Human resource accounting is a concept that was created to deal with the problem of the measurement of the value of human capital. This concept can be very influential for many different human resource practices. This concept is of the utmost importance as it deals with one of the biggest problems within the sectors of accounting and human resources, the constant seeking of an acceptable way of acknowledging human capital in the financial statements as an asset and not as an expense. The skills and knowledge that people can bring into a company are vital for its prosperity and yet no realized. Hereby identifying the similarities and differences in the decision-making factors of HR managers between traditional accounting and human resources accounting (HRA) focused organizations, we want to examine the perceptions of managers who work under both types of organizations. Therefore, the research question we have formulated is the following: What are the similarities and differences between the decision-making processes of HR managers of Traditional accounting and Human Resource Accounting focused organizations? The field of HRA is not new. It is approximately 70 years old, but progress in it has stopped for a while now. The problem besides that is that it is not accepted by international accounting principles. However, nowadays more and more companies try to find a way to allow them to use HRA. In this paper, we have managed to interview HR managers that are currently working under HRA or traditional accounting practices. We selected HR practices in which HRA can have a strong influence so that we can understand and examine how it influences the decision-making process of the managers. The choice of Patterson´s model was based on the fact that it contains four HR practices (recruitment and selection, training and development, retention and turnover, and performance management), in which HRA has a strong influence. Overall, our findings showed us that when it comes to recruitment & selection, and retention & turnover there are more differences between HRA-focused and traditional accounting-focused organizations than in the practices of training & development and performance management. The main difference in recruitment and selection is that HRA-focused organizations make decisions based on measuring the total cost and value of their resources; in training and development the main difference is that HRA-focused organizations calculate the cost of learning by HRA; in retention and turnover, the main difference is that HRA focused organizations can calculate and forecast all cost have already spent and need to spend for replacement an employee, and finally in the performance management the main difference is that HRA focused organizations take into serious consideration the job level of their employees in contrast to traditional accounting focused ones. This offered us the chance to develop a suggested framework. It is based on Patterson’s model but also includes our findings. Finally, we believe that this paper has the possibility to contribute in many different ways. For example, it can be used as a manual from HR managers in order to help them see and understand the differences and similarities between HRA and traditional accounting and extensively manage to focus on the important factors for each respective practice. Moreover, the findings could contribute to the general evolution of HRA, as this paper is one of the few that have approached the HRA concept via qualitative research.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:umu-185004 |
| Date | January 2021 |
| Creators | Sarker, Nivedita, Koilakos Chouzouris, Georgios |
| Publisher | Umeå universitet, Företagsekonomi, Umeå universitet, Företagsekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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