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ASSESSING THE IMPACT OF HUMAN RESOURCES ACCOUNTING PRACTICES ON THE PERFORMANCE OF MANUFACTURING INDUSTRIES IN NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Human Resource is a term which refers to the set of individuals who make up the workforce of an organization or a business entity. According to Syed (2009), it comprises the energies, skills, talents and knowledge of people which are, or which potentially can be applied to the production of goods or rendering useful services. The success of any organization depends on the ability of the human resources to effectively and efficiently optimize other resources such as land, equipment and money hence human resources are the greatest assets at the disposal of businesses. This is why the statement “our greatest assets are our people” is declared in most companies’ annual reports.
Human resource accounting is the process of identifying and measuring data about human resources and communicating this information to interested parties. Okpala & Chidi (2010), explain that human resource accounting relates to the quantification in monetary terms of human resources employed by an organization and assert that a well-developed system of human resource/capital accounting could contribute significantly to internal decisions by management and external decisions by investors.
Human resource is one of the intellectual assets of an organization. The new essence of human resource management is strategic. With rapid changes in the business environment, organizations are now increasingly looking at intellectual capital and by extension human resources as the unique asset that can drive superior performance. The strategic utilization of human resources can produce a constant stream of improvements in all aspects of customer value in terms of quality, functionality and timely delivery, while lowering cost at the same time, thereby achieving ‘continuous improvement’ for the organization. In strategic management accounting, the learning curve effecthelps reduce labour cost directly, while other costs connected to labour (e.g. material cost) are also incidentally reduced.
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