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The Balanced Scorecard (BSC), popularized by Kaplan and Norton (1996a, 1996b), has become widely discussed and used (see, for example, Olsson, Karlsson, & Sharma, 2000). The basic notion of the BSC is that organisational performance ought to be evaluated from more than simply a financial perspective. This notion is sound and was an improvement over the traditional focus upon only financial performance. However, there is a fundamental problem with the version of the BSC proposed by Kaplan and Norton (1996b). Specifically, the Balanced Scorecard version proposed by Kaplan and Norton (1996b) is based upon the notion that “four perspectives” ought to be used to evaluate organisational performance: customer, internal business processes, learning and growth and financial. While this has intuitive appeal, the basic problem is that Kaplan and Norton (1996a, 1996b) have not provided any empirical support for these particular “perspectives.” We do not know whether these are the correct perspectives to be used as a basis for assessing organisational performance. This can have serious consequences for organisations. Managers are implicitly being encouraged to focus upon these four factors, when others might be more significant. In addition, this paper also questions the meaningfulness of the four perspectives proposed by Kaplan and Norton in terms of their construct validity. This is not just an academic quibble. The significance is that if the factors used in a strategic management system, such as a BSC, are invalid, managers can focus upon the wrong things and this, in turn, can potentially be damaging to companies, investors, and in turn, optimal societal resource allocation. Instead of the four perspectives proposed by Kaplan and Norton, there is evidence that there are actually six “key strategic building blocks” of successful organisations (Flamholtz, 1995; Flamholtz & Aksehirili, 2000; Flamholtz & Hua, 2002), and these should be used (in addition to financial results) to provide true balance for both performance measurement and strategic management. This should not be viewed as invalidating the original concept of the Balanced Scorecard, but rather as the next logical generation or iteration of its development.

The Journal of Human Resource Costing and Accounting has achieved critical mass and recognition as a primary place for publishing both scientific and practical applications of Human Resource Accounting (HRA). This paper reviews the state of the art of the development of HRA as it has appeared in the JHRCA since its inception. The paper assesses contributions and categorizes them according to studies which (1) underscore the importance of reporting human resource assets on the financial statements, (2) present empirical evidence, case and field studies on the various methods of reporting human resource assets and implementing HRA in various organisations, (3) analyse methods for measuring human resources, (4) demonstrate the use of HRA in human resource management decision‐making, (5) identify bottlenecks to the growth of HRA, (6) identify controversies in the field, and (7) discuss recent developments such as the balanced scorecard. The paper draws conclusions on the state of the HRA and suggests recommendations for future research and development.

The paper celebrates the fiftieth anniversary of the publication of Flamholtz’s seminal paper on the Human Resource Accounting approach to taking people into account, providing a critical review of its progress since that time and offering some thoughts on how the project might now be beneficially shaped.

The paper provides an authoritative review of the progress of the accounting for people project to date.

The continuing exploration of how it might be possible to take people into account is identified to be entering a new and exciting phase.

The authors readily acknowledge that what the paper provides is an account of the evolution of the accounting for people field, which they argue is currently extending into a new and important phase relating to employee health and wellbeing.

The paper’s principal contribution lies in bringing together three authors who have made significant contributions to the topic of accounting for people over the past 50 years.

There is growing recognition that the core economic resources of the current era are human and intellectual capital, rather than physical assets such as inventories, plant, and equipment. Given the increasing importance of human capital and intellectual property as determinants of economic success at both the macroeconomic and enterprise levels, it is clear that the nature of investments made by firms need to shift to reflect the new economic realities. Specifically, if human capital is a key determinant of organizational success, then investments in training and development of people also become critical. In turn, there is a need to develop concepts and tools for monitoring and evaluating management development programs in terms of their impact, results, and value or return on investment. The specific objective of this article is to draw upon the concepts and measurement approaches of the field that has come to be known as “human resource accounting” and show how they, specifically the stochastic rewards valuation model, can be used as tools for the measurement of the value of investments in training programs designed to increase the value of human capital.

We have witnessed a significant transformation in the world economy and the organisations that comprise it. The economy of old was manufacturing‐based and relied heavily on tangible assets as determinants of value. In contrast, the present‐day economy is based on knowledge and information, intangible assets that are embodied in people. This shift has triggered the development of tools with which to measure these intangible assets. One accounting tool that is directly relevant to the measurement and, in turn, the management of human capital is human resource accounting. The purpose of this article is to discuss some current issues, recent advancements, and possible future directions for further development.

This paper seeks to enhance understanding of the role and effect of corporate culture as a unique strategic asset on the success of business models.

The paper is a conceptual exploration of several key constructs and their interrelationship. The argument is based on four related notions: that corporate culture is an “asset”; that it is a “strategic asset” in the sense of comprising a source of competitive advantage; that it might well be the “ultimate strategic asset”; and that culture as a strategic asset can be the essence or core of a business model. The paper also uses “empirical examples” of actual companies to study and demonstrate the core constructs and ideas. It also examines issues involving the key dimensions of corporate culture, the measurement of corporate culture, and certain related performance measurement issues.

The paper shows that corporate culture is a strategic asset, which, if managed properly, can be the key differentiating factor in a successful business model. It also shows that when not managed properly, can actually transform into a “liability”.

This paper demonstrates that corporate culture is a critical strategic asset because of its role in creating competitive advantage and successful business models. It suggests that corporate culture can also be the single most important source of competitive advantage in business models. Finally, it suggests that practicing leaders as well as investors and academics need to pay attention to corporate culture as a component of business strategy.

This paper contributes to the literature and to practice by examining the notion that corporate culture is a strategic asset in depth and examining the relationship between culture as a strategic asset and business models. It also takes steps towards a coherent framework for both scholars and practicing managers to frame and understand the issues involved in the management and measurement of this critical strategic asset.

The purpose of this paper is to provide an overview and history of human resource accounting (HRA) with the objective of promoting both continued academic research and organizational applications. The history of HRA illustrates how academic research can generate improvement in management systems. The paper defines HRA and suggests implications of measuring human capital for financial reporting and managerial uses. Recent Swedish‐based HRA applications with respect to measuring human assets and intellectual capital, including the Skandia Navigator, illustrate how intellectual history and developments in business schools can influence business history.

The purpose of this paper is to address the need for alternative measures of financial performance that can provide a real time indication of what is actually happening in organizations.

The paper describes the framework, the empirical research that has been conducted to assess its validity, and the measurement tools that have been developed.

The proposed model identifies the “key drivers” of organizational and financial success. However, if there is a lack of a sufficient fit between the level of “strategic development of an enterprise” and its) then there is disequilibrium. There are identifiable symptoms of this equilibrium or disequilibrium called “growing pains,” which can be measured by an instrument developed called “The Survey of Growing Pains.”

The proposed measures assess operational risk, which can be used under “Sarbanes‐Oxley.” The framework and measurement tools have been used by differing companies in strategic planning and performance management. It provides an alternative concept of a “balanced scorecard.”

The paper's contribution is in applying research from the field of organizational development to help develop a new set of measures for monitoring performance in real time.

Book review by Michele K. Masterfano. Flamholtz, Eric G. and Yvonne Randle. Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm. San Francisco: Jossey-Bass, 2007. ISBN 9780787986162

The broad objective of the study was to develop assumptions and guide‐lines by which the cost approach to Human Resource Accounting could be implemented. The research was specifically aimed at determining the sensitivity of the cost approach for identifying significant differences in the investments made over two years in two comparable groups (16 subjects to a group) and how these differences could contribute towards more effective decision‐making in evaluating the relevant aspects of company policy. Statistically significant differences were obtained at the 5% level for total investments, academic development investments and orientation investments. The latter could not be regarded as material in absolute terms and the difference in total investments could therefore be ascribed mainly to academic development. The extent of investments in training suggests the necessity to optimize training from a cost/benefit point of view. During the initial months of the study, investments accrued at a proportionally higher rate than in subsequent months, eg 75.1% of the total investments were made during the first three months of service. It can therefore be said that relatively high labour turnover during the early months of service would carry a substantial loss potential, especially where there was no evidence of material investments in the orientation of personnel.