Managing Change include the following steps:
Appraisal, HRA, Assessment Centre
1. Identifying need for change.
, Field Review\, 360 method
2. Define the elements to be changed.
Performance Appraisal limitations
3. Planning the change.
1. Errors in Rating : (a) Halo Effect: (b) Stereotyping : (c) Central Tendency : (d) Constant
4. Assessing change forces.
Error : (e) Personal Bias
5. implementation the change.
2. Lack of Reliability 3. Incompetence 4. Negative Approach
6. Follow-up and feed back
Human Resource Development
departments , retrenchment and voluntarily retirement. Deficit can be met through Human
Resource planning ,recruitment, selection, transfer, promotion, and training plans.
Benefits
1. Human Resource Planning ensures a smooth supply of right type & right number of
employees with adequate knowledge, experience and aptitudes at all levels and at all time.
2. It identifies Human Resource gaps, if any, & helps in the implementation of corrective
action plans to avoid any loss of work or money to the organisation.
3. Human Resource Planning helps in the optimum utilization of the available Human
Resource & helps reduce any wastage.
4. HRP anticipates any future manpower gaps & motivates the employees by chalking out
plans like a career planning & succession planning.
5. Human Resource Planning also facilitate the provisions the provision of infrastructure in the
organization by giving an estimate of the future head count.
Limitations
● Projecting manpower over a period is risky
■ Can't track current and future skills
■ Seasonal trends in demand,competition,technology cant forecast
■ Absenteeism,labour turnover will impact
● Management may weedout labour
● Increased workload
● Its time and effort involved activity with no tangible and immediate gain
● Excessive focus on quantitative aspects
Guidelines for effective HRP
x Coordination ● Objective
● Top management support
● Employee skills inventory
● HRIS
Succession Planning: “The process of ensuring a suitable supply of successors for current and
future senior or key jobs arising from business strategy ,so that the careers of individuals can
be planned and managed to optimise the organisation’s needs ad individual’s aspirations”
Succession Planning PROCESS
Step 1 – Identifying Key Positions or Key Groups: Two criteria considered are criticality and
retention risk. By examining these criteria on a low-to-high scale, an organization can
determine what positions require short- or long-term plan
Step 2 – Identifying Competencies: All positions demand set of knowledge, skills and abilities
that are expected of employees who are filling that function. Thus, knowing the competencies
of a job is a mandatory component of recruitment. However, succession planning provides an
opportunity to review the competencies traditionally associated with jobs, particularly with
respect to current goals and objectives
Step 3 – Identifying and Assessing Potential Candidates : The objective of identifying and
assessing employees against core job competencies is to help focus their learning and
development opportunities in order to prepare them for future roles in the organization.
Job design
"Job Design is the process of deciding on the contents of a job in terms of its duties and
responsibilities, on the methods to be used in carrying out the job, in terms of techniques,
systems and procedures, and on the relationships that should exist between the job holder
and his superior subordinates and colleagues."
Job Simplification: Work or job simplification is the process of removing tasks from existing
roles in order to make them more focused. The objective of work simplification is to develop
improved work methods that maximize output while minimizing expenditure and cost.
Job Enlargement: Job enlargement means increasing the scope of a job through extending the
range of its job duties and responsibilities generally within the same level and periphery.
Job Rotation: Job Rotation is a management approach where employees are shifted between
two or more jobs at regular intervals of time in order to expose them to all.
Job Enrichment: It's providing opportunities for achievement,recognition,
responsibility,advancement and growth.
Total quality management (TQM) is the continual process of detecting and reducing or
eliminating errors in manufacturing, streamlining supply chain management, improving the
customer experience, and ensuring that employees are up to speed with training. TQM can be
summarized as a management system for a customer-focused organization that involves all
employees in continual improvement
Elements of Total Quality Management
ު Ethics ު Integrity ު Trust ު Training ު Teamwork ު Leadership ު Communication ު
Recognition
Human Resource Accounting
“Human Resource Accounting is the process of identifying and measuring data about human
resources and communicating this information to interested parties.”
- American Accounting Society Committee on HRA
“Human resource accounting is the measurement of the cost and value of the people for the
organisation.”
- Eric Flamholtz of university of California
Human Resource Accounting Objectives
x Enable management to monitor
x Find appreciating or depreciating
x Assist development f effective management
x Provide cost value information
Human Resource Accounting Advantages
x RECRUITMENT AND PLANNING
x PROVIDE FEEDBACK
x JUDGING A COMPANY
x APPROPRIATE DECISIONS
Human Resource Accounting Limitations
x Not easy to value HR
x Lots of measurement problems
x Opposition from union
x No evidence
Strategic Human Resource Development practices
Strategic Human Resource Development Practice is a holistic framework encompassing
developmental fundamentals and initiatives.
Strategic Human Resource Development fundamentals are those components of Human
Resource Development , which have to be strong enough to ensure a congenial atmosphere in
an organization for implementation of Strategic Human Resource Development initiatives.
Some Strategic Human Resource Development fundamentals
• Compensation • Working Condition • Family Welfare • Human Resource Development
Department
Strategic Human Resource Development initiatives
• Training • Performance Appraisal • Job environment • Career Planning • Communication •
Involvement and Empowerment
Manpower Planning
1.Analysing the current manpower inventory 2. Making future manpower forecasts 3.
Developing employment programmes 4. Design training programmes
Career Planning
1.Identify individual needs and aspirations 2. Analysing career opportunities 3. Aligning needs
and opportunities 4. Action plan and periodic review.
CAREER MANAGEMENT (CHPTR 3)
It is concerned with the provision of opportunities for people to develop their careers in
order to ensure that the organization has the flow of talent it needs and to satisfy their own
aspiration.
Career management process:
1. Self assessment:
Employee responsibility: identify opportunities and needs to improve.
Company responsibility: provide assessment information to identify strength, weakness,
interests and values.
2. Reality check:
Employee responsibility: identify what needs are realistic to develop
Company responsibility: communicate performance evaluation, where employee fits in
long-range plans of the company, changes in industry, profession, and workplace.
3. Goal setting:
Employee responsibility: identify goal and method to determine goal progress
Company responsibility: ensure that goal is specific, challenging, and attainable; commit
to help employee reach the goal
4. Action planning:
Employee responsibility: identify steps and timetable to reach goal
Company responsibility: identify resources employee needs to reach goal, including
courses, work experience, relationship
Career planning: it is the process of designing and implementing goals, plans and strategies to ¾ Advancement in position and condition of the employee, etc.. Quality of work (QWL): it refers to the favourableness or unfavourableness of a job
enable the organization to satisfy employee needs while allowing individuals to achieve their Career planning steps: environment for the people working in an organisation.
career goals ¾ self assessment :it revolves around the thoughtful consideration, reflection, and x Job specification
Career dynamic: it a wide variety of factors influence the nature of a person’s career choice, evolution of your interest, personality characteristics, values, and skills through variety x Job security
the direction their career takes and their ultimate success and satisfaction they experience of method. x Health and well being
over the duration of their working life. ¾ Exploration and research: it is all about being in information gathering mode. This is the x Work and non work life
11 Tips for successful career planning time to explore, collect, and organize all available resources to eventually beign x Competency development
1. Take a look at your past times and hobbies: you should also take time to examine the analyzing then to see what top option Scope of qwl:
activities you like to do when you’re not working. your hobbies and leisurely pursuits ¾ Decision making: it is the step of the career planning process is when you put all the 1. Compensation
can give you great insight into future career paths. peice of information carefully collected career information together as best as possible 2. Health and safety
2. Note past accomplishment: Reviewing your past accomplishments can trigger a career to produce as list of career related goals and option. 3. Job security
shift you’ve been planning. It will allow you to accomplish types of things that make you ¾ Taking action: it is the one of those things that’s easier said than done. This stage is 4. Job design
most happy. about literally being proactive with your career plans and following through with what 5. Social integration
3. Trace your path till the last career planning: spend time mapping out your job or career you’ve decided on doing. 6. Social relevance for work
path. Do it from the last time you did any sort of career planning. It will help you plan ¾ Evolution: after you have made career related decisions and indentified your goals, 7. Better career oppurtunities
for the future. keep in mind that many of the folks who achieve career success are the one who Principles of qwl:
4. Likes and dislikes, needs and wants: make a list of your likes and dislikes, needs and continually evaluate and assess their status. They keep track of their career progress 1. The principle of security
wants. Reflect on your current path and career path. If your job and career fall under throughout work. 2. The principle of equity
like you know that your still on the right path. Organisational responsibility: organizational career planning has a critical role in attracting, 3. The principle of individualism
5. Plan your career annually: schedule a break every year or often if you feel the need for developing and maintaining the staff. Without organization’s involvement in establishing, 4. The principle of democracy
career change. Block out all distractions so you have time to focus on your career. This supporting and strengthening the careers of its employees it cannot achieve the expected Techniques for improving qwl:
way, you will feel more secure in your career choice and direction. results at both organizational and individual level. 1. Job redesign 4.flexible work schedule
6. Look for transferable skills: you should have certain set of skills. Categorize yourself in Individual responsibility: responsibility of employee for career planning- theoretically, the 2. Career development 5.participative management
terms of these skill set than become too focused just on job title. career planning process focuses particularly on employee’s skills, abilities, needs and 3. Autonomous work groups 6. Job security
7. Research further career job opportunities: picturing yourself in the future is an effective aspirations. Given all these, the employee creates basic information essential for ensuring How to improve qwl
way to plan your career. Do not be afraid to look beyond to other possible careers. preparedness for a possible promotions. x Fair and equitable remuneration
8. Set career and job goals: set short term and long term goals. Adjust those goals as your Talent management: it is the attraction, selection, and retention of employees, which involves x Reasonable stability of employment
career plans progress or change. You should develop new goals once you accomplish a combination of hr processes across the employee life cycle. It encompasses workforce x Employee health and safety programmes
your previous goal. planning, engagement, learning and development, performance management, recurring, on x Alternative work schedule
9. Never stop learning: information always lead to power and success. Don’t miss chances boarding, succession and retention.
x Participative management or self managed teams
to learn and grow more as a person and worker. You should go beyond passive Succession planning: it is strategy for passing on leadership roles- often the ownership of a
x Recognition of employees as human being
acceptance of training opportunities to finding new once that will help enhance or company- to an employee or group of employees. Also known as “ replacement planning”, it
x Grievance procedure
further your career. ensures that business continue to run smoothy after a company’s most important people
x Management of employee stress.
10. Review career and job trends: you should be able to see where job growth is expected move on to new opportunities, retire, or passaway.
Total quality management (tqm): it means a continuous process of improvement in all aspect
especillay in your career field. Besides having knowledge of these trents, you can also
of an organisation with the involvement of every body.
have the power to adjust and strengthen your position. HRD CLIMATE (CHPTR4)
Tqm features:
11. Have regular check-ups: any health-conscious individual knows that the best route to It is the perception that the employees have about the policies, procedures, practices, and
long terms health is to have regular check-ups with their doctor. conditions which exist in the working environment. x Customer satisfaction
Importance of career planning: Work culture: is a collection of attitudes, beliefs and behaviours that make up the x Internal customers
¾ Clear direction and road map for future environment. Healthy workplace cultures align employee behaviours and company policies x Continuous process
¾ Opportunity to analyze individual capacity, with the overall goals of the company, while also considering the well-being of individuals. x Management by facts
¾ Support for designing career goal, Goo work culture: it is one where the employees are continuously encouraged to work as a x Team work
¾ To develop the life as true, meaningful and purposive life, team, have each other’s back, and bring the best outcomes in every project.
¾ Motivation and morale
¾ Grooming the potentialities

TQM and human resource and management strategy: HR ACCOUNTING (CHPTR 5) Advantages of historical cost method:
i. Develop collaboration between management and trade unions for implementing tqm x This method is very easy to calculate the value of human resource.
ii. Train people in the principles and techniques of tqm Human resource valuation and accounting: x Employers and employees can easily understand this method
iii. Identify the requirements for successful use of tqm techniques HR valuation: it means the identification and measurement of the value of human resources x This method follows the traditional accounting concept of matching costs with
iv. Guide work team in quality improvement and then supplying this information to the interesting parties. It is sometimes also defined as a revenue
v. Design and develop communities system for the lunch of tqm method of assigning value to the employees on the basic of their future economic services to x Return o the company’s investment in human resources can easily be calculated by
vi. Institutionalize management ethics the organization. this method
vii. Adopt selection process for conceptual, technical and human skills that support a tqm HR accounting: it is the process of assigning, budgeting, and reporting the cost of human Disadvantages of historical cost method:
movement resources incurred in an organization, including wages and salaries and training expenses. x Under this method it is very different to estimate the service period of an employee
viii. Upgrade quality awareness within the orientation courses Objectives of HRA x In this method rate of amortization is very difficult to determine.
ix. Redesign appraisal systems to fit with tqm philosophy x Measuring cast related to the human resource of the organization x As we know, the value of assets decreases with an increasing number of years or
x. Assist in the preparationof amount tqm report x Enabling management to properly plan and budget for training and other services for the amortization. But in case of human resources, it is just the opposite. The utility of
xi. Assess the effectiveness of tqm infrastructure and systems human resources. employees increases with the increasing experience and training provided to them.
xii. Condut quality and ethics audits x To ensure proper utilization of resources is done or not 2. Replacement cost method: it is that cost which is incurred on replacing the existing
Quality circle: it is a small group of employees from the same work area which meets regularly x Increasing awareness and value about human resources human resource by an identical one i.e. human resource capable of rendering similar
to identify analyse and solve quality and other work related problems. x To proper accounting of retiring benefits and other benefits over the service period services.
Basic objectives of quality circle: Advantages of hra: Advantages replacement cost method:
1. To contribute to the improvement and development of the organization. 1. Information for manpower planning x This method estimates the present value of human resources. this method is very
2. To develop respect for human relations and induce job satisfaction; and 2. Information for making personnel policies logical and representative
3. To deploy human capabilities to the fullest extent and drawn their infinite potential. 3. Utilization of human resources x This method can easily adjust the human value of price trends can provide real
Advantages of quality circle: 4. Proper placements value at the time of the rise in price
1. Generation of creative ideas 5. Increases morale and motivation Disadvantages of replacement cost:
2. Improvement in productivity 6. Attracts best human resources x the identical replacement of an employee is not always possible to find
3. Better team work 7. Designing training and development programs x the cost of replacement the human resource is inconsistent with traditional
4. Higher motivation 8. Valuable information to investors accounting system based on the cost
5. Development of problem solving skill Limitations of hra: 3. Present and economic value method: under this methods value of a human resource is
Disadvantages of quality circle: 1. There is no specific guideline for measuring the cost and value of human resource calculated on the basis of the contribution made by the employees in the organization till
1. Lack of positive 2. While valuing human assets, demand for rewards and compensation might be higher their retirement. The payment due to the employees in the form of pay, allowance, and
2. Lack of participation 3. The nature of amortization to be followed is yet to be fixed
benefits etc. Are the estimated and then discounted to arrive at a present economic value
3. Lack of education Methods of hra: (4 methods)
of individual
4. Delays in implementation 1. Historical method
Advantages of economic value method:
5. Operational problem 2. Replacement cost method
x Employee’s career movements are taken into account under this method
Conditions for making quality circle effective: 3. Present value method and economic value method
x The possibilities of employees leaving the organization other than death or
1. Top management support 4. Asset multiplier method
retirement are also considered
2. Education and training of managers and workers 1. Historical method: under his method, the sum total of all the costs related to human
Disadvantages of economic value method:
3. Timely implementation of ideas generated by quality circles resources is calculated to find out the value of human resources. These cost include the
4. Sharing gains in productivity with workers cost of recruitment, selection, training, placement, and development of human resources x The service tenure of an employee is very difficult to estimate
5. Facilities for meetings and discussions of an organization x The value of expected services data is very difficult to find
6. Regular monitoring of working of quality circle kaizen. Types of historical cost method: x Estimation of employees chance of occupying various positions for each employee
Acquisition cost: it means the cost which is incurred on acquiring the human resources is no an easy task
in the organization. The cost incurred at the time of recruitment, selection, and x Valuation of the contribution of services from employees is also not easy to judge
placement, etc. x To estimate the exit probabilities and changes from one position to another is an
Learning cost: it means that cost is incurred at the time of providing training and expensive process
development to the employee and managers. 4. Asset multiplier method: here multiplier refers to instruments that relate personal worth
of human resource to the total value of the organization
Employees of the organization are divided into 4 categories:

x Top management
x Middle management
x Supervisor
x Clerical employees
Asset multiplier reflects following factors:
x Technical, qualification, and experience of employees
x Experience required for the jobs
x Personal qualities and attitude
x Loyalty and expectation of future
Advantages of asset multiplier method:
x This method is simple and easy to understand
x Data for calculation is easily available
x Multipliers used in this method are different for a different group of employees
Disadvantages of asset multiplier method:
x This method considers factors like motivation, employee’s attitude which are
difficult to quantify
Manpower cost: the cost of labour is the sum of all wages paid to employees, as well as the cost
of employee benefits and payroll taxes paid by an employer. The cost of labour is broken into
direct and indirect costs.
4 methods for cost control of hr:
1. Mbo 4. Personnel reports and budget
2. Ratio analysis
3. Personnel productivity
HRA INDIA:
The Companies Act 1956, does not provide any scope for showing any information about human
resources in financial statement. Due to the development of business and industries, some of
the Indian companies, both public and private, value their human resources and report this
information in their annual report. The companies, who are presently reporting human assets
valuation includes:
x BHEL
x SAIL
x ONGC
x Oil India ltd
x PEC
x MMTC