The Role of Human Resource Accounting in Strengthening Managerial Decision Making within Maharatna Public Sector Undertakings
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Abstract
Background: Human Resource Accounting (HRA) has become an important structure to identify, appreciate and report human capital as a resource in the organization. Its use in Maharatna Public Sector Undertakings (PSUs) in India is currently minimal but it is a well studied matter in the field of privately owned enterprises. The ability to make managerial decisions based on sound human resource information is critical to organizational performance, more so in complicated settings within the public sector.
Aim: The proposed study intends to determine the extent of HRA application within Maharatna PSUs, its effect on managerial decision making, managerial perceptions, key obstacles, and strategies that should be put in place to enhance HRA practices.
Methods: Descriptive and analytical research design was adopted. A sample of 100 managerial staff members took part in the primary data, which was gathered with use of a structured Likert-scale questionnaire, and semi-structured interviews were conducted with senior executives. Descriptive statistics, Pearson correlation, ANOVA as well as regression analysis were used to present the quantitative data, whereas thematic analysis was used to analyze qualitative responses.
Results: Results show that there is a moderate HRA implementation (Mean = 20.41). Managerial decision making was statistically significantly related to HRA practices (r = 0.359, p < 0.01). The results of regression indicate that the decision-making effectiveness can be attributed to HRA with the contribution of 12.9%. The most prominent issues are the absence of standardized valuation models, a lack of measurement of the employee potential and regulatory guidelines. Managers are very much in favour of the necessity of standardized HRA policies, training programs and integrated HR financial systems.
Conclusion: HRA is a powerful tool of managerial decision making in Maharatna PSUs, but the implementation of the same is limited by methodological and organizational implications. Policy reinforcement, creation of awareness, and the incorporation of HRA into organizational systems can play a significant role in improving the quality of decisions and use of human capital.
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