CHAPTER 16

Accounting for human resource management

Session objectives

Justify overall HRM strategies, policies and plans in relation to desired organisational outcomes Review the effectiveness and cost-benefit aspects of all HRM processes Appreciate the value of both quantitative and qualitative measures in the evaluation of the effectiveness of HRM

Assess the success of HRM functions and tasks Modify all the above, as required

Session objectives (cont.)

Approaches to HRM accounting

Original cost – accumulated HR costs

Replacement cost – $ value of replacement

Opportunity cost – maximum value of employee in an alternative use

Economic value – value of employee in terms of likely future earnings

Indicators of HRM performance Workforce planning Human resource development Employee health and safety Equal employment opportunity Industrial relations Recruitment and appointment Performance appraisal Staff attendance

Employee wastage and turnover

Costs of wastage:

Separation costs

Replacement costs

Training costs

Exit interviews Reasons for departure

Relationships with supervisors

Fairness (pay, training, career development and performance appraisal)

Working conditions

Likes and dislikes

Communication issues

Suggestions for improvement

Employee attitude surveys

A qualitative method of gathering information about employee levels of

satisfaction

Use of EAS questionnaires

Planning the survey Designing the questionnaire Administering the questionnaire Analysing the data Taking appropriate action

Auditing HRM Evaluate effectiveness of HR functions Ensure compliance with laws, policies, regulations and procedures Set guidelines Promote change and creativity Assess HRM’s contribution to goals Upgrade HRM Improve quality of HR function and staff Focus HR staff on important issues