Human Resource Management By Dr. Debashish Sengupta

Human Resource Automation, Audit & Accounting 17 CHAPTER Human Resource Management

Key Terms Accommodator Assimilator Converger Diverger Honey & Mumford Learning Styles Richard M Felder and Eunice R Henriques Human Resource Management

Automation The automation of human resource management relates primarily to Human resource information System (HRIS). “Systematic procedure for collecting, storing, maintaining, retrieving, and validating data needed by organization about its human resources, personnel activities and organization unit characteristics”. Human Resource Management

HRIS HRIS represents a marriage between traditional forms of human resource management and information technology. The objective of automation is to make processes faster, cheaper and more efficient. It covers aspects like: 1. Payroll 2. Work Time 3. Appraisal performance 4. Benefits Administration 5. HR management Information system 6.Recruiting/Learning Management # Training System 7. Performance Record 8. Employee Self-Service Human Resource Management

Benefits & Pitfalls of Automation According to Society for Human Resources Management - “60% – 80% of an HR staff time is tied to repetitive administrative tasks. Much of this time is spent answering employee & manager questions and gathering information for reports.” Automation helps HR to get rid of the repetitive administrative tasks that it has to do, making it free to engage in strategic HR issues that benefit the organization more and bring more value to the business. Human Resource Management

Audit “Involves devoting time and resources to taking an intensely objective look at the company’s HR policies, practices, procedures and strategies to protect the company, establish best practices and identify opportunities for improvement” The HR audit shall include evaluating: 1. Job Analysis 2. Recruitment 3. Selection 4. Performance Management 5. Performance Appraisals Human Resource Management

Rationale of Audit A very famous watch-manufacturing company ventured into eye-care business. They needed, besides other staff, optometrists at every eye-care retail outlet, across the nation. A good optometrist is a vital link between the company and the customers. Many times it is the optometrist who coverts a potential to an actual customer. The company had a very good hiring team in place and was confident that it would be able to hire very able personnel for their eye-care division as well. Human Resource Management

Approaches to Audit Legal Approach to HR Audit The audit of performance or conformity consists of .making an inventory of the social situation of the company, considering the labor law norms and regularly verifying the company’s compliance with the applicable regulations. Benchmarking Approach The benchmarking approach to HR audit is primarily oriented towards continuous improvement in HR systems, policies and processes to deliver more value to the employees. Human Resource Management

Methods of Calculating HRA Basically HRA can be calculated through two methods—cost-based analysis and value-based analysis. Cost approach - The cost-based approach focuses on the cost parameters, which may relate to historical cost, replacement cost, or opportunity cost. The cost component entails from the time the recruitment begins and ends when the employer terminates the services of the employee. The cost of acquiring talent, engaging, training and remunerating is calculated at various levels. Human Resource Management

HRA at Infosys Infosys has estimated the value of its human resources of 91,187 employees, including both delivery and support staff at Rs 98, 821 crore for fiscal 2008. This represented a growth a 72 per cent growth over the previous year’s Rs 57, 452 crore, when the company had a headcount of 72,241 employees. The IT major has used the Lev and Schwartz model to compute the value of its human resources. Human Resource Management

Education Index The company reported a substantial jump in the education index of its employees for fiscal 2008 at 2,51,970 up from 2,03,270 in the previous year, reflecting the rising quality of its employees. The average age of the Infosys employees stood at 26 years in FY07, the same as in the previous years. Human Resource Management

Is HRA Useful? The issue of Human Resource Accounting has always been debated hard and there have been arguments both in favour and against regarding its practical utility and effectiveness. Argument in Favour of Human Resource Accounting The various arguments favouring human resource accounting are: 1. HRA helps to justify human resource as assets in an era of knowledge-based economy. 2. Attaches numerical monetary-equivalent to the true-value of human assets in an organization. Human Resource Management

Arguments against Human Resource Accounting As far as the statutory requirements go, the Companies Act, 1956 does not demand furnishing of HRA related information in the financial statements of the companies. Some of the limitations to human resource accounting are: 1. Absence of demonstrated usefulness. 2. Lack of evidence of HRA from financial viewpoint. 3. Lack of commonly accepted norm regarding intangible assets. Human Resource Management

Future of Human Resource Accounting The future of human resource accounting shall be strongly determined by the research that is done in this field. Considerable research is required in this area to sort-out various anomalies that exist in its practice. For the time-being it serves certain advantages but has less practical utility. Human Resource Management