It is because of the quality of human resource and proper management of human resource that an organization is able to differentiate itself from others and the organization is able to attain competitive advantage (Blau, 1978).
Organization invests in different projects and assets so that they would yield returns to the company in the long run and the company only invests in them if the expected value of the returns of the projects or assets would be more than their total present investment cost. This theory can also be linked to the human resource of the organization and organizations invest in human resource so that they would yield them profits in the years to come and help the organization to grow as a successful venture. As human resource is the most important asset of the organization and therefore it is imperative for the organization to properly manage its human resource so that the investment yields maximum return (Roslender, 1997). There can be different kinds of investment on human resource like the cost of training, cost associated with recruitment of employees etc and therefore it is important for the management to properly analyse the cost and returns that human resource would yield and for this purpose, human resource accounting has emerged as the solution (Mirvis, & Lawler III, 1984). ...Show more