Employee Productivity and Revenue-Based Model in Human Resource Accounting: An Empirical Study in Service Based Industries

Human resource accounting (HRA) is the process of recognizing and reporting the investments an organisation makes in its human resources (HR). Such a process is not mandated at least in the Indian organisational milieu as of now. Naturally, HRA views the organization's management and employees as human capital that generates benefits in the future. HRA attempts to value the organization's HR as an asset and not as an expense. Presently, HR is viewed as an expense item since it is expensed out by the organisation in its financials. In this paper it is elaborately discussed about the objectives and process of HRA in the Indian context in service industries. The basic objective of the paper is to study the Human Capital which is the most important intangible asset and how it affects an organisation's productivity, Human Resources Accounting practices, to identify the issues and challenges, to examine these issues and challenges and lastly, to give suggestions based on the findings of the study.