The most crucial aspect of human capital is that the value gets appreciated, whereas other physical assets of the organization get depreciated over a period of time. Human Resource Accounting (HRA) endeavors to measure both the cost as well as value of people in the organization and has contributed in the form of human resource balance sheet. It attempts to focus on the strengths and weaknesses of the existing workforce and helps the management take decisions regarding the proper use of human capital, but at the same time has its own limitations. This article focuses on the concept of HRA highlighting the objectives, benefits and limitations of the same.

Human Resource Management (HRM) has been defined as an art of procuring, developing and maintaining competent workforce in an organization to accomplish organizational goals in an effective and efficient manner. This `people-orientation' has been the boon of the 20th Century and christened as the `Integrative Mechanism' of the organization. It is an inter-disciplinary activity in organization which draws inputs from multifarious social sciences like psychology, sociology, anthropology and economics etc. It aims at development and maintenance of quality of work life and endeavors to maximize job satisfaction, job involvement and organizational commitment.

The globalization, deregulation and technological innovations have come out with a strong force for emergence of competitive organizations as that is the right step for survival. The new millennium has ushered in, which categorically stresses the personnel and people aspects assuming the acceptance of technology. While the `People' aspect draws attention to customer-centric activities, the `Personnel' aspect calls for good team of competent and committed workforce, who can reinforce competitive edge to grab market share from others and accomplish goals of the organization. The development of organizational commitment, may enthuse them to develop goals by themselves in line with organizational goals. This line of thinking has emerged in recent years in organizations and has been instrumental to pave the way for Strategic Human Resources Management (SHRM) which is nothing but a pattern of planned human resource development and activities intended to enable an organization to achieve the set goals.

The Accounting World Magazine, Human Resources Accounting, Human Resource Management, HRM, Integrative Mechanism, Organizational Commitment, Globalization, Technological Innovations, Strategic Human Resources Management, Human Resource Development, American Association of Accountants, AAA, Organizational Goals.