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 Indian Journal of Finance and Banking; Vol. 3, No. 1; 2019 

  ISSN 2574-6081  E-ISSN 2574-609X 

Research Article               Published by Centre for Research on Islamic Banking & Finance and Business, USA 

 

     1 
 

 

An Empirical Evaluation on Performance of Organization through 

Human Resource Accounting (HRA): A Study on Selected 

Corporate Units of India 

 
Atul Bansal PhD 

Associate Professor (Accounting and Finance) 

Department of Commerce, J.V.Jain College, Saharanpur (UP), India 

Email id: dr.atulbansal@gmail.com 

Mobile : +91 8899470388 

 

Preeti Sharma PhD 

Professor & Head 

School of Business Management 
University of Engineering & Management, Jaipur,India 

E-mail id:sh_preeti@rediffmail.com 

Mobile No : 7891233350 

 

Abstract 

This study attempts to analyze the importance of Human Resource Accounting (HRA) practices for corporate 

financial reporting. This paper is both a theoretical and empirical exploration, aimed to some suggestions of new 

thoughts, methods, techniques and applications of HRA. Various MNCs in the field of HRM provide different types 

of thought about the practices of personnel management with different systems and aims of financial analysis and 

reporting.  HRM has been and remains one of the most powerful and influential ideas to have emerged in the field of 

business and management. Effective practices of human resources in the accounting statement can ensure long-term 
benefits to the employees of the corporations and it also increases quality, performance, values, and commitment to 

future need. The data of this study was collected from secondary and primary sources from selected corporate units. 

Very few corporations are practically practices this concept in their accounting and financial report. Some findings 

and suggestions are addressed in the study that may be the prerequisite for organizational growth and development. 

 

Keywords:Human Resource Accounting (HRA), Indian Human Resource Practices,Lev and Schwartz model 

Effectiveness, Human Assets,  Financial Reporting 

 

1. Introduction and / or Statement of the Problem 

Human Resource Accounting (HRA) is the process of identifying, measuring data about human resources and 

communicating this information to interested parties. The major benefits of such accounting are that it develops 

effective managerial decision making, quality of management, prevents misuse of human resources, increases 
human asset productivity, improve morale, job satisfaction, performance appraisal, motivation and creativity, etc. To 

ensure growth and development of any organization, the efficiency of people must be augmented in the right 

perspective. Without human resources, the other resources cannot be operationally effective. The original health of 

the organization is indicated by the human behavior variables, like group loyalty, skill, motivation, quality and 

capacity for effective interaction, cooperation, communication and decision making. Men, materials, machines, 

money and methods are the resources required for an organization. These resources are broadly classified into two 

types such as human and physical resources. Men, otherwise known as the human resources, are considered to be 

animate resources. Others, namely, materials, machines, money and methods are considered to be inanimate or 

physical resources. Human Resource Accounting (HRA) is a new concept of accounting. It follows the traditional 

theory that all expenditure on human capital formation is taken as a charge against the revenue of the period as it 

does not create any physical asset. But modern view is that cost incurred on any asset as human resources need to be 
capitalized as it provides benefits measureable in monetary terms. Measurement of cost and value of the people to 

organizations is highly important, costs incurred in recruitment, selection; hiring, training and development of 

employees along with their economic values are very much relevant for Human Resource Accounting. All the 

processes of the organization are operated by human resource, so valuation of this resource is very necessary and 



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information about the valuation should be given to the investors, the management and others through financial 

statements. Human resource accounting is basically an information system that explains management what changes 

are occurring over time to the human resources of the business. In the early 1990s industries were recognized the 

value and importance of human assets. Skillful and specialized human resources are of vital importance for an 

organization just like its physical properties and investments. Managers of the organizations spend a lot of money 

for training and educating their workers and employees in order to increase the efficiency of the organization under 
their control, but human resources accounting system which should be used for human resources information 

processing have not been used practically by any organization. In this study, an alternative to the traditional methods 

of accounting for human worth has been proposed. The concept of Human Resource Accounting was developed to 

give management an accurate estimation of the value of people to the organization. The HRA is being developed to 

provide a system that the goals are to define present human resource value and to predict future human resource 

value to the organization. The Human Resource Accounting is an application of the technology of a basic 

management dimension return on investment (ROI) from human resources as program justification, evaluation of 

promotion policies, prediction of human asset costs associated with new construction overruns, estimation of 

personnel costs associated with adjusting of an organization and evaluation of detailing and assignment procedures.  

2. Rationale and Scope of the Study  

Management of human resources in any organizations is very much important from accounting point of view. 

Valuation of human resources, recording the valuation in accounts and fair disclosure of such information in 
financial statements are the demand of the stakeholders to enhance managerial performance and employees' 

productivity. Investment in developing human resources is not revenue expenditure. Its impact on developing the 

capability of employees provides benefits for a long period. There is a genuine need for reliable and complete 

information that can be used in improving and evaluating human resource management. HRA is actually a part of 

social accounting in which accountants need to apply their specialized abilities to help find solutions to our social 

problems. We know that accounting is a science of measurement, analysis and communication. The designing of 

proper accounting system for providing information to the stakeholders is also a difficult task. The information 

concerning human assets is more relevant to a great variety of decisions made by external and internal users. 

Accounting for human asset constitutes an explicit recognition of the premise that people are valuable organizational 

resources and an integral part of a mix of resources. This study will be helpful for the different users of accounting 

information for their day to day decision making. This study, therefore, will help to presents a critical assessment of 
the concept of HRA thereby unveiling its strengths and weaknesses. The study also presents the likely impact that 

reporting human resource as assets will have on the quality and quantity of companies‘ corporate financial reports.    

The basic premises underlying the practices of human resource accounting are:   

 People are valuable physical resources of an organization.   

 The usefulness of HR as an organizational resource is determined by the management and   

 Information on investment and value of human resource is useful for decision making in the organization. 

3. Need & Problems of HRA  

It is fact that the 21st century is era of Human demand, countries those have labor quality ruling the world with 

dominant technology. Countries like china and Japan forerunners in technology advancement, is all result of work 

force performance. Hence whole world realized that human resource is the real investment into business ventures 

that should only catch and stick the success waves. Human Resource accounting can be defined as an application of 

financial skills, and an investigative mentality to unresolved issues, conducted within the context of rules of 
evidence. As a discipline, it encompasses financial expertise, fraud knowledge and a sound knowledge and 

understanding of business reality and the working of the legal system.‖ This implies that the Human Resource 

accountant should be skilled not only in financial accounting, but also in internal control systems, the law, other 

institutional requirements, investigative proficiency, and interpersonal skills. Corporations can rely on these skills 

for developing a consistent system of corporate governance, disseminating such information within and outside the 

company, ensuring that governance policies and objectives are interwoven into the internal control system, setting 

up fraud prevention systems, and investigating any existing fraud. Human Resource is a term which refers to the set 

of individuals who make up the workforce of an organization or a business entity. The work of Bassey &Tapang 

(2012) points to the fact that human resources .have been identified as one of the main sources of competitive 

advantage by many organizations in today‘s economy. Particularly, the private sector organization is widely diverse 

and has focused on human resources as having special strategic value for organization development. Abdullahi & 
Kirfi (2012) maintain that the quantification of the value of Human Resources helps the management to cope up 

with the changes in its quantum and quality so that equilibrium can be achieved in-between the required resources 

and the provided human resources. As a result, it becomes imperative to put measures in place to effectively manage 

people with their needs and expectations to enhance Productivity. Therefore, proper appreciation of human resource 



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accounting will enable managers take appropriate decisions regarding investment in human resources. It will also 

provide comparative information regarding costs and benefits associated with investments in human assets. HR 

Accounting is very much needed to provide effective & efficient management within the organization. 

4. Aims and/or Objectives of the Study 

This study is an attempt for achievement of two major objectives of the human resource accounting practices in 

national corporations.  
4.1 General Objective: To analyze the importance of HRA in HRM decision from an organizational perspective by 

increasing the transparency of human resource costs, investments and outcomes in profit and loss accounts, balance 

sheets and investment calculations.  

4.2 Specific Objectives: The specific objectives are:  

 To analyze and evaluate the HRA plans and policies from previous literature review and applications of 

HRA in different organizations.  

 To evaluate the execution of HRA programs in financial statements and to identify the strength and 

weakness of HRA practices in the organizations.  

 To provide information to all people concerned regarding the efficiency of HR in obtaining productivity 

and profitability.  

 To facilitate valuation of human resources, recording the valuation in the books of account and disclosure 

of the information in the financial statement.  
 To provide some arguments and suggestions with a view to increasing the use of HRA in most of the 

corporations in India.  

5. Conceptual Framework  

Given the problem and the theoretical perspective for investigation of the problem, the proposal should clearly bring 

out the concepts to be used and demonstrate their relevance for the study. Besides, the dimension of empirical reality 

that needs to be explored for investigating the problem should also be specified.  

5.1 Historical Cost Method  

This method was developed by Brummet Fand W.C. Pyle. Under this method capital expenditure on human assets 

are amortized over an expected life of human assets. When employee is leaving early than unrecovered will be 

treated loss and charge to P&L A/c. However it is difficult to find out the effective life of human assets and fix the 

rate at which cost be amortized.  
5.2 Replacement Cost Method  

This method was developed by R.Likert and E.G. Flamhottz. Under this method all the cost of replacement are 

considered when an employee is replaced (i.e, recruiting, training, placing etc.) with a person of equal ability. This 

method of suggests a current value of the human assets. It is difficult to determine the replacement cost of an 

employee and replacement cost does not reflect the competence of an employee.  

5.3 Opportunity Cost Method  

This method was developed by Hekimian and Jones. Under his method opportunity cost‘s are considered as an asset 

value when the target of an alternative use. Only scarce human resources would have value at any particular point of 

time. Opportunity cost is calculated on the basis of efforts made by several organizational units, profit centers or 

departments.  

5.4 Competitive Bid Price Method  

It is developed by Hekimian and Jones. Under this method human resources are valued on the bidding cost. Only 
scarce work force or employees are considered under this method. The value of human assets is determined by 

capitalizing the total of bid prices of all the scarce employees within the company  

5.5 Standard Cost Method  

This method was developed by David Watson. Under this method standard cost of recruitment training and 

professional Growth for each grade or category of Employees are fixed and compared with actual after recruitment 

and replacement. Variance if any is charged to profit & loss account.  

5.6 Current Purchasing Power Method  

In this approach investment in human assets or workforce is converted into the current purchasing power of money 

with help of index number. It is difficult to find suitable index in the changing scenario therefore; this method may 

not be representative of actual value of human resources. 

5.7 Human Resource Accounting Practicing Companies in India  
Even though, many benefits have contributed by HRA, yet its development and application in different industries 

has not been encouraging. Because Indian 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 



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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, include:  

 Oil and Natural Gas Commissioning (ONGC).  

 Hindustan Petrolium Corporation Limited (HPCL) 

 Oil India Ltd  

 Cement corporation of India. (CCI).  

6. Human Resource Accounting in India  

There certain major issues relating to implementation of human resources accounting arises because of it try to 

attempt measure and evaluate intangible. Which are as follow? 

 Charging the expenditure incurred on recruitment, training and development of human resources to current 

period‘s profit and loss account, profit during that period are understated or losses overstated.  

 By not capitalizing expenses relating to human resource, even when they are substantial the assets are 

concealed and net worth is understated to that extent.  

 Writing of goodwill when profits are rising, accountants create secret reserves.  

 The historical cost approach to develop measures of human resource accounting uses an amortization rate, 

which provides the figure of amortization to be charge to the profit and loss account every year. But it is 

very difficult to develop norms in this regard. Physically and mentally, individuals grow and deteriorate at 

different rate. Some grow more capable as a result of their work experience, other do not. Given the 
difficulty of predicting such changes, it is even more difficult to develop a means of writing off and 

individual‘s value. So far, precise measures for amortization of human assets have not been developed.  

 Though physical assets are fully recorded under the existing system, human assets are ignored in the 

internal as well as external reports.This lead to faulty evaluation and decisions.  

 By not valuing human resources, on the principles of accounting depreciation or appreciation of human 

assets is ignored. There had been any attempt to systematically measure and report the depreciation or 

appreciation of human resource, the quality of management would certainly improve. 

7. Research Question or Hypotheses 

Traditional financial accounting considers only the fixed assets and current assets as assets and records this in the 

balance sheet of companies Annual reports, but the real asset, that is, the human assets are not taken into 

consideration.  This accounting of human asset is done in human resource accounting. In developed countries, HRA 
is very well followed and is attached in their Annual reports.   

Although, there is much research about HRA in developed countries, there is a gap in the literature on this area in 

developing and fast developing countries.  Till today many of the Indian companies do not follow the HRA.  

Therefore it is necessary to raise certain questions on the following  

 What is the nature and characteristics of HRA,  

 To examine whether HRA is useful to the management or any other users who make use of HRA, 

 How to analyze the perception of management and employees,  

 How to determine the contribution of Human resource accounting on the financial statement of Indian 

companies – Public Companies and Private Companies and  

 To know whether there is a relationship between the profitability of the company with human resource 

accounting disclosure.  

These questions are called for an in-depth analysis on HRA so as to give the awareness about HRA and make 
benefits out of human resource accounting disclosures. Hence this study is carried out. 

The following research hypotheses are framed and tested in the present study:  

 H0: There is no significant difference between the socio-economic variables and the nature and 

characteristics of human resource accounting disclosures in Indian companies.  

 H1: There is a significant difference between the socio-economic variables and the nature and 

characteristics of human resource accounting disclosures in Indian companies.  

 H0: There is no significant difference between the socio-economic variables and the ability of users of 

human resource accounting to make wise decisions  

 H1: There is a significant difference between the socio-economic variables and the ability of users of 

human resource accounting to make wise decisions.  

 H0: There is no significant difference between the socio-economic variables and the perception of 
management and employees on human resource accounting.  

 H1: There is a significant difference between the socio-economic variables and the perception of 

management and employees on human resource accounting.  



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 H0: Accounting for human resource does not improve the financial position of Public Sector companies in 

India.  

 H1: Accounting for human resource improves the financial position of Public Sector companies in India.  

 H0: Accounting for human resource does not improve the financial position of Private Sector companies in 

India.  

 H1: Accounting for human resource improves the financial position of Private Sector companies in India.  
 H0: There is no significant difference between the profitability of the company and the extent of human 

resource accounting disclosures.  

 H1: There is a significant difference between the profitability of the company and the extent of human 

resource accounting disclosures. 

8. Review of Literature 

S.No Title of article  Author  Year  Variable used  Conclusion 

1 Investigation of the Influence of 

Human Resources Accounting 

Information on Managers' 

Decision making in Social 

Security Organization of 

Khuzestan Province 

IrajIsvan 2014 There is significant 

relationship between human 

Resources accounting 

information and managers' 

decisions in Social Security 

Organization in Khuzestan 

province. 

Correlation value is positive 

and this shows that an 

increase in human resources 

accounting information can 

result In managers' decisions 

improvement 

2 A comparison of Similarities 

between Iranian and European 

Organizations in Terms of Lack 

of Attention to the Human 

Resources  

 

Mohsen 

ASGARI 

2013 The main goal of HR 

accounting is to describe 

potential capacity of the HR in 

providing financial report of 

the organization and Providing 

economical values of the 
human resource in order to 

eliminate the shortcomings 

traditional accounting. 

Based on ranking results, 

lack knowledge of managers 

about HRA is one of the 

important and essential 

reason of lack 

implementation and attention 
to HRA 

3 Problem with Human Resource 

Accounting and A Possible 

Solution  

 

Md. 

MustafizurR

ahaman 

2013 The existing models proffered 

under the HRA were 

adequately reviewed and 

objectively criticized so that 

more comprehensive could be 

developed. 

As an employee of an 

organization will not merely 

work for a single year, it 

seems rational to account for 

employee as an asset in the 

balance sheet on the ground 

that they will provide future 

economic benefit to the 

entity. 

4 The Role of Human Resource 

Accounting Information on the 
Accounting Information System  

 

Dr. Adel M 

Qatawneh 

2013 The statistical analysis showed 

that human resource 
accounting information had a 

positive impact on the AIS and 

that human resource 

accounting information has a 

significantly statistical 

relationship with AIS itself 

Human resource accounting 

information had a statistically 
significant influence for 

ability to reduce cost, 

Improve operational 

performance of through 

accounting information 

systems 

 

5 A Review of Human Resource 

Accounting and Organizational 

Performance  

 

Jacob 

Cherian 

2013 There is no legal regulation for 

accounting human resources in 

any of the organization‘s 

annual report. The main aim of 

this review is to study the 

benefits of HR practices to the 
firm. 

Human resources are 

considered as building blocks 

for any organization. it is 

necessary to identify the 

Contribution of the 

employees to the firm. Then, 
the evaluation measures of 

―human resources‖ are 

carried out. 



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6 The Role of Human Resources 

Accounting at Research & 

Development Centers  

 

MeysamEiv

azi 

2013 Human resources accounting 

will provide required 

information for the manager in 

order to find and modify any 

allocation and maintenance 

and utilization, evaluation and 

compensation of human 

resources. 

It was obvious that after all 

studies and researches 

companies may realize the 

real value of Human 

Resources Accounting. Up to 

now we found out a part of 

advantages of this resource 

including providing required 

information for different 
sections of an organization 

including financial 

department. 

7 Human Resources Accounting 

Disclosures in Nigeria Quoted 

Firms  

 

 

Augustine , 

O. Enofe 

 This study was carried out to 

ascertain the relationship 

between firms‘ financial 

performance and human 

resources accounting 

disclosures on one hand, and 

the differences in human 

resources accounting 

disclosures reporting level 

between financial sector and 
non-financial sector 

companies quoted in the 

Nigerian Stock exchange. 

Findings of the study indicate 

that financial companies such 

as banks and insurance 

companies in Nigeria are 

disclosing human resources 

accounting information than 

non-financial companies 

8 Human Resource Accounting: 

Recognition and Disclosure of 

Accounting Methods& 

Techniques  

 

 

Md. 

Admiral 

Islam 

2013 To understand the needs and 

significance of HRA inThe 

context of business 

performance measurement. To 

provide suggestions for 

developing such Accounting 

practices in our business 

enterprises. 

Human resources are the 

energies, skills and 

knowledge of people which 

are applied to the Production 

of goods or rendering useful 

services. 

9 Human Resources Accounting 

Between Recognition and 

Measurement: An Empirical 
Study  

 

Khaled 

Jamal Jaarat 

2013 researcher discussed and 

investigated the possibility of 

including the human resources 
within the definition of asset, 

and also, the possibility of 

measuring the human 

resources, and as a result 

recognizing it 

The possibility of measuring 

human resources, by using 

one of the generally accepted 
bases in Accounting that 

included in conceptual 

framework of financial 

reporting issued by IASB. 

10 Practice of human resource 

accounting in banking sector of 

Bangladesh  

 

 

Syed 

Moudud- ul- 

Huq 

2012 By the practicing of HRA an 

organization can be benefited 

in case of.a)Cost effectiveness 

b)ensuring the best use of 

human resources c)sound & 

effective basis for human asset 

control d)The productivity of 

human resources 

Bangladesh bank provides 

guidelines towards to 

practicing HRA, IASB issues 

a standard for implementing 

HRA, then the problems of 

practicing HRA can alleviate 

soon and commercial banks 

in Bangladesh may continue 
to boost the economy. 

 

Over the last two decades the idea of accounting for human resources is gaining active consideration. So, HRA is 
not a new issue in economics. Economists consider human capital as a production factor, and they explore different 

ways of measuring its investment in business, agriculture, education, health, and other areas. Accountants have 

recognized the value of human assets for at least 50 years ago. Research into true HRA began in the 1960s by Rensis 



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Likert (Bowers, 1973). Likert defends long-term planning by strong pressure on human resources' qualitative 

variables, resulting in greater benefits in the long run. American Accounting society on HRA defined HRA as the 

process of identifying, measuring data about human resources and communicating this information to interested 

parties. Stephen Knauf states that HRA is the measurement and quantification of human organizational inputs like 

recruiting, selecting, hiring, training, experience and communications. The experts in the field of HRA were Shultz 

(1960), William Pyle (1967), Flam Holtz (1973), Kenneth Sinclare (1978) and Roa (1983), etc who contributed 
appropriate methodology and correct methods for finding out the value of the employee to the organization. 

Accounting has special position and plays an important role in economic, trade and manufacturing development 

(Tomassini, et al. 1977). It is a man-made art and its principles, techniques and procedures have been evolved over a 

long period to aid business in reporting for the management and public. The four factors of production man, money, 

material and land, the last three of them are amenable to conventional accounting, but the first one, the human 

resource has not been subject to such accounting (Carme, Barcons et. al 1995).  

      9. Scope of the Research 

The study is based on analysis of the information supplied in the questionnaire. As responses have been checked 

according to the perception of the person filling the questionnaire, the probability of certain amount of subjectivity 

in the response cannot be ruled out. 

In preparing the questionnaire related to stock of human resource, labour turnover, absenteeism, age, qualification, 

grouping, earnings, own funds, total assets, HRD expenditure, net sales, profit information, capital employed etc. 
has been used.  

 In this study the meaning of accounting is taken in the sense of information system. The main focus of the 

study is to examine and evaluate the existing accounting practices in respect of expenditure on human 

resource. More specifically, the study examines the accounting treatment regarding conducting interviews 

etc. 

  The present study is a pilot project and an exploratory one conducted by an individual scholar. This study 

has not previewed all industries.  

 It is conducted among the employees of selected companies from BSE SENSEX 200.  The period of the 

study will be past 10 years. 

 The study aims to reveal whether there is any impact of Human Resource Accounting on Indian 

Companies. Hence the present study is captioned as ―Human Resource Accounting in Indian Companies‖. 
 Overall quantum of audited industries was examined.  

10. Methodology of the Research 

10.1 Study Population  

The population of this study consists of the total number of companies in the Bombay Stock Exchange Sensex (BSE 

200).  Out of which only 30 companies follow Human Resource Accounting.  Hence these 30 companies, 16 Public 

Ltd. companies and 14 Private Ltd. companies have been selected as a sample unit for the study.  

10.2 Sample Design and Sampling techniques  

The present study used convenience sampling method and opinions have been collected from managers, accountants 

and employees in the respective companies.  The companies which follow Human Resource Accounting have been 

selected as a sample unit for the study. Hence 30 companies have been selected as a sample unit for the study, 16 

Public Ltd companies and 14 Private Ltd companies.   

A pre-test has been conducted through pilot study so as to ensure the relevance and consistency of various items and 
statements in the questionnaire, inconsistent statements have been altogether dropped and others found appropriate.  

Based on the determination and allocation formula, 300 respondents have been selected as a sample size for the 

study.   

10.3 Collection of Data  

The present study has collected both primary and secondary data.  

10.3.1 Primary Data  

The primary data are collected from managers, accountants and employees of both Private and Public Ltd companies 

from the administration of questionnaire.   

11. Disclosure Relating To Human Resource Accounting 

11.1 Measurement of Human Resources 

Human beings are the dynamic elements of every organization. The success of any organization, to a great extent, 
depends upon the quality and caliber of the people working in it. In other words, human resources are the most 

important asset of an organization. Thus, in spite of all technological developments, the importance of human 

resources has in no way diminished. With the advent of scientific management, which emphasis on quantitative 



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methodology to make a most efficient use of all resources, also it includes the computation of the human resource 

capital. 

OIL AND NATURAL GAS CORPORATION 

Table-1. Total Number of Employees in ONGC during the period from 2008-09 to 2015-16 

 

Particulars     2008  2009  2010  2011  2012  2013  2014  2015  
Technical- Executive    19349  19129  18780  18361  18684  18305  18379  19110  

Technical – Non- Executive   7567  7267  7135  6368  5194  5072  3997  3452  

Total            (A)    26916  26396  25915  24729  23878  23377  22376  22562  

Non- Technical Executive   4880  4655  4526  4451  4474  4365  4638  4834  

Non-Technical- Non-Executive  8484  8301  7592  7005  6370  6068  5982  5639 

Total           (B)    13364  12956  12118  11456  10844  10433  10620  10473  

Total Number of Employees   40280  39352  38033  36185  34722  33810  32996  33035  

(Index)     100  97.7  94.42  89.83  86.2  83.94  81.92  82.01  

Source: Annual Reports of ONGC during the period from 2008-09 to 2015-16 

HINDUSTAN PETROLIUM CORPORATION LIMITED 

The numbers of employees under HPCL are classified among Management and Non- Management  

Table -2. Total Number of Employees in HPCL during the period from 2008-09 to 2014-15 
 

 Particulars     2008  2009  2010  2011  2012  2013  2014  2015  

Management     3571  3583  3594  3562  3866  4074  4094  4551  

Non-Management   7786  7630  7494  6999  6912  6817  6855  6695  

Total Number of Employees   11357  11213  11088  10561  10778  10891  10949  11246  

(Index)     100  98.73  97.63  92.99  94.9  95.9  96.41  99.02  

Source: Annual Reports of HPCL during the period from 2008-09 to 2015-16 

CEMENT CORPORATION OF INDIA LIMITED (CCI) 

The number of employees under CCI is classified among executives, supervisors, skilled workers, semi – skilled 

workers, clerical and other supporting staff and unskilled workers.  

Table -3. Total Number of Employees in CCI during the period from 2008-09 to 2015-16 
 

Particulars     2008  2009  2010  2011  2012  2013  2014  2015  

Executives     303  237  188  182  173  165  150  134  

Supervisors     445  335  206  204  199  187  176  178  

Skilled Workers    1089  762  552  577  577  580  534  388  

Semi-Skilled Workers   404  293  202  238  237  223  233  184  

Clerical & Other Supporting Staff  426  289  250  212  212  201  209  150  

Unskilled Workers    346  218  209  173  172  167  158  125  

Total      3013  2134  1607  1586  1570  1523  1460  1159  

(Index)     100  70.83  53.33  52.64  52.11  50.55  48.46  38.47  

Source: Annual Reports of CCI during the period from 2008-09 to 2015-16 

 
OIL INDIA LIMITED (OIL) 

The number of employees under OIL is classified among Technical – Executive, Technical – Workmen and 

Administrative – Executive, Administrative - Workmen.  

Table -4. Total Number of Employees in OIL during the period from 2008-09 to 2014-15  

 

Particulars     2008  2009  2010  2011  2012  2013  2014  2015  

Technical- Executive    NR  994  1264  1256  1122  

Technical – Workmen   NR  6952  5833  5426  5131  7304  7249  7127  

Total (A)     NR  7946  7097  6682  6253  

Administrative -Executive   NR  599  422  456  607  

Administrative - Workmen   NR  1020  1254  1549  1798  1172  1182  1260  
Total (B)     NR  1619  1696  2005  2405  

Total Number of Employees  9725  9565  8793  8687  8658  8476  8431  8387  

(Index)     100  98.35  90.42  89.33  89.03  87.16  86.69  86.24  

Source: Annual Reports of OIL during the period from 2008-09 to 2015-16 



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DISCLOSURE OF SELECTED VARIABLE FOR HR RELATED INFORMATION BY SELECTED 

COMPANIES. D= Disclosed ND= Not Disclosed 

 

Table- 5. Disclosure of Various Variables 

Disclosure of Variables 

Company    ONGC  HPCL  CCI   OIL   Total 
Value Added    D   D  D  ND   3 

No of Employee   D   D  D  D  4 

EVA     D   ND   D   ND   2 

Value of HR    ND   ND  D   ND   1 

Value of HR per Employee ND   ND  D   ND   1 

Value Added per Employee  D   ND   ND  ND  1 

Valuation Model Used  D   D  D  ND   3 

Discount rate applied   D   D  D  ND   3 

Age wise Distribution  ND   ND  D   ND   1 

Group Wise Distribution  D   D  D  ND   3  

Gender Wise Distribution  ND   ND  D   ND   1 

Turnover per Employee  D   ND   ND  ND  1 
Employee cost   ND   ND  D   D  2 

Total Identified Variables  8   5   11   2   26 

Table-5 shows Human Resource Accounting disclosure practices by ONGC, HPCL, CCI and OIL. The table helps 

to understand which company provides more information regarding its HR. It can be seen that CCI provides 11 type 

of information (i.e. 84.6%) out of 13 listed information. ONGC disclose the 8 type of information (i.e. 61.53 %), 

than comes HPCL, it provide the 5 type of information (i.e. 38.46%) and OIL provide only 2 type of information 

(15.38%). 

11.2 Measurement of Human Resources 

Human beings are the dynamic elements of every organization. The success of any organization, to a great extent, 

depends upon the quality and caliber of the people working in it. In other words, human resources are the most 

important asset of an organization. Thus, in spite of all technological developments, the importance of human 
resources has in no way diminished. With the advent of scientific management, which emphasis on quantitative 

methodology to make a most efficient use of all resources, also it includes the computation of the human resource 

capital. 

Table indicates the value of employees‘ vis-à-vis total no. of employees as per Lev and Schwartz model. The total 

value of employees of sampled organizations is about 15crores. According to this table, ONGC indicates the highest 

value of employees i.e. 87.09% and it also have highest percentage among total number of employees 53.9% 

(17,000employees). The second company which have highest value is HPCL i.e. 4.22% value. But the table shows 

that there are some companies in sample that have higher number of employees but value of their human resources 

is not higher likes OIL that has employed 11.46% (3,620 employees) but their human worth is only2.3% that is too 

much less than number of employees. Thus, in spite of large number of employees, value of human capital is not 

high. The lowest value of human capital is represented by CCI which employed 0.063% employees and their human 

worth is only 0.004%. 
Table-6.Total Value of HR as per Lev and Schwartz Model 

S.No. Name of Company No. of Employees Value of Human resource in Cores 

1 Oil & Natural Gas Corporation Ltd. 

(ONGC)  

33035 3,620(11.46) 

 

2 Hindustan Petroleum Corporation Ltd. 

(HPCL) 

11246 1,568 (4.96) 

3 Cement Corporation of India Ltd. (CCI ) 1159 53(0.167) 

4 Oil India Ltd. (OIL) 8387 790(0.60) 

Source: Data Compiled from questionnaire 

11.3 Per Capital Value of Human Resources 

High performing organizations in order to keep performing on a continuous basis must treat their human capital as 

the most important and valuable asset. They should treat them as adults, as partners and with dignity and respect. As 
we all know that ‗People who feel good about themselves produce good results‘ and People who produce good 

results feel good about themselves‘. Such a healthy and virtuous cycle goes on and on, satisfying the individual 



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goals and organizational goals too at the same time, in that the individual drives the job satisfaction, which in turn 

induces him to reach out for excellence, culminating in the all-round development of the performing organizations.  

In recent years, India has evolved from an inward looking economy to one with a global orientation. Today, the 

company exports large number of products to various destinations than ever before. Sound human resources not only 

facilitate to improve a firm‘s long run responsiveness and flexibility also thereby competitiveness. Table indicates 

the value per employee and number of employees working in organization. ONGC have the highest number of 
employees i.e. 17,000 and value per employee is also very high i.e. 80 lakh. After ONGC, HPCL have the highest 

value 46.4 lakh of each employee that is very high in comparison to the number of employees‘ i.e only 200 but the 

value shows that human resources are very important for these organizations.  

Table 7: Value of HR per employee as per Lev and Schwartz Model 

S.No. Name of Company No. of Employees Value of Human resource in Cores 

1 Oil & Natural Gas Corporation Ltd. 
(ONGC)  

3,620(11.46) 10.3 

2 Hindustan Petroleum Corporation Ltd. 

(HPCL) 

1,568 (4.96) 42.3 

3 Cement Corporation of India Ltd. (CCI ) 53 (0.167) 12.6 

4 Oil India Ltd. (OIL) 790(0.60) 7.7 

Source: Data Compiled from questionnaire 

11.4Hierarchical Per Capita Human Resources 
Human beings are the dynamic elements of the organization. The success of an enterprise will depend upon the 

caliber and motivation of persons working in it. The success of an organization depends upon the effective and 

meaningful utilization of men, materials and money. Infract, business is a system which consists of elements and 

inter-connections between elements. One cannot simply say that the value generated by a business consists of the 

sum of the value generated by individual elements. Value arises because each of the elements performs various 

functions and because these functions interact.  

Table 8.Value of HR per employee as per level of Lev and Schwartz Model 

S.No. Name of Company Value of 

Employee at 

Higher Level 

Value of 

Employee at 

Middle Level 

Value of 

Employee at 

Lover Level 

Value per 

employee 

1 Oil & Natural Gas Corporation Ltd. 

(ONGC)  

143.90 79.4 2.92 75.44 

2 Hindustan Petroleum Corporation 

Ltd. (HPCL) 

37.5 31.7 5.6 24.9 

3 Cement Corporation of India Ltd. 

(CCI ) 

25 9.74 7.8 42.5 

4 Oil India Ltd. (OIL) 44.9 17.5 3.3 65.7 

Source: Data Compiled from questionnaire 

The enterprises follow someone similar practice evolved out of the synthesis of the three approaches based on 

economic value as advocated by Lev and Schwartz, Flamholtz and Jaggi and Lew may appear to be an improved 

version. The present value approach to HRA is still in the experimental stage. But, it is already required in valuing 

some specific under general accepted human accounting standards. HR value may reflect the present value of future 

liability of an organization towards employer wage payment. It does not reflect the value of HR as an asset, nor does 

it facilitate to manage the same as an asset as against expense in the traditional accounting practice. The cost of the 
wages may have to be judged in relation to the services they render to access their value and improve organizational 

productivity. Besides the wages as a servicing cost of employees, the cost of manpower acquisition may be no less 

relevant. Formulation of generally accepted human accounting standard is essential at this juncture. It may not 

represent the value of the HR as proposed in the historical cost based HRA, but the same cost elements may have to 

be recognized while judging the extent of the services, the employees render to the organization to reflect their 

value. The value assigned by Indian companies to their human resources just denotes the present value of the costs 

with respect to remaining service life of an employee in the organization rather than their contribution that it will 

receive from HR.  

12. Obstacles in HRA   

Although, the theory of HRA appears to be useful, the redistill lack of adequate standards for the valuation of HR. 

The mere process of putting number to things can easily be taken outside the context of their proper use. It is likely 

that managers will treat human quantitative data not different from quantitative data regarding the physical plant and 



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machinery. The managers may use HRA as a means of manipulating the employee. She/he may decrease the value 

of an employee as a form of punishment or control. This may be done by altering the variables like the probability of 

an employee being promoted to the next state, future increments etc., determining the value of HR. The employee‘s 

bargaining power might be increased if his/her value was known. However, power might be increased if his/her 

value was known. 

13. Conclusion 
HRA being an emerging area in accounting has greater potential for further research. The model devised so far, for 

the valuation of HRA, has been developed in USA keeping into consideration the environments prevailing there. 

There is a great need to review their applicability in India, a country which is substantially facing different 

environments. The special studies needed periodically to calculate cost of turnover, cost-benefit analysis of training 

and the cost of labor etc., must be a joint effort since many value judgments and assumptions must be made and 

understood by the prepares of data as well as the user. HRA has a promise; it has not yet met the test of usage. Much 

more research is necessary before HRA can possibly be useful to operating managers. 

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