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The Development and Implementation of the Stochastic Rewards Model for Human Resource Valuation in a Human Capital Intensive Firm

Eric Flamholtz (Associate Professor and Director, Accounting‐Information Systems Research Program, Graduate School of Management, University of California, Los Angeles)
Jack B. Wollman (Professor, De Paul University, Chicago and Partner, Lester Witte and Company, C.P.A.)

Personnel Review

ISSN: 0048-3486

Article publication date: 1 March 1978

606

Abstract

‘Human resource accounting’ (HRA) is a term of relatively recent origin: research on HRA only began during the 1960s. Initially, the objective was to improve corporate financial reporting by accounting for ‘human assets’ and, in turn, to increase the representational validity of income and asset numbers. A related purpose was to prevent prevailing accounting conventions from motivating suboptimal treatment of people — specifically, to reduce the likelihood that liquidation of human resources would not be revealed in financial reports because of the failure to account for investments in people as assets.

Citation

Flamholtz, E. and Wollman, J.B. (1978), "The Development and Implementation of the Stochastic Rewards Model for Human Resource Valuation in a Human Capital Intensive Firm", Personnel Review, Vol. 7 No. 3, pp. 20-34. https://doi.org/10.1108/eb055364

Publisher

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MCB UP Ltd

Copyright © 1978, MCB UP Limited

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