HRA 021

HUMAN RESOURCE ACCOUNTING

PREPARED BY:
Stephine Opiyo Obong’o

Sunday, August 16, 2020

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Topic 3 – Lesson 4 - Developing Results Based Approach
In result based approach, the aim of the organization is to achieve some results based on a well -
founded philosophy of the organization. This approach provides a framework for strategic planning,
implementation, performance monitoring and evaluation and close risk assessment and management.
The primary focus of all this is to ensure efficiency and effectiveness which can be achieved through
organizational learning and development and through responsibility sharing and accountability. The key
success factor is involvement of all the stakeholders in defining smart objectives and expected results,
assessing the risks, careful implementation, monitoring and evaluation of progress and providing
corrective measures on deviations and integration of new lessons.
In a result based framework, the questions how, what, why and by who should be very clear. Successful
implementation also depends on the organizations ability to create a culture that focus mainly on
results. Organizations have to establish values and behaviors that support achievements of results
and find as much as possible ways of avoiding undesirable culture such as law-balling, inflating results
and failure to take responsibility when results are not achieved. The greater the difference between the
existing culture and that of a results-oriented culture, the more effort it will require to ensure that the
correct results are achieved.
Guidelines to developing a result based approach:
Establishing development intervention framework: the organization should undertake a thorough
review of the mission, vision, goals and objectives which act as pillars guiding the course of action and
the monitoring and evaluation framework. Before firming up any course of action, a thorough analysis
of all courses of action is desired to ensure choices made are likely to afford the organization maximum
benefits. The organization must also ensure that there is a robust governance structure, clear allocation
of tasks and responsibilities and where possible execution authority.
Establishing a relationship framework with stakeholders: identification of the stakeholders is
important as it helps in understanding of stakeholders needs and enhancing their participation. It also
helps stakeholders to understand the results chain and articulate their expected results to enable proper
course of action to be taken. Finally, it also helps answer stakeholder’s expectations such as Why?
What do we Want? For Whom? And How? And when.
Design a risk management plan: it is important to have a clear sight of the possible risks and where
possible analyze them in terms of possible occurrence, impact and possible mitigation framework. The
risk analysis should also include coming up with assumptions and alternative courses of action where
the risk exposes extreme danger for continuity under the stated framework.
Establish a review plan: the success of human resource program or activities depends on a
continuous monitoring and evaluation mechanism. A robust monitoring and evaluation of programs at
an early stage enables the organization to identify deviations and to put in place corrective mechanism
before problems are out of reach. Mechanisms such as performance measurement, audit and
evaluation of requirements should be put in place and clearly established to support step by step review
thereby providing an opportunity to identify deviations and possible malpractices. Performance
indicators should also be identified and measurement plans put in place. The cost of performance
should also be established in advance.

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Develop a performance measurement and reporting framework: the organization should develop
a clear data collection instruments and tools. There should be a clear methodology on data collection
framework and performance targets should be set in line with the company objectives. All data including
risk data should be collected. An analysis framework should then be established to help generated
informative decisions. The data so collected should be capable to support analysis and fulfil both the
internal and external reporting requirements.
Ensure stakeholders involvement in performance appraisal: performance appraisal like objective
setting should involve stakeholders with interest on the program. This will ensure that all the
stakeholders are able to identify the shortcomings impacting on their performance and seek for a design
and development of solutions. Involvement of stakeholders also enhances organizational learning.
Result based approach can only be achieved where adjustments are made on a timely manner to the
deviations which are likely to impact on the results.
A result based approach is a cause effect relationship, a step by step approach to developing a result
based program is outlined later in the chapter. At every stage in the result chain interest should be in
identification of deviations whether negative or positive and analyzing them to provide corrective actions
or to take advantage of the positive outcomes to enhance the programs performance.
The purpose of measurement and evaluation
Measurement: Measurement is the process of collecting data or information in numerical form. The
information or data collected in numerical form provides an easy process of manipulation, analysis and
conversion which allows comparisons. In measurement, numerical values are assigned to any item or
object that is to be measured. Measured data or information have to be quantitative in nature. In order
to achieve the desired value and support effective decision making, the measurement must be accurate
that is, the instruments used to measure must afford the quality or capacity of accuracy. It must also be
reliable and at the same time it should be valid and objective in nature.
Measurement therefore is the assignment of numbers to an event or an object characteristics or
features which can be compared with other objects or events and thereby allow some decisions to be
made. Depending on the area of study, measurements can have multiple levels and include nominal,
ordinal, interval and ratio scales. Measurement is the pillar of many disciplines and organizational
activities. It also allows for ease of exchange as it allows value attachments which can be objectively
agreed upon.
Evaluation: as discussed earlier, measurement allows the next important exercise to be undertaken
which is evaluation. Evaluation is a systematic process through which an assessment is made to the
set objectives, goals, or standards in follow up to the design, implementation, improvement, or
outcomes of a program. The aim of evaluation is to assist in the assessment of an objects merit or
worth. Through measurement, the interested parties afford the capacity to understand and know the
extent to which the objectives are being achieved.
By its very nature, evaluation is a systematic process through which an assessment is undertaken in a
continuous way to enable identification of the strengths, and weakness of a plan upon its
implementation. Through evaluation of the program outcomes against the plan, reality is established
which facilitate the need for correction measures to be put in place. Through this process, important
information is generated that is crucial for decision making.

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It is however important to note that measurement and evaluation are not isolated activities but rather
are continuous throughout the organization life. The process of measurement begins with setting of
objectives and policy framework and evolves over time. At different stages in the progress of activities,
different measurements are undertaken. It therefore forms a cycle which runs throughout the life of an
organization as the objectives set are implemented, measured, evaluated, new information generated,
new decisions are then made and implemented and the cycle continues.
What then is the purpose of measurement?
For the purpose of our study, measurement is important since it support the organization at large and
human resource function specifically to assess the contribution of human resource programs on the
organization results. As discussed earlier, in the result based approach, human resource function is
interested in evaluating the impact of the programs implemented. Human resource intention is to
enhance its contribution to organization productivity and performance. Since there are a number of
human resource programs, the human resource manager would be concerned in the process of
allocating resources to ensure resources are allocated to programs which provided optimal value to the
organization. Presented below are some of the values derived from effective measurements in the
organization:
1. Measurements enable the placement of activities, tasks, objects and items in their respective
places in a program.
2. Measurement enables evaluation of achievements as it forms the basis of judging the
implementation of objectives.
3. Measurement also facilitates research and development.
4. It enhances accountability as the stakeholders are tasked to account for deliverables in a
project or program.
5. Measurement enables prediction of future performance as it provides a basis for making
future strategic decisions.
6. Helps identification of gaps and problems in the program.
7. Helps in determination of the appropriateness of a program.
Measurement is important as it enables placement of activities, tasks and objectives in their respective
position in the program. To undertake measurement, you have to think through the various tasks and
this process will enable an understanding of misplaced tasks or object. It will therefor enable
realignment to be made. Further, before an evaluation exercise is conducted, measurement provides
data that is important to undertake an evaluation exercise. As discussed earlier, evaluation is conducted
through an assessment of set objectives, goals, or standards this therefore enables the understanding
of whether the implementation is enabling the organization to achieve its desired results or meeting its
objective.
It is through measurement that an understanding of the elements of a program is drawn when the
evaluation practice is eventually undertaken. Where there are gaps or challenges, there is a trigger
then to understand the challenges or where there are opportunities, there arises a need to put in place
mechanisms to take advantage of such opportunities. This calls for a research to be undertaken to
realize the benefits. Further to this, measurement also enhances accountability. Once the stakeholders
are challenged to measure the program activities it gives a chance for evaluation to be conducted. This
automatically triggers the need for accountability on the part of the stakeholders since they will be called

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upon to explain variations. As such measurement enhances the accountability of human resource
programs.
Strategic planning is important for every organization that wants to remain competitive in every business
environment. Through measurement, organization establish a database which enables an analysis of
the program’s effectiveness and thereby provides the basis for strategic planning. Further, there are
many human resource programs in organization. Through measurement, it becomes easy for the
organizations to determine the appropriateness of human resource programs and as such enables a
choice of which human resource programs have the greatest contribution on the organizations results.
The most important objective of human resource is to ensure effective utilization of resources in all
aspects in the organization. Resources are scarce and human resource should be in the fore front to
ensure optimal resource utilization. Human resource therefore should work towards ensuring that all
the human resource activities are aligned to the overall goal and objective of the business. Common
practices in human resource management have failed to demonstrate the value of human resource
activities in the overall achievement of business goals. Human resource capital strategy should be
subordinate to and align to the overall business strategy. Every human resource practice such as
discipline, performance management, training among others should reinforce learning, enhance
motivation, encourage positive culture, and encourage regular attendance among others. An effective
process for identifying measures provides a means to ensure vertical and horizontal alignment of
human resources activities to support the business strategy and reinforce one another.
There exists a strong link between people, policies, processes and practices and the manner in which
the organization implement and manages these aspects. The extent to which there is fairness and
equity in the administration and implementation of the policies and procedures on people has a positive
influence on their productive efforts in the organization. Human resource measurement attempts to
track and evaluate the impact of people practices on the recruitment, development, performance and
engagement of people in issues that impact on the organization and its performance.
Measurements are very critical in analyzing the relationship between people and their contribution to
the organization. To ensure positive results, it is important that the organization has in place mechanism
to understand and manage people contribution to organizational results. Important questions such as
whether people poses the ability, motivation, and opportunity to accomplish their job should be
answered by the necessary human resource measuring tools.
Developing suitable human resource measures and an effective measurement and management of
human resource is essential for organizations to understand and maximize the contribution of their
people. Effective measurement will also enable the organization to understand which HR activities are
most or least effective in delivering results for the organization. Human resource should therefore make
decision of investing where they will get optimal value of the costs they incur. Further, effective human
resource management and measurement process should capture the relationships between human
resource policies, people, practices, employee engagement, capability, behavior, and all these different
elements. Measures should track the links and causal relationships between these elements to enable
them to be managed effectively.
The need for evaluation in human resource management.
Evaluation in human resource management is important not only for providing data on the variance
between the plans and the actual outcomes or results. As discussed above, measurement provides

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data for human resource evaluation. When human resource evaluation is conducted properly, an
understanding should be established not only with the focus on the explicit costs of human resource
programs. Ideally, human resource programs in real sense normally have far reaching effects beyond
the actual program intended outcome. For example, training besides improving skills of employees to
enable them perform effectively on their roles may also change their behavior. This will also have an
impact on discipline which in turn will mean that the number of disciplinary cases in the organization
will drop. As this happens, employees become more and more confident on their tasks and as such
feel happy and are motivated to do their work, they become committed as the organization results are
achieved and the organization is able to reward them appropriately. All this are interdependent and an
effective implementation of one program may have a huge multiplier effect on the overall performance
of the organization. In conclusion, human resource program evaluation supports the business:
1. Determine future investment needs in human resources.
2. Improve human resources effectiveness to the organization.
3. Identify and diagnose weakness in human resource processes, programs or projects.
4. In the improvement of plans in the process of implementation before issues are out of hand.
5. Identify and align needs of human resource business strategies
6. In building of intellectual capital of the organization.
7. In making decisions to stop doing what is ineffective.
8. In enhancing accountability to shareholders and ensures employment and management
accountability.
9. In enhancing motivation of employees.
10. Enable reflection and improvement of the overall climate and health of the organization.
11. Improve the human resource image within the organization.
12. Undertake an assessment of the return on investment of a human resource program.

HR evaluation myths
Formal evaluation is a comprehensive and systematic approach towards measuring, documenting and
communicating the value of human resource in the organization. This evaluation helps in the
determination of the quality of the human resource activity used in the past, the activity that is to be
implemented and also allows the consideration of alternatives available thereby enabling an
assessment of both financial and non-financial impact. Human resource activity may include
recruitment, benefit system, feedback mechanism, disciplinary process, performance management
among many others. The evaluation of the activity supports the decision makers in in determination of
the value of the activity and also in decision making which may include:
1. Modification of the existing activity.
2. Expansion of the existing activity.
3. Elimination of the existing activity.
4. Selection of alternative activity that will be more efficient in the accomplishment of pressing
business objectives.
A common activity in evaluation is the monitoring and documentation. Mostly the focus in human
resource with respect to documentation and monitoring has been in respect to time taken to accomplish
an activity, whether the activity has been accomplished within the target and within the set budget
relative to the goals that were set for accomplishment of the activity. To determine whether it was on

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target, one would then be interested in examining progress against the goals such as decreased
turnover, increase in customer satisfaction, reduced absenteeism, increased sales volume among
others determinable effects or impacts. On the extreme though, a more rigorous evaluation would go
beyond such issues to those which were not foreseen at the design stage. It should for example foresee
issues such as program being more time consuming than appropriate for the intended users which
depict unforeseen cost with respect to time.
Further, on the highest level, an evaluation should consider the organizations strategic goals. This is
referred to as strategic evaluation of an activity to determine its fit and contribution towards
accomplishment of strategic goals. The evaluation should therefore answer the question of whether the
program represent the most cost effective use of the available resources to produce outcomes with the
greatest possible strategic value to the organization and its stakeholders.
However, despite the stated benefits of evaluation, there still arise a number or roadblock preventing
organizations from undertaking result based approach to decision making. Most organizations have in
their history commonly held beliefs, culture and value systems about the impossibility of undertaking
proper evaluation and research thus preventing decision makers from using formal evaluation and
resorting to informal methods which are prone to bias, judgement, error, subjectivity and myopia. Failure
of a program is more not on the design but on the misplaced expectations out of a variety of myths
about evaluation process.
Human resource evaluation myths include but are not limited to the following:
1. It is impossible to measure.
2. There are too many variables to do a good study or make a good conclusion of the cause
and effect.
3. No one is asking for the evaluation so why bother with the evaluation anyway.
4. Evaluation is important only to justify existence.
5. Negative results from the activity will hurt the activities continuity.
6. Evaluation is expensive
7. Evaluation is time consuming
8. There is no need for evaluation if human resource staff are not motivated to undertake
evaluation.
9. Evaluation is only important when there is need to compute return on investment.
10. Top management does not require evaluation and as such it should not be undertaken.
Many managers believe that it is impossible to measure a number of human resource activities. Truly,
human behavior is often very difficult to measure, however it is a misconception that it is impossible to
measure. A number of measures may be sophisticated such as employee satisfaction, customer
satisfaction among others. But to measure them requires a more understanding of the organizations
culture, values, and norms among others. Challenges managers run into is that they do not see how to
measure and as such assumes they cannot be measured. The truth is that the more sophisticated the
evaluation, the more skills will be needed to understand the evaluation methodology and thereby to
measure the activity.
Managers also always feel that there are too many things that affect a particular goal or an activity itself
that it is therefore not possible to measure the effects of the activity against the goals. Example is on a
question, how would training impact or cause employee satisfaction? Truthfully, when measuring

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certain aspects of behavior, there is no 100% guarantee on the cause and effect relationship. However,
this challenge can be overcome through an implied comparison say of the outcomes of different sets
of groups trained at different points in time by close assessment and monitoring of the desired results
such as performance on pre and post training. The outcomes of the experiment groups’ performance
can therefore be attributed to the program when there is a difference in the performance between the
experiment group and the control group.
Equally, an assumption that no one is asking for the evaluation and the outcomes of the human
resource activities has also been a pitfall. Today’s business environment has changed significantly and
every section, department and functions are required to demonstrate their contribution to the
organizations bottom-line. An assumption that no one is asking has also clouded the need for
evaluation. Important to note is that there is always room for improvement and without evaluation the
business is not in a position to learn the challenges impacting progress. The business may also be left
with the blind assumption that everything is moving on well and is therefore effective. The danger of
lack of evaluation is that even a well performing activity is in danger of being cut out during difficult
situations in the business life cycle where there is no evidence on documented impact to the business
performance. The purpose therefore is not to assume that programs expected to work well will work
well but to undertake a proper evaluation to ensure every detail is properly documented to provide room
for implementation.
Many human resource managers may also conduct evaluation but hide the results to avoid bad news
from spreading. Political considerations are thought to sometimes outweigh the need to know the truth
about the actual performance of an activity. Many resources therefore end up being committed into
activities with little or no benefits to the overall business strategy and goals in the name of fearing to
hear the bad news. In the long run however, the poor performance ends up reflecting very badly on the
person or function concerned.
In many cases also, there has been misconception that the only need for evaluation is to justify
existence. Conversely, this may not be the case. Functions such as human resource have been in
existence for many years and will continue to be in existence. Measurement and evaluation are
therefore not geared towards justifying existence but should go to the extent of demonstrating the
contribution of the function. The extent to which human resource is able to demonstrate its existence
will not only enhance its existence but will also enhance the reputation of human resource and also
enhance top management commitment to human resource programs. Time has come when
organizations should stop focusing on actions such as reduction of head count as sole measures of
navigating difficult times. Human resource has the capacity to demonstrate the contribution of its
programs and justify how the programs can support in turning around organizations in times of
difficulties.
The misconception that evaluation is an expensive undertaking is by no means a misnomer. During the
development of a human resource program, the evaluation program should be developed and the
evaluation criterion should be prat of the design. Unless the evaluation is undertaken, there is no way
of assessing the value of the program. Failure to identify whether the program is value adding or not
may be too expensive as the business may continue investing in a program that has very little
contribution. Equally, there will be no chance of identifying problems areas which may impact on
contribution.

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It is true that evaluation can be a time consuming exercise. However, the cost of not undertaking an
evaluation exercise can be far reaching. As explained earlier, it can lead to continuing programs that
are not adding any benefit to the organization or whose contribution to the organization result are
marginal. The most time-consuming activities in human resource evaluation involves recording. To
improve the time saving in evaluation exercise, planning and implementation information needed for
evaluation should be tabulated by clerical staff. This will ensure that the incremental time required to
collect the required information is greatly reduced.
To enable effective measurement, human resource professionals should be able to clearly define their
expected results. Sometimes, the lack of motivation by human resource professionals stem from fear
of the evaluation outcomes. The evaluation may present weaknesses, problem areas or inefficiency. It
is therefore important to ensure that human resource professionals understand clearly the importance
of evaluation and also understand evaluation as human resource responsibility.
It is true that in the past, top management did not put a lot of pressure on human resource as a function
hence there was no need for evaluation. There was no emphasis for the human resource to
demonstrate their contribution to the organizational results. The current environment has changed and
top management has constantly challenged human resource to demonstrate their contribution. Without
data to show contributions, top management will make their own judgment about human resource
contributions and this judgment may be based on inaccurate perceptions. The situation is rapidly
changing as top managers continues to challenge all staff to show their contribution. The demand
enhances accountability especially during difficult economic times.
It is always not true that every human resource program must be evaluated only to depict the return on
investment. Human resource programs may be internally or externally driven. For example, most of the
government regulations such as compliance with WIBA and OSHA Acts are externally driven. From
that point, a cost benefit analysis in terms of ROI may not be feasible or still, their results may not
influence any decision to the organization yet they may still have to be implemented. As such, it is
sufficient to implement a new program or service because it is needed by government or that
management wants it. In these cases, it makes little sense to calculate ROI. An important question
about economic feasibility should always be asked: Should we spend much time and money to evaluate
such programs. Sometimes though an evaluation may be needed to demonstrate how the program is
impacting on other human resource and business programs.
Obstacles to measuring contribution
Human resource contribution has become a source of concern in many organizations today. The trends
in the business environment brought about by globalization, diversity in the work place, enhanced
contribution, ever changing technology among others have shifted the focus to human capital as a
source of competitive advantage. Human resource contribution therefore has become a major source
of concern transcending beyond the primary focus of human resource function as a cost center to a
drive in emphasizing the contribution of human resource to the organizations bottom-line. This shift has
therefore enhanced the need for measurement of human resource contribution.
A range of barrier have been identified relating to development of acceptable measurement framework
and the implementation of such framework. Some of these challenges are environmental yet others are
process oriented. Human resource contribution is a factor of the cost and the benefits accruing to the
organization in relation to such costs. While it is generally easy to identify such cost to some extent,

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identification and quantifying the benefits is fairly complex and in some cases is seen as a subjective
undertaking. Perception such as there is possibility of knowing the cost and a danger of knowing or
failure to keenly identify the value. Further, the challenges relating to evaluation are not only related to
the myths in human resource evaluation. A good number of evaluation obstacles are related to the
organization capacity to undertake an effective evaluation. Discussed below are some of the barriers
to effective measurement of human resource programs.
1. Historical perception of human resource within the organization
2. Lack of top management support and commitment
3. Reluctance to invest in technology
4. Inadequate analytical skills and knowledge.
5. Perceived relevance and credibility of measures
6. Lack of knowledge of different human resource measurement models.
7. Inadequate investment of resources in terms of money and finances
8. Inappropriate design of human resource program
9. Inadequate communication
10. Fear of evaluation
11. Lack of standards
Historical perception of human resource within the organization has a big impact on attempts to
determine its contribution. Many organizations viewed human resource as a cost center and thus had
no contribution to the organizations bottom-line. Resistance in human resource as a function to
demonstrate their contribution has also been a major obstacle with managers failing to appreciate the
changing dynamics of business environment and how human resource stands in a critical position in
supporting organization in achieving competitive advantage. Further, business units have also in the
past failed to appreciate human resource support in enhancing their contribution. In many cases, when
business fail they tend to apportion blame to the ineffectiveness of human resource programs. On the
other hand, when business functions succeed again they fail to apportion the success to human
resource programs that added value to them. This aspect of attribution has therefor impacted the
partnership relationship between business functions and human resource function hindering effective
measurement of human resource contribution.
Very critical in any organizations activities is the top management support. Human resource programs
like any other program or project in the organization requires top management support. The more the
top management support the contribution of human resource management the easier the measures
can be enhanced and reviewed as they become critical part of information for strategic planning as well
as decision making. Top management appreciation of measures enhances their effectiveness which
becomes the driver for measurement development. In many cases, top management commitment is
normally absent due to lack of full understanding of human resource programs and their potential
contribution to organizational results. Lack of understanding of the role played by human resource in
performance is therefore a great barrier to achievement of top management support. Human resource
accounting presents this opportunity through a framework of demonstrating actual contribution of
human resource as a platform for enhancing top management understanding of human resource
programs contribution.
Technology is key in modern day organization in supporting not only the collection of data but also
providing an easy way of analyzing the data, and generating information that support decision making

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and strategic planning. The use of human resource information system supports data collection and
dissemination of information to a wide group of employees thereby enhancing information sharing.
Inadequate technology therefore hinders effective measurement. Organizations should strive to have
in place a good human resource information system as a starting point towards appreciating the value
of measurement and contribution of human resource.
Generally, measurement requires analytical skills to be able not only to collect data but also to analyze
the data collected to generate information. Information adds value to the strategic contribution of human
resource. Lack of skills in analytical techniques therefore present barriers in that human resource work
become deficient of the capacity and critical knowledge of conversion of human resource program
components into measurable units. To achieve effectiveness, the impact of human resource should be
measured, targets set in quantifiable measures, evaluations conducted to allow identification of gaps
which can then be focused on for improvement. All this require analytical skills and deep knowledge of
the human resource programs to be achieved.
The relevance and credibility of measures also pose the challenge for measuring contribution. Human
resource managers and practitioners have in the past failed to demonstrate the relevance of measuring
contribution not only to the employees but also to the other business function. Human resource as a
function should be able to develop all the programs highlighting not only the objectives but also the
impact on the bottom-line and all the stakeholders including employees. For example, the goal of
training is to improve employee’s skills and knowledge allowing him capacity to perform better. The
impact of such training should then be tracked on the pre training period and post training. Such
performance can thereafter be tracked into the organizations performance. Once the human resource
is able to demonstrate such benefits to business function their value will be increased. Since every
business function always have an objective on contributing to the bottom-line, the clearer the
contribution is demonstrated the more the business will be supportive in the adoption of the program.
Many organizations have not adopted the modern human resource measurement models. Inadequate
investment on technology and resources that enable easy data collection, recording, summarizing,
analysis, and conversion of data present human resource with a challenge. Heavily, organizations
depend on the balance score card as a way of presenting performance requirements to a wide range
of employees. Most often, these score cards are generic and fail the test of breaking down requirements
to the simplest units for data collection. Again being considered as a cost center, many organization
focus on activities geared towards ensuring cost reduction and enhancing cost efficiency. Contribution
though is not only a factor of cost efficiency but how effective the human resource program is leads to
a significant value to the organization. Ideals such as the key performance indicators are in fact
important measures of human resource practice. Human resource managers should understand their
role say through training and how it enhances effectiveness and contributing to the bottom-line.
Human resource programs involve large cost outlay. Every stage in the program involves some costs.
Measurement and evaluation are critical steps in human resource program implementation. The
element of cost which is a scarce resource in many organization and lower cost allocation of money to
human resource as a function may mean there would be very little resource to implement human
resource programs. Unless proper planning, measurement and evaluation are incorporated in the
program design, they may present huge financial outlays which may not be feasible for the business
leading to inadequate measurement and evaluation. A cost and benefit analysis should then be

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conducted with respect to perceived value from the measurement and evaluation and the actual cost
of measurement and evaluation.
The design of a human resource program should be all encompassing and should include a clear
design of measurement and evaluation. In order to be effective, every human resource program should
encompass an evaluation scheme covering data collection, data recording, data analysis and
interpretation of results and communicating the results to the respective interested parties. A result
based model has to take into account all the necessary steps to be able to achieve the desired outcome.
Communication of the desired outcome and the need for data collection should be clear to all the
stakeholders. All the parties involved should understand what is expected of them. In most cases
communication of the expectation to the stakeholders present a huge setback as stakeholders are not
clear on what is expected of them or worse still the impact of failure on their part to fully capture the
data which facilitates measurement and evaluation. As long as there is incomplete or inaccurate data,
measurement and evaluation will fail to achieve their objective and as such the contribution to the
organization bottom-line will not be accurately measured. This can have fare reaching impact on the
organization as it may lead to inappropriate decision.
There are scenarios when human resource program evaluation can reflect unfavorably on those who
designed or administered the program. In some cases, human resource employees may not be
receptive to criticism. In many cases human resource managers fear exposing what they do and letting
others know the results of their efforts. Obviously, if a program or specific function is not working, the
last thing the staff wants to do is to publish a report about it. This fear becomes even more pronounced
when managers track the cost of programs with the benefits. Program costs should be compared to
results, which can only be done through a properly designed and implemented measurement and
evaluation system.
More developed professions have gone through stages of development which has allowed a consistent
growth of a body of rules and standards for measuring a wide range of their performance initiatives.
Human resource as a function does not have a generally accepted standards to evaluate success of
human resource programs. For disciplines such as accounting, medicine, engineering and
manufacturing, there are clear standards for measurements. Lack of this standards also present a
barrier in measurement and evaluation of human resource programs.
Obstacles in measuring contribution can be overcome by a human resource program developed with
these needs at the design stage. Every effort should be made to ensure that all the expectations are
defined at the design stage and that all the stakeholders understand what is expected of them both at
the design, development, and implementation and evaluation stage. More importantly, every
stakeholder should understand the desired impact of the program to the organizations bottom-line.
Human resource staff should also be encouraged to uphold high levels of integrity to ensure there are
no cover up in order to enable a clear understanding of the deviations and be able to implement
corrective actions to address the challenges.
Levels of Evaluation
As stated in our prior discussion, evaluation is a very important stage in the result based approach.
Business owners and human resource managers would want to identify problems in the human
resource program as early as they occur to enable appropriate corrective measure to be put in place.
This is also important to avoid wastage of resource when it becomes evident that the results are not

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likely to be achieved by the program. Again, early detection of problems may also facilitate avoiding
unnecessary cost of progressing with a program that will not achieve desirable results. However, it is
important to note that even though it is desirable to undertake evaluation for all human resource
programs, some programs may be very difficult to measure objectively and in this case some subjective
evaluation criterions may be adopted to provide indication of their success. Depending on the
circumstances, or the specific program, evaluation can be undertaken at three levels:
1. Measures of perceived effectiveness.
2. Measures of performance.
3. Measures of return on investment.
Perceived effectiveness is an important element in the implementation and success of every program.
Generally, the extent to which the stakeholders perceive the program to be effective enhance the
likelihood that the program will be effective. The principle in this case is that when people perceive a
program to be effective they dedicate themselves to the support of the program and the success is
highly likely, unlike when there is a perception that the program will not achieve substantial results. All
parties involved in a human resource program need to perceive it as effective. Measures of perceived
effectiveness are based on the reactions and attitudes obtained from opinion surveys, questionnaires,
interviews, or observations. Sometimes it may be difficult for example to effectively evaluate the impact
of a program such as wellness initiative put in place by the organization to help employee improve on
their health through exercise. The financial impact other than the actual cost that has a negative impact
on the bottom-line may not be reasonably and objectively determined. However, it may be possible and
appropriate to measure the increased satisfaction of those involved in the wellness program. This can
be analyzed based on the prior response before the implementation of the program and conclusions
drawn on the satisfaction index.
For most businesses, the main aim is profit maximization. In this sense, most human resource initiatives
are designed to improve profitability and general performance of employees and that of the
organization. Most of the programs are implemented at individual level such as training administered
to employees or benefit enhancement to employees. The resultant outcome may be to improve
employees’ skills or increase their motivation which in turn will improve their capacity to perform their
tasks and as such improve the overall performance. In many organizations there exist appropriate
measures of performance. In this case performance after the implementation of a training program may
be compared with performance before training. The performance may also be compared with those
outside the organization or even the planned or expected performance. Results of the program will
demonstrate success depending on the rate at which the success is achieved.
From the shareholder’s perspective, the most important level of measure is the return on investment.
This is considered the most important measure of evaluation due to its ability to demonstrate
contribution to the organizations bottom-line. This is the measure that most top management are
interested in. How does it make the organization better off? Evaluation of the savings or value
generated is a very critical evaluation. It is important to note that though it is not always possible to
attain this level of measurement subjectively for all human resource programs, it is appropriate for many
HR programs.
The levels of evaluations discussed above are not mutually exclusive. For example, it is possible to
undertake a measure of perceived effectiveness while at the same time undertaking a measure of
performance on the same program. Equally, the return on investment on the program may also be

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computed in order to measure the value generated to the organization and to determine whether more
investments should be channeled to the program in future. All these evaluations are important to the
business and support in generating important information that can be used for strategic planning, to
present a business case for top management funding and at the same time to communicate contribution
to employees to motivate them towards improved performance.
References
Becker, B. E., Huselid, M. A. & Ulrich, D. (2001), The HR scorecard: Linking people, strategy and performance.
Boston: Harvard Business School Press.
Eric, G. F., Bullen, M. & HUA, W. Human Resource Accounting: A Historical Perspective and Future Implications.
(2002). Management Decision. 40, (10), 947-954.
Genesee, F. & J. Upshur (1996), Classroom-Based Evaluation in Second Language Education. USA, Cambridge
University Press.
Huselid, M. A., Becker, B. E., & Beatty, R. (2005), The workforce scorecard. Boston: Harvard Business School
Press.
Jack. J. P. (1999), Accountability in Human Resource Management. Houston,TX. Butterworth-Heinemann, United
States of America.
Jasrotia,P.(2004),TheNeedforHumanResourceAccounting,http://www.itpeopleindia.com/20021216/cover.shtm

Suggested further Readings available at the college Library

1. Obongo, S. O. and Kiruja, E. K. (2019), Human Resource Accounting Practice, Catholic University of
Eastern Africa (CUEA) press, Nairobi Kenya.
2. Human Resource Management Issues in Accounting and Audit Firms A research perspective by John
A. Brierley
3. Compensation and benefit design: applying finance and accounting principles to global human
resource management systems / Bashker D. Biswas.
4. Human resource accounting: 3rd ed advances in concepts, methods, and applications / by Eric G.
Flamholtz.
5. Advanced Accounting Theory and Practice Wang'ombe David by Wang'ombe David.
6. Accountability in human resource management: 2nd ed connecting HR to business results / Jack J.
Phillips, Patricia Pulliam Phillips and Kirk Smith.
7. Strategic Human Resource Management A Balance Approach Paul Boselie by Boselie, Paul.
8. Principles of Accounts for East Africa Wood Frank By: Wood Frank

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