Why the concept of human resource costing and accounting does not work A lesson from seven Swedish cases

Why the concept of human resource costing and accounting does not work A lesson from seven... 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Personnel Review Emerald Publishing

Why the concept of human resource costing and accounting does not work A lesson from seven Swedish cases

Personnel Review, Volume 28 (1/2): 17 – Mar 1, 1999

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Publisher
Emerald Publishing
Copyright
Copyright © 1999 MCB UP Ltd. All rights reserved.
ISSN
0048-3486
DOI
10.1108/00483489910249018
Publisher site
See Article on Publisher Site

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.

Journal

Personnel ReviewEmerald Publishing

Published: Mar 1, 1999

Keywords: Costing; Grounded theory; Human asset accounting; Management control; Organizational learning; Sweden

References

  • Current development in human resource accounting: reality present ‐ researchers absent?
    Gröjer, J.E.; Johanson, U.
  • Human resource replacement cost numbers, cognitive information processing and personnel decisions. A laboratory experiment
    Oliver, J.; Flamholtz, E.
  • Human resource accounting: a critical assessment
    Rhode, J.G.; Lawler, E.E.
  • The use of natural resources
    Van Raij

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