Capitalizing Human Resources In Company Management Essay

Capitalizing Human Resources In Company Management Essay Since the intellectual capital has gradually transformed into one of the most important assets valued by the companies, the system of the applicable accounting practices that refers to human resource capitalization is subject to thorough research (Guthrie, 2001). In 2003 Ken Lewis, HR Director of Co-operative Financial Services made the following statement: We believe that measuring and reporting on the contribution of our people to the business provides a tremendous opportunity to share and enshrine best practice, improving the competitiveness and performance of UK business in both national and global markets (cited in Accounting for People, 2003, p.21). The research paper outlines and analyzes the pros and cons of capitalizing human resources (HR) through human resource accounting in companys financial statements. The importance of HR capitalization The rapid development of corporate sector (in particular service-oriented companies) in the well-developed economies of the world within the conditions of the knowledge economy of the 21st century has necessitated the reconsideration of the applicable accounting practices, policies and procedures. In particular, human capital and its intellectual potential are considered as the core assets of the service companies. Many companies owe their successes, profitability and competitive advantages namely to the quality of their HR performance (Brooking, 1996). Thus, to a large extent, the successfulness of most of the service companies in almost every industry directly depends on the quality of staff they hire, retain and develop. Much of the corporate investment therefore is directed to the staff training and empowerment to ensure the high level of both individual and team performance within a company (Robbins, 2001). Many studies have so far shown that particularly service companies that capitalize their human assets are better valued in terms of return on investment thereon. In particular, the expenditures of quoted service companies on their human resources (including staff selection, recruitment, education, training, welfare, subsistence allowance and pension fund contributions etc) are better accounted for providing they are capitalized. Thus, most of the studies recommend the companies to capitalize their human resources and report all their human resource expenditures which improve the productivity and quality of companys performance (Edvinsson and Malone, 1997). Proper HR management and HR capitalization in particular are important within the gradual transformation towards the knowledge-based economy which requires the transparency of inner corporate procedures and processes that relate to the accounting of companys assets. Since the knowledge-based economies are mainly dominated by the service-oriented companies, their major assets are knowledge, skills, expertise and talented and dedicated workers capable to improve companys performance. Since HR investment enhance service companies competitive advantage, the expenditures on HR account for more than 50% of their revenues (Guthrie, 2001). The accounting of the human capital should therefore be recognized and applied in the financial reports. In accordance with the traditionally applied accounting procedures, all expenditures related to the advancement of HR intellectual development are considered as an expense (Newman, 1999). Such approach erroneously regards HR contributions as unimportant beyond the current period assuming that individual knowledge and skills cannot benefit a company in the future (Steffy and Maurer, 1988). Human Resource Accounting (HRA) as a relevant approach to HE capitalization Over the recent years the corporate sector has evidenced the introduction and development of the innovative concept referred to as Human Resource Accounting (HRA). This is largely because companies pay particular attention to their HR and perceive this intangible asset as the core factor that directly impacts their performance, profit-making and competitiveness. HRA has forever transformed the traditional approaches of the financial accounting to the value of human resources. The HR capitalization is therefore made by means of HRA which values and report HR as revenue expenditure charged to the direct costs that are incurred as a capital expenditure. Primarily, HRA identifies and reports the capital invested by companies in their HR that are currently not accounted by the traditional accounting practices. Therefore, non-traditional Human Resource Accounting (HRA) approach has been widely applied within the corporate environment to emphasize on the recognition of human resources and t he capitalization of this asset. By and large, HRA stands for the process of attributing monetary (tangible) value to human resources and its recognition as an asset in the corporate financial statements. The application of HRA in the modern corporate practice is mainly driven by the shift of HR management towards the empowerment of employees knowledge and skills. In fact, many companies value their human resources more compared to the other assets they possess since they deem that competent and dedicated individual and team performance is the key to companys success and profitability (Guthrie, 2001). Taking this into account, Kodwani and Tiwari (2007) state that contrary to traditional accounting practice, HRA is the relevant framework that objectively identifies, capitalizes, and reports the expenditure spent on HR. HRA advantages As one of the newest accounting techniques, HRA extends the traditionally applied accounting principles that match the revenues and costs to quantify the value of HR and help corporate management achieve the required equilibrium with regard to HR practices. In particular, HRA benefits corporate management, employees and financial analysts by: (1) Utilizing and planning HR as an asset; (2) Distributing available resources required for HR transfer, training, retrenchment, and promotion; (3) Evaluating the costs incurred for the training sessions for HR and the potential benefits they will bring a company; (4) Enabling low return on investment, including thee improper utilization of HR; (5) Preventing high levels of absenteeism and turnover at the workplace; (6) Assisting investors concerned about making long-term investments in companys business; (7) Comprehending and assessing the inner working environment and the potential of corporate management; (8) Improving HR individual and team performance and the bargaining power of HR; (9) Creating proper background for the effective and relevant management decisions about hiring, maintain and developing HR that would help a company reach its strategic goals; (10) Making each single employee understand their individual role and contribution in the advancement of expenditure incurred by a company; (11) Monitoring the process of HR management; (12) Aiding corporate management and the decision-making processes to further advance companys financial practices; and (12) Analyzing the appreciating human capital in a company (Roslender, 2004). HRA disadvantages On the other hand, many companies oppose HR capitalization. This is mainly due to the fact that HRA is the system that combines accounting techniques and methods that are aimed to assist personnel management while valuating knowledge, skills and potential of HR as well as their motivation to serve the corporate goals in a dedicated manner. From the financial perspective, this indicates that many companies perceive their employees as liability rather than HR. Indeed, there are various limitations which deter corporate management from introduce HRA in many companies. The apparent disadvantages of HR capitalization through HRA are as follows: (1) Absence of clear guidelines and procedures that regulate the allocation of costs required to capitalize HR in a company; (2) Impossibility of adequate HR valuation due to the uncertainty of HR existence within a company (this drawback is explained by high levels of turnover in many companies which makes it impossible to define long-term HR strategies for the future periods of a companys operation); (3) Currently applicable HR capitalization systems are featured by numerous drawbacks; (4) HR are not physical assets and therefore cannot be utilized, owned or retained; therefore corporate management in many companies fails to treat HR as definite asset (for instance, tax legislation does not recognize HR as assets); (5) Lack of empirical evidence of HRA effectiveness as a management tool applied to facilitate HR management; (6) Trade unions fear that HR capitalization will make employees demand additional compensation and rewards in line with HRA valuations; and finally (7) HR capitalization is not a subject to the universally accepted approach, and this fact alone makes its empirical implementation rather complicated. The abovementioned drawbacks prove that the current practice of accounting cannot place value on knowledge, skills and employee capabilities as they are regarded as intangible assets (Robbins, 2001). Conclusion The research has evidenced that the overwhelming majority of competitive service-oriented companies regard HR as their major asset. The nature of HR investment assumes that the core features of human capital require companies to capitalize them. Such a necessity is explained due the impact of the investment on the individual performance of the employees which can potentially benefit a companys overall success during the future accounting periods (Guthrie, 2001). Overall, service companies are better valued providing that their HR values are recognized through the capitalization of the relevant investments (Edvinsson and Malone, 1997). The spotted drawbacks of HRA, however, evidence that currently there are many procedural complications related to the HR capitalization which make many companies reject this accounting approach. Nonetheless, the findings of the recent empirical studies suggest that the quoted service companies should acquire HR capitalization methods and report their HR expenditures which improve the productivity and quality of their performance. Therefore, HR capitalization is indispensable and important component of corporate competitiveness as it benefits companies market capitalization and share prices (Adams and Roberts, 1993).

Discrimination: Health Care and Care Workers Essay

Discrimination is a form of deliberate separation. It means separating an individual due to their race and religion and segregating them from a norm in society and treating them differently. There any many forms of discrimination such as: Social class Class is a group made into 8 sections by the government to organise people’s occupation and their income starting from the lowest to the highest e.g. people who are not working and are claiming welfare benefits are classed as the ‘under class’ where as someone who is a doctor and has a higher income is classed as someone in the ‘upper class’ Class is also dependent on where individuals live. Social class segregates people in society as they are not seen as equal, the former security state for health had said people who are poor are most likely to get cancer than the rich – this statement is clearly showing that people who are in the middle class can afford private treatment and are able to live fit healthy lives and are immune to diseases whereas the working class people use free health care service and rely on free treatment in order for them to get better and are more prone to cancer because of this. Culture Culture is a way of living, it identifies individuals as they develop and adapt in the social group they are raised in during the key parts of their lives. Culture can also be one of the ways that separate individuals from each other as not everyone is brought up in the same way as other people e.g. Pakistani’s are brought up differently to people who live in the British culture as they have traditional dress wear, shalwar kameez. In a health and social care environment, respecting other cultures that come to use the service shows that workers have a clear understanding of the different cultures in the world and are able to support them and not consider them different as this could portray them as not respecting other cultures and being close minded. Sexuality Sexuality is part of an individual’s personality and should not be confused their sex. Sexuality is how an individual’s choose to behave in society in which they believe they feel comfortable in. Sexuality can also determine what opposite of sex an individual is attracted to e.g. if they are: bisexual, heterosexual and homosexual (gay/lesbian). Discriminating an individual due to their sexuality is against the law as it can lead to people believing they do not fit into society and often seek help. Gender The act Gender Equality Duty 2007 stops people being discriminated due to their gender. All services given to different genders should be equal and within employees at a work place, discriminating different genders can have an effect on the rights people have and their equal rights of access. Infringement of rights Individuals do not have the rights that they are entitled to. People have the right to freedom of speech and have certain rights in order to tackle any inequality in the environment they are in. Infringement of rights is not respecting other people’s rights in society and not letting them practice their culture, this can lead to individuals in society feel as if they are not accepting and feel devalued which can affect their health. Abuse of power Individuals have the right to empowerment where they are able to control their own lives and make their own decisions depending on the situation they are in e.g. a doctor is unable to force his patients to an operation but however, he can tell them advice on the benefits of the operation. The General Social Care Council, Code of Practise for Social Care Workers (2002) is an act which requires all individuals to work respectively and make the individual make their own decisions as care workers cannot control individual’s lives. Prejudice Prejudice is a judgment made before hand and either is positive or negative towards a person or a group. If a prejudice comment is made, it is done by beliefs and not true facts, making some harsh comments can affect an individual behaviour and emotion which leads to the act of discrimination. Most prejudice comments are based on stereotypical views of people or groups and believing that all people from the same type of group hold the same characteristics and are the same as each other which can also lead to people believing they are much more superior to them. Prejudice minds are an environmentally influenced due to their upbringing as they are scared to bond with groups they have never had contact with before. In a care home, if there is a Muslim present the carers should treat him the same as the other people in the care home with different beliefs towards the male who is a Muslim. If all Muslims are stereotypes as terrorists this can cause prejudice behaviour amongst Muslims and for them to get treated different compared to the other elderly people in the care home as the care workers believe he might be dangerous and she will not treat him as he will be a terrorist and would want him to leave the care home for the safety of others. Stereotyping Stereotyping is one of the major discriminatory acts. Stereotyping mostly comes from children as they are taught about norms and values from a young age and adults have a major influence in their behaviour towards children and what they teach their children. Stereotyping can lead to wrong assumptions about individuals and can lead to them being harmed by the workers or another individual using the service. People stereotype fat people and believe they are fat because they eat a lot where as people who are fat suffer from severe diseases which leads them to be overweight. Labelling Labelling is attaching individuals to a certain category. People who suffer from disability are put into certain categories which make it easier for people to understand what type of disability they have e.g. disabled, autism and dwarfism. Labelling can both have their pro’s and con’s as labelling people with a disability comes help from health care professionals as they can easily narrow down symptoms and help them out with the disability they suffer and give them therapeutic help. Labels can also mean treating people differently towards people who do not suffer from any form of disability as they are not seen as capable of doing many things which leads to a low self esteem as people who suffer from disability believe they only have a limited amount of things they can do and a limited amount of job opportunities and believe that they have to stick to living a life which they are not allowed to do certain things and this can also cause depression. Bullying Bullying is when an individual believes they have more power than someone else as they seem weaker and people who are bullies take advantage of the situation. There can be many forms of bullying including: cyber bullying, verbal and written bullying which can lead to distress and mental health care issues. Teenagers would suffer majority of the time due their environment. Abuse Abuse if a form of negative behaviour towards an individual which leads them to either get psychically hurt or emotionally hurt. There are different forms of abuse however some of the major abuses are child abuse and domestic violence. Any form of psychical abuse involves hitting kicking and biting whereas sexual abuse is forcing either a child or an adult to partake in a sexual activity unwillingly. Emotional abuse is when an individual is humiliated and belittled. The affects of discrimination are: Disempowerment Disempowerment is where care workers are not able to understand and value individuals and their unique stories. Care workers need to support their patient when important decisions are taking place as everybody has the right to have an equal status in any service they acquire. Care workers should never believe they have a higher status compared to people using the services as this could lead to equality. Disempowerment can make people feel less confident and less powerful. this can lead to depression and for the individual to feel disvalued in society and this can lead to further health care issues which is bad to one’s health. Low self-esteem and self-identity Is where individuals believe they have a low value in society. Individuals can have low self-esteem depending on how they are treated. In the health care service, discriminating against an individual may make the person feel vulnerable and lose their self-identify which can cause both depression and worthlessness. Health care staff should ensure that low self-esteem is raised and if self-esteem is high it should be maintained as this helps people cope with certain situations. Restricted opportunities If a person who is using the health care service feels as if they have been discriminated against, this may lead to the individual to stop using the health care service which leads to them having a poorer health. People who suffer from disability and people who are elderly suffer from restricted opportunities as not all areas have access to wheelchair users which makes them hard to use the services for their treatment which can sometimes have a major effect on their health as it can get worse. Elderly people who use the services do not get the same amount of healthcare they should as some doctors and nurses within the healthcare services they believe they are wasting both money and time treating elderly patients who are bound to be near death as they can spend more valuable time treated younger patients and give them full healthcare services. Underclass people have a disadvantage as they cannot afford to go to private healthcare services as they would not have the money for clinics s uch as BUPA and result to using the NHS. Negative behaviours (aggression and criminality) Negative behaviour is influenced by discrimination. Individuals who have had a bad past and have been living in poverty may experience discrimination which has led to a long term effect in them being violent towards police, health care professionals and teachers as they will take their anger out on people who are in a position of power, some health car professionals can lead to being attacked both verbally and physically due to their aggression. The majority of drug users are mostly aggressive and show negative behaviour whilst they are in rehabilitation. Effects on those using the service Sexuality can affect in individual if they are not treated with respect. In a hospital, if there is a male doctor and they are viewing a patient who is gay, the doctor should ignore their sexuality and continue assessing the patient. If the doctor does not want to treat the patient, this can lead to discrimination and hurt the individual and cause depression as they feel as if they are an outcast in society and they feel as they are not accepted by society as they are not seen as one of the norms in society. Although everyone has the right to health care treatment as respect, the individuals rights are not being accepted which goes against the law in society but regardless to this, some health care workers are homophobic and are not willing to treat patients who have a different sexuality. The individual will then not use the healthcare service and due to this, they would not live a healthy lifestyle as their health can worsen over the years with no daily check ups with the doctors. When a person is classed in society, they are put into different groups which can separate them from others in society. people who claim benefits and do not work are known as the underclass in society and blamed for the debt of the country as there is no adult working in the house hold and is sometimes seen bad as children should not grow in household were adults are not working as they can be easily influenced. People who claim benefits are entitled to free treatment. If a woman believes she is suffering from some symptoms of cancer, she would go hospital in order to get her tests done and be diagnosed as soon as possible, however, at a hospital, results are submitted 2 weeks later which can worse an individual’s health. Where as someone who is in the middle or upper class get private health care and results are submitted instantly and treatment for cancer is started straight away for the patients benefit. People look down on the underclass and working class and known to lead non healthy lives and are more prone to death than the upper class. This causes a division in society and people are discriminated due to their class which can lead to depression as they have to be labelled with the class, this can lead to self fulfilling prophecy as people will start to live up to their labels and cause forms of criminality in society e.g. rebelling. Individuals will become violent towards police and health care professionals and professionals are in danger of being attacked by the individual as they have not had a good past. If a doctor is forcing the individual to make the decision the doctor wants, the individual feels as if they are unable to have open options for their own life. If a patient requires surgery and the risks outweigh the benefits the doctor has no right to make the decision for them as the individual needs to understand the conditions of the treatment so they are able to think thoroughly before they agree on the decision and if they are willing to accept the risks of the operation. This is one of the reasons why the government had made laws to protect individuals and make sure they are still in power and are able to make decisions for themselves. This can of course lead to disempowerment as they feel less valued and the doctor is unable to understand them properly. In any environment, an individual has the right to have an equal status and also have the right not be to abused by any form of power e.g. a doctor forcing an individual to have the operation although there are many risks. Forcing an patient can lead to them being less confident around the doctor and feel as if they are powerless when it comes to decisions.

A Fools Guide to Of Mice and Men Essay Topics

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The Destruction Of The Mongols Across Afro Eurasia And The...

The destruction of the Mongols across Afro-Eurasia and the Black Death were the factors in which prompted the creation of the three important Islamic states. The three newly formed empires were the Ottomans, Safavids, and Mughals and they controlled regions from Southern Europe to the northern part of India. According to Pollard, â€Å"by the mid-sixteenth century the Mughals controlled the northern Indus river valley; the Safavids occupied Persia; and the Ottomans ruled Anatolia, the Arab, world, and much of southern and eastern Europe,† (Pollard, Pg. 391). The Ottoman Empire lasted the longest of the three up until the early twentieth century due to their politics, religion tolerance, and develop of commerce. The Ottoman Empire’s politics were very clever to achieve rapid success because its structure was based on adaptation and attractions. During Osman’s reign, the sultan, the empire adopted many ideologies from their adversaries to persuade people to joined their improved kingdom. In the book, Pollard explains how, â€Å"[ the Ottomans] transformed themselves from warrior bands roaming the borderlands between Islamic and Christian worlds into rulers of a settled state†¦,† (Pollard, Pg. 392). They saw a clearer vision that their laying foundations was their military might and civilian bureaucracy. Their strategy for territorial expansion across the continent was by attracting civilians to join their military. The soldiers were promised wealth for their victories earned in the