HR ACCOUNTING & HR AUDIT.pptx

HR ACCOUNTING & HR AUDIT.pptx

1. HR ACCOUNTING & HR AUDIT

2. HRA is a process of identifying, measuring and communicating information about human resources in order to facilitate effective management within an organization. Is the activity of knowing the cost invested for employees towards their : Recruitment & Selection Training & development Payment of salaries & Other benefits and knowing their contribution to organization towards it's profitability. HUMAN RESOURCE ACCOUNTING

3. To monitor effectively the use of human resources by the management. To have an analysis of the human asset It facilitates valuation of human resources, recording the valuation in the books of account and disclosure of the information in the financial statement. It is to help the organization in decision making of: Direct Recruitment Vs promotion. Transfer Vs. Retention. Retrenchment Vs. Retention Decision on reallocation of plants, closing down existing units and developing overseas subsidiaries etc. OBJECTIVES OF A HR ACCOUNTING SYSTEM

4. Standard Cost Method : It involves determining the total cost of recruiting and hiring each employee, as well as the cost of any training or development. Replacement Cost Method: It values an employee in terms of the amount it would cost the company to replace him. Opportunity Cost Method: It assigns value to an employee based on what each department would be willing to pay him. Economic Value Method: It estimate the total inflow of cash - total cost involved in the employee HUMAN RESOURCE ACCOUNTING METHODS

5. Helps the management in the employment, locating and utilization of human resources. Helps in deciding the transfers, promotion, training and retrenchment of human resources. Provides a basis for planning of physical assets (human resources). It helps employees in improving their performance and bargaining power. It helps in locating the real cause for low return on investment IMPORTANCE OF HRA

6. HR audit is a way to diagnose problems in a company’s HR department. HR audit can be done through self-assessment, internally, or can be done by hiring a professional audit company, to undertake an audit. HR audit and the subsequent HR audit report will pinpoint where there are weaknesses or risks in the HR department and help address these. HR AUDIT INTRODUCTION

7. HR AUDIT PROCESS

8. The company’s recruitment process Benefits and compensation processes Contracts and employee handbooks How employee performances are evaluated Training and education programmes HR strategy Hiring and firing practices Exit procedures MAIN AREAS IN HR

9. Provides verifiable data on the HRM functions Clarifies the HR functions Indentifies critical HR problems Improves the status of HR functions Helps review and improves the HRIS BENEFITS OF HR AUDIT