Critical Evaluation of Human Resource Accounting in a Public Sector Entity in India

Abstract

The language of business is accounting. All the business transactions are presented in books of accounts as
per the accounting rules stated under GAAP and ICAI which help businesses to function smoothly. It
focuses on reporting the effects of management decisions and provides a clear picture of the business to the
public/stakeholders. Most of the physical and financial transactions which are in monetary terms are well
accounted in the financial statement. In the past few years, research scholars opened a new discipline of
accounting that focuses on human resources and hence named it Human Resource Accounting. Human
Resource Accounting (HRA) is the practice of quantifying and reporting the cost of human resources in a
business organization. It involves measuring and recognizing the costs and benefits associated with human
capital, including recruitment, training, development, and retention of employees. This research paper deals
with the ANOVA test to prove the hypothesis considered by the author about human resource accounting in
the sample enterprises. For this study a sample of 5 public sector organizations is undertaken. The sample
companies are SAIL, BHEL, NTPC, HPCL, and MMTC. Out of the five sample organizations, except
MMTC all organizations are awarded the status of MAHARATNA by the Government of India and
MMTC is awarded MINIRATNA by the Government of India. All these organizations have adopted the
Lev and Schwartz Model with some amendments.