Why the concept of human resource costing and accounting does not work

Abstract

Despite a promising outlook in the 1970s, it has been claimed that human resource costing and accounting have progressed at something less than snail’s pace over the past two decades. This is largely due to difficulties in the application of the concept. In this article several extant studies regarding the application of HRCA are classified and exemplified. The idea is to increase our knowledge of how implementation of the concept could be achieved from a management control perspective. Most managers in the majority of studies hold very positive attitudes towards HRCA, but the integration of HRCA in the management control process has never been really attained. In seven Swedish case studies, the inhibiting factors in the implementation process of HRCA are compared. The lesson is that training, information, reward, target setting and cultural systems have to be worked actively to overcome inhibiting factors when trying to implement HRCA. Efforts should focus on: (1) knowledge of human resource costs, values and outcomes as well as how to calculate these; (2) top management demand as well as other elements in the reward system; (3) HRCA target setting; and (4) openness for change.

Assessing financial impact of maritime ergonomics on company level: a case study

“…due to lack of relevant input data (Rose and Orrenius 2007). Other causes reported are lack of cross-functional interaction between different actors, absence of top management demand and the lack of specified targets in this area (Johanson 1999). Further, the methods not being incorporated into the company's standard management system is also a barrier.…”

“…Some of the issues that need to be addressed are what level of ambition the ergonomics work and the financial estimation of ergonomics a shipping company should have. This can vary, depending on company need and resources and range from delivering arguments on an ad hoc base, over providing opportunities for learning and support decision making, to a complete revision of management and control systems (Johanson 1999).…”

A Human Resource Perspective on Intellectual Capital

“…In spite of initial enthusiasm, there is significant hesitation to implement concepts such as HRCA (Johanson 1999). Even after decades of experience, these concepts are far from accepted (Gröjer and Johanson 1998).…”

The Application of Intangible Asset Accounting and Discretionary Policy Choices in the Uk Football Industry

“…Interest in reporting human resource accounting measures for external financial reporting peaked and foundered in the 1970's (Flamholtz, 1985;Scarpello & Theeke, 1989;Johanson, 1999). Its movement from conceptually attractive proposition to application faltered on issues of asset recognition, as a controlled future economic benefit, and the lack of reliable measurement bases.…”