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Describe the phases in the design and implementation of a Human Resource Accounting System.

Describe the phases in the design and implementation of a Human Resource Accounting System.

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It is seen that different organizations may be small or big needs different kind of human resource accounting capability. There are further five phases in designing followed by implementation of the accounting system:

HR Accounting Objectives:

The HR accounting objectives arise because of management’s requirements from HR information.
  • It furnishes cost/value information for making management decisions about acquiring, allocating, developing and maintaining human resources in order to attain cost-effectiveness.
  • It allows management personnel to monitor effectively the use of human resources.
  • It provides a sound and effective basis for human asset control, that is, whether the asset is appreciated, depleted or conserved.
  • Proper management of human resources.
  • Improvement of human resources.
  • Depicting the true value of the organization.
  • Provides quantitative information on human resources which helps the managers and investors in making decisions.
  • HRA communicates the worth of human resources to the organization and to the public.

Developing Human Resource Accounting Measurements:

Much of the work on accounting for human resources focused primarily on development or validation of HRA concepts. The traditional practice of treating all expenditure on human capital formation as an immediate charge against income is not consistent with the treatment accorded to comparable outlays in physical capital. Costs should be capitalized when they are incurred in order to yield future benefits and when such benefits can be measured.

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Developing Human Resource Accounting Database:

Cost data, time data, time sheet, psychological measurement etc. forms the data base. The accounting needs to be classified on the basis of recruitment, Training, Management development etc. The database also needs to be included to non-financial information such as employee attitude. survey feedback as standard ongoing basis.

Pilot Testing the System:

Pilot testing involves having a group of end users try the system prior to its full deployment in order to give feedback on features and functions. The level of pilot testing you want to perform depends on the size and scope of your migration project. For larger projects, a formal, carefully planned pilot is essential. For any size project, its good to have selected end users test the system prior to full deployment.

The items included in planning a pilot test are adequate training for participants, a plan for deploying the servers and preparing systems for the pilot, documentation of the installation process to improve it as more is learned, a mechanism, such as a Web site or e-mail alias, for users to provide constant feedback to the design and testing teams and finally the evaluation criteria for the pilot, including information about the number of users who were dissatisfied, the numberĀ  of problems reported, the number of support calls and requests, and the improvement rate for problems.

Implementing the Human Resource Accounting System:

This is the ultimate phase which involves -standardizing the input output documents, forms etc.and making the employee familiar with the new system.

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July 12, 2019
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