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