...that human resources or people are the most valuable asset. The reasons why businesses don’t usually value human assets are: (1) in practice we just haven't worked out a proper way to value these people and it is difficult; (2) some companies also believe that they do not own people and therefore should not account for them. However, companies do benefits from their employee’s work. In companies such as Apple, human resources are core to the business success due to their knowledge, skills and creativity. They represent a valuable resource and should be placed on the left side of the balance sheet. The benefit of treating employee as valuable assets is that companies which invest in their employees create a positive environment so that they can work and perform better financially. One example of an organization that has done this is Infosys (The Commerce Pedia, 2012), the giant Info Technology services firm in India. The entire workforce within the firm was assigned a value using an accounting model that calculates all of its employees’ collective worth. By doing this, Infosys has a significant commitment to investing in employees across all functions and levels of experience and the firm can take managerial decisions based on the availability and the necessity of human resources. After considering the influence of the human capital investment, the accounting equation should be revised as “assets = liabilities + owners' equity”, where the assets include human assets and material...
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...Introduction This essay introduces that Human Resource (HR) is the most important asset of an organization. The essay will share with the reader insights on why the human resources, or mostly referred as employees, are the key to successful organizations. This paper will cover on how employees’ contribution will impact companies’ competitive advantage and help achieve their goals and performances; and how employees play a vital role in productivity and improve processes through their skills, expertise and experiences. This in return contributes to the overall organizational success. Employees as a Competitive Advantage Employees are the heartbeat for companies. According to Armstrong and Baron (2002), a company can leverage on their people and their collective skills, abilities, and experience, coupled with their aptitude to implement the interests of the company, thus producing a competitive advantage for the company against its competitors. Each employee contributes differently to the company across the various departments and functions that they are in. Therefore, it is the employer’s responsibility to recognize the value and the quality of each employee, and to be able to see them as valuable and not a liability to the company they are part of (Goessl 2013). As a result, the company will cultivate its effort to ensure that their employees are valued and retained. Retaining a steady pool of employees will contribute greatly to both short-term benefits and long-term...
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...| | | |Assessment Submission Form | | |Student Name |Sathiswaren | |Student Number |12256746 | |Assessment Title |“Human Resource* is the most important asset of an organization.” | |Course |Bachelor Of Science in Logistics Management | |Lecturer |Dr. Chang Chen Sheng | |Tutor (if applicable) |Dr. Chang Chen Sheng | |Date Submitted |14-11-2012 | |OFFICE USE ONLY | | |Date Received | | |OFFICE USE ONLY | ...
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...Human resources - Expenditures or Assets? In my opinion employees are both expenditures and assets of a company, but it is recommended that they should be considered to be assets. On the one hand, when we think of compensations and benefits, it can not be denied that employees are expenses to be managed. A company has to pay their employees certain amount of money so that they can use their labor. It is like the telephone bills, or electricity bills or office supplies that we have to settle. Besides salary or wages, they need to offer employees fringe benefits. There can be other expenses that they have to pay if they want to keep employees. On the other hand, employees are assets for several reasons. First of all, they are tied to a company through a contract, and when the contract is signed they belong to the company and the company can use their resources. The company can own their contributions expressed through their knowledge, skills, experience, and relationships. Second, when one is employed he or she is used for certain purpose; he is assigned tasks, obey the boss. More importantly, "Assets" does not only mean "possession", it also implies the preservation and development. Any manager may want their assets to become more valuable, i.e. becoming more productive and profitable for the company. If a manager treats employees as expenses only, he will try to keep cost low by many ways like offering lowstarting salaries, choosing not to fill empty positions...
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...Human resource can be defined as to make use of talents and abilities of each employee to meet the operational objective that are the ultimate aim of the organisation. Along with this, the practice also seeks to ensure that individual employees are satisfied with both their working environment and the compensation and benefits that they receive from their organisation. In my opinion, human resource can be said to be the most important asset of all organisation. This is because each and every individual employee in an organisation have different set of experience and knowledge which could be of use for the company. As per stated by K.Aswathappa (2005), they are the people that staff and manage organisation. This is also why we often hear company saying “Our employee are our most important asset”. Employees are definitely important because they help an organisation to grow. We know that each individual certainly have a specific area which they specialise in, be it in human resource, accounting, sales or an operations staff. Each individual employee will have to perform at the specific department which they specialise in and this keeps the company operating to higher scales as everyone makes up an organisation. Other than that, human resource management also plays an important role in employing the right person to work for the organisation. They are the department that is responsible for selection and recruitment of the company asset. This role often have to have to source...
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...Question: What can HR do to make senior and line managers take more of an investment approach to human assets? If we ask ourselves the question: Why employees have a peculiar value? The answer lies in the special characteristics of the human element like: the ability to learn and acquire new ideas and knowledge, decision making capability, motivation, commitment and teamwork. Bearing this in mind, a truly skillful and talented employee is a valuable asset to his organization. The awareness of the significance of human assets has substantially increased among the effective organizations. The Human resources in some organizations have adopted strategic views that consider employees as human assets. They further developed policies and programs in order to invest in these assets. These measures are meant to increase their value to the organization and the marketplace. Human resources professionals can play a major role in influencing the extent to which an organization’s leaders truly understand the inherent value of its people.it has been argued that those in the HR profession have an ethical obligation and bear responsibility for leadership in this regard. The following are some of the HR duties towards improving an investment approach to human assets: 1. Connect all human assets management efforts with the overall business strategy. Too many organizations still dismiss human assets management as a short-term, HR problem rather than an integral part of a long-term business strategy...
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...The human capital theory emphasises the need to educate and maintain the workers that an organisation has as they are assets to the company. The human capital is seen as a source of competitive advantage that it is in the theory and proper management of the human capital will lead to greater productivity and efficiency. ‘The educating of the workers is an investment which is equally worthwhile as that of capital.’(Woodhall, 1997) Beeker (1993) asserts that ‘education and healthcare are a key to improving human capital and thence increasing the economic outputs of a nation’. These factors are the ones stressed by the human capital theory and this shows that the human capital theory recognises the need to invest in human capital inorder to generate worthwhile returns. The human capital theory brings out the value that the workers have to an organisation and to increasing shareholder value to the company and thus authorities summaries the human capital theory as ``workers having a set of skills developed by educating and training that generates stock of productive capital``(Armstrong, 2009:238). The human capital theory helps improve and increase skill to the valued workers or human capital that the company has therefore showing the cognisance that the theory takes on investing in human capital as they generate worthwhile returns. The human capital theory encourages the creation of innovative ideas and products to gain advantage over other players in the market by educating and...
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...much debate as to whether the human resources of an organization can be considered as an asset and treated accordingly in the accounting system. There are two schools of thought. One says that human resource is an asset and the other does not agree with this. Now let us see what is an asset? Asset is anything which is owned by the entity to derive service in future and should have legally enforceable claim. As such there is no guarantee of deriving benefits from the existing Human resources in future and has no sales value like other assets. Therefore, legally, human resource is not an asset claims one school of thought. Besides, company law also does not consider it as an asset. But the other school is of the opinion that the "human...
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...UNIT NAME: HUMAN RESOURCE MANAGEMENT UNIT CODE: HCBA 3109 SUBJECT: TERM PAPER HUMAN CAPITAL TABLE OF CONTENT 1. INTRODUCTION 1 2. INTELLECTUAL CAPITAL 2 2.1 Definition of Intellectual Capital 2 2.2Characteristics of Intellectual Capital 2 2.3 Components of intellectual capital 3 2.3.1 Human Capital 3 2.3.2 Structural Capital 3 2.3.3 Relational External Capital 5 3. MANAGING INTELLECTUAL CAPITAL 7 3.1 Tacit knowledge 8 3.2 Explicit knowledge 8 4. MEASURING INTELLECTUAL CAPITAL 12 4.1 Why should Intellectual Capital be measured? 12 4.2 Why is intellectual capitalso hard to measure? 12 4.3 Methods for measuring intellectual capital 13 5. INTELLECTUAL CAPITAL REPORTING FRAMEWORKS 14 5.1 Balanced Scorecard 14 5.2 Intangible Assets Monitor (IAM) 14 5.3 Skandia Value Scheme (SVS) 15 5.4 Challenges in reporting intellectual capital 15 5.5 Challenges in disclosure of intellectual capital 16 6. VALUATION OF INTELLECTUAL CAPITAL 17 6.1 Value added approach 17 6.2 Value creation index 18 6.3 Valuation models 20 6.3.1 Traditional valuation models 20 6.3.2 Static valuation models 21 6.3.3 Dynamic valuation models 21 6.3.4 Real option models (ROM) 22 ...
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...resources and assets that defy conventional accounting measures, but which still determine the value and the competitiveness of an enterprise. IC is commonly divided into the areas of Human Capital, Structural Capital, Relationship/Relational Capital, and the Business Model. In our modern Information and Knowledge Economy, intangibles have progressively become the driving factors around which business revolves. Conventional bricks-and-mortar accounting is no longer sufficient to explain how Google, Netflix, LinkedIn, Apple, and General Electric are far more valuable than their financial assets. As of June 2011, Netflix's tangible equity was $290 million USD, yet its market value is over $12.8 billion USD (source: Yahoo Finances). The Apple Corporation, with $55 billion USD in conventional hard assets, was valued at over $272 billion USD with its intellectual capital included (source: Yahoo Finances). These dramatic value differences in company wealth defy traditional accounting logic. Intellectual capital is the new economics discipline that strives to explain the value of these high-knowledge organizations, and how they add value for their customers far beyond what bricks-and-mortar can measure. Karl-Erik Sveiby and Leif Edvinsson are commonly considered to be the first thought leaders of modern Intellectual Capital. Thomas Stewart and Patrick Sullivan are also well-respected in the field of IC. Intangibles The value of an enterprise is made of physical assets, various financial...
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...affordable, quality, private housing available to service members and their families. As an entirely owned subsidiary of Forest City Residential Group, Forest City Military Communities focuses solely on developing, managing and maintaining high-quality communities for military members and their family members. (Forest City Website, 2005) Forest City as organized a plan that has skills to accomplish these goals and needs to partner with Department of the Navy for the mid-west region. The skills Forest City possesses are: long-term vision, experience with large and complex projects, decades of experience of property management and maintenance experience. Obviously physical assets are what appeals to the customer, but the assets will not appeal to anyone without the people to bring the plan together. This is where human resources come into play. The manager will identify the need to hire staff-based on budgeted staffing allowances and on the manager’s approval. For the mid-west region project 60 positions needed to be filled. The manager then places an ad and sometimes uses an employment recruiter or head hunter. The manager must be familiar with the job descriptions and/or requirements for the positions they are attempting to fill. Having the knowledge will not only assist the manager with the criteria,...
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...make a whole lot more money skillfully managing intangible assets than tangible assets." – Warren Buffet In the current knowledge based economy, there is a transition from matter based economy to one based on ideas. The emphasis is shifting from natural resources to new thoughts and designs. With the shift from monetary economy to knowledge based economy, the wealth can be added by increasing the intangibles. The intangibles are the growth drivers for the Indian Economy. The high productive sector is the service sector whose contribution to GDP of the nation has displaced the contribution of Agriculture and Industry and the contribution is rising. In service sector nearly 22% of the population of the nation is contributing around 55% of GDP. The reason for high productivity can be attributed to only intangibility. The financial statements of the service sector enterprises do not depict the intangibles – because of difficulty in identification, measurement and valuation. The growth of the Service Sector may be slowed down if the service firms which are mostly knowledge driven are not growing and the two major obstacles in the growth of knowledge driven firms are (a) Finance and (b) Coverage of risk. Since the methodologies have not been developed for valuation of the intellectual properties, there are no reported resources on the basis of which sources for raising the resources can be approached and also the assets can be insured. While addressing a gathering of students...
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...MOVEMENTS OF PERSONNEL 1. Transfer The term transfer refers to the shifting of employee from one position to another without increasing his duties, responsibilities or pay. Every business finds it necessary to transfer workers to different positions. There may come a time when older workers must be given assignments that require lighter work. Or if a worker has been assigned to a job which was satisfactory, he may shifted to another. Occasionally, transfer is necessary because of personal differences among employees, or because of personality conflicts between workers and supervisors. Also employees are often rotated from position as a training device. Rules and policies relative to transfer should be clearly stated and understood by the members of the firm. Management should also tell people their shifts, whether the transfer is permanent or temporary, and if it is temporary, how long will they be working in the new job. 2. PROMOTION The term promotion refers to the shifting of an employee to a new position which both his status and responsibilities are increased. Higher pay does not always accompany a promotion, although it usually does or at least follow soon after. Promotion are advantageous to the firm as well as to the employee. Management knows that deserving employees should be taken care of. Advancement in pay that does not involve a move into a new job classification is called a horizontal promotion. An advancement that moves an employee...
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...framework for conduction return on assets analysis by incorporation revenues and expense to generate net profit margin, as well as an inclusion of assets to measure asset turnover. The strategic profit model employs three key components: profit margin, asset turnover and leverage. Profit Margin Net Profit Margin Sales Net Profit Gross Margin Total Expenses Sales Cost of Goods Sold Net Profit Margin Sales Net Profit Gross Margin Total Expenses Sales Cost of Goods Sold It reflects the profits generated from each dollar of sales. The model of profit margin like figure1.1 Figure1.1 For example, say your company achieved $100 million in sales last year. The total cost is $85 million. It is include cost of goods and other expense. So the net profit is equal $15 million. Dividing the figure by $100 million leaves you with a profit margin of 15 percent. Higher profit margins result in higher return on equity. Asset Turnover Asset Turnover Total Assets Sales Current Assets Fixed Assets Inventory Accounts Receivable Other Current Assets Asset Turnover Total Assets Sales Current Assets Fixed Assets Inventory Accounts Receivable Other Current Assets It assesses the productivity of a firm’s investment in its assets. The model of profit margin like figure1.2 Figur1.2 For example say you company generates $100 million in sales. The total assets are $40 million. It is include current assets and fixed assets. You divide $100 million by $40 million...
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...Ownership Mission Statement Vision Guiding Principles Goals and Objectives Generic Strategy SWOT Analysis Marketing Mix 4P’s Income statement Conclusion PowerPoint Slides Company Type and Ownership “SECMAT HR Consulting” will be established as a General Partnership company based in Washington D.C, originally by 6 partners of SECMAT team. About General Partnership In business, when you hear the word partnership, it generally refers to a general partnership. In a general partnership, there are two or more partners. Each is liable for any debts or judgments taken on by the business. There is no limited liability, which means all the partners’ assets can be taken in a lawsuit or be targeted to settle debts should the partnership become insolvent. Any partner can be sued for the full amount of business debts. Another attribute of the general partnership is that every partner has so-called “agency powers,” which means any partner can bind the entire business to a contract or business deal. The benefits of the general partnership are structure and control. Unless by other agreement, profits are shared equally amongst the partners. In most cases, there is a contract of some sort which outlines how profits and losses will be divided. In a general partnership, each partner has an equal right to participate in the management and control of the business. The partners have the option...
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