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An inquiry into the nature of accounting for human resources and its feasibility for CPA firms
Abstracts restudied regularly to ensure that the promotional-fare passengers are not being subsidized by basic-fare passengers, and that promotional fares do, in fact, generate new business. Abstracted by Donald Wood, San Francisco State University, California 94132, U.S.A
HUMAN RESOURCE ACCOUNTING CARPER WB (1973) An inquiry into the nature of accounting for human resources and its feasibility for CPA firms. Ph.D. dissertation, The University of Alabama, Tuscaloosa, Alabama, U.S.A.
THE VALUATION of personnel within profit- and nonprofit-making business entities has received significantly increased attention in recent years. Proposals have varied from predominately subjective approaches of improved personnel evaluation techniques to more objective attempts to include the values of individuals in financial statements for reporting purposes. Unfortunately, the latter attempts at human resource valuation have been highly theoretical with insufficient empirical testing to be seriously considered for adoption by realworld accountants and businessmen. The objectives of the study were: I1) to perform an inquiry into the nature of accounting for human resources; and/2) to test the feasibility of implementation of human resource accounting (HRA) for Certified Public Accountancy firms, the main emphasis being given to the various H R A models already developed. Generically, H R A involves three basic components: (1) identification of human resources as assets; (2) measurement of asset data about human resources; and (3) communication of this information to interested parties. Each of the components was examined in detail in order to develop a conceptual accounting framework for accounting for human resources. The operational mechanics of various HRA models and the benefits and limitations of each were reviewed and synthesized for the purpose of selecting a model for testing in an office of a national public accounting firm. The Flamholtz replacement cost model was chosen for implementation and testing as to its validity and reliability for internal financial reporting purposes. The Kendall Rank Correlation was used to measure the statistical correlation between performance evaluations (the object criterion) and each of three different surrogates for accounting for human resources. The three surrogates were: (1) Flamholtz's H R A valuation model; (2) salary as a compensation measure; and (3) combined historical recruiting and professional development costs. Comparison of the statistical results for each of the three surrogates for accounting for human resources with performance evaluations showed Flamholtz's H R A model to have the highest d e g e e of association. The degree of 570
Omega, Vol. 2, No. 4 statistical correlation for (1) salary and (2) combined historical recruiting and professional development cost yielded significantly lower results. Consequently this research demonstrated that Flamholtz's model is a more valid and reliable multidimensional performance measure for public accounting firms than either salary or combined historical recruiting and professional development costs. Finally, various accounting and economic implications were discussed based on this inquiry into the nature of accounting for human resource accounting and its successful implementation in a real-world business environment. Possible areas for further research also were identified. Abstracted by Wm Brent Carper, College of Business Administration, University of South Carolina, Columbia, South Carolina, U.S.A.
STUDY OF THE MOVEMENT OF URBAN GOODS HERLIHY BC (1972) A study of the movement of urban goods. MBA Thesis, School of Business, San Francisco State University, California 94132, U.S.A. HERLIHY'S thesis was to find and propose an alternative system of moving urban goods into downtown San Francisco. His study reveals that little change has occurred in the multi-stop pick-up and delivery operation. Trucks are able to cover a larger area than the horse and wagon did, but the basic system has hardly changed. During peak hours 40,000 commercial vehicle trips per day are recorded in downtown San Francisco. The average shipment weighs less than 200 pounds and yet some of the trucks that carry the freight are built to carry 20,000 pounds. Thirty-six major drayage companies handle most of the pick-up and delivery activities in the downtown area, augmented by thirteen messenger services and forty-nine delivery firms. Nearly 6,000 tons of goods are being moved daily by pick-up and delivery vehicles. However the typical vehicle makes an average of only thirteen stops per day, handling only 6-5 consignments in an eight-hour period. The vehicle moves at 1.5 to 3 miles per hour while making its drops and pick-ups in an assigned cluster, often doubling back over its own route to service customers. Herlihy suggests a new proposal; that a single government franchised agency be established, responsible for all local freight, similar to a United Parcel Service (U.P.S.). U.P.S. is very selective in its traffic, so any system capable of handling all urban freight or a major part of it, would be somewhat different from any typical consolidation operations. By consolidating urban goods moving within the commercial business district into large loads it would be possible to reduce the number of trucks used for pick-up and delivery service and help reduce congestion. The urban area would be divided into several geographic regions or clusters. The clusters would be determined by volume of 571
I
HUMAN RESOURCE ACCOUNTING CARPER WB (1973) An inquiry into the nature of accounting for human resources and its feasibility for CPA firms. Ph.D. dissertation, The University of Alabama, Tuscaloosa, Alabama, U.S.A.
THE VALUATION of personnel within profit- and nonprofit-making business entities has received significantly increased attention in recent years. Proposals have varied from predominately subjective approaches of improved personnel evaluation techniques to more objective attempts to include the values of individuals in financial statements for reporting purposes. Unfortunately, the latter attempts at human resource valuation have been highly theoretical with insufficient empirical testing to be seriously considered for adoption by realworld accountants and businessmen. The objectives of the study were: I1) to perform an inquiry into the nature of accounting for human resources; and/2) to test the feasibility of implementation of human resource accounting (HRA) for Certified Public Accountancy firms, the main emphasis being given to the various H R A models already developed. Generically, H R A involves three basic components: (1) identification of human resources as assets; (2) measurement of asset data about human resources; and (3) communication of this information to interested parties. Each of the components was examined in detail in order to develop a conceptual accounting framework for accounting for human resources. The operational mechanics of various HRA models and the benefits and limitations of each were reviewed and synthesized for the purpose of selecting a model for testing in an office of a national public accounting firm. The Flamholtz replacement cost model was chosen for implementation and testing as to its validity and reliability for internal financial reporting purposes. The Kendall Rank Correlation was used to measure the statistical correlation between performance evaluations (the object criterion) and each of three different surrogates for accounting for human resources. The three surrogates were: (1) Flamholtz's H R A valuation model; (2) salary as a compensation measure; and (3) combined historical recruiting and professional development costs. Comparison of the statistical results for each of the three surrogates for accounting for human resources with performance evaluations showed Flamholtz's H R A model to have the highest d e g e e of association. The degree of 570
Omega, Vol. 2, No. 4 statistical correlation for (1) salary and (2) combined historical recruiting and professional development cost yielded significantly lower results. Consequently this research demonstrated that Flamholtz's model is a more valid and reliable multidimensional performance measure for public accounting firms than either salary or combined historical recruiting and professional development costs. Finally, various accounting and economic implications were discussed based on this inquiry into the nature of accounting for human resource accounting and its successful implementation in a real-world business environment. Possible areas for further research also were identified. Abstracted by Wm Brent Carper, College of Business Administration, University of South Carolina, Columbia, South Carolina, U.S.A.
STUDY OF THE MOVEMENT OF URBAN GOODS HERLIHY BC (1972) A study of the movement of urban goods. MBA Thesis, School of Business, San Francisco State University, California 94132, U.S.A. HERLIHY'S thesis was to find and propose an alternative system of moving urban goods into downtown San Francisco. His study reveals that little change has occurred in the multi-stop pick-up and delivery operation. Trucks are able to cover a larger area than the horse and wagon did, but the basic system has hardly changed. During peak hours 40,000 commercial vehicle trips per day are recorded in downtown San Francisco. The average shipment weighs less than 200 pounds and yet some of the trucks that carry the freight are built to carry 20,000 pounds. Thirty-six major drayage companies handle most of the pick-up and delivery activities in the downtown area, augmented by thirteen messenger services and forty-nine delivery firms. Nearly 6,000 tons of goods are being moved daily by pick-up and delivery vehicles. However the typical vehicle makes an average of only thirteen stops per day, handling only 6-5 consignments in an eight-hour period. The vehicle moves at 1.5 to 3 miles per hour while making its drops and pick-ups in an assigned cluster, often doubling back over its own route to service customers. Herlihy suggests a new proposal; that a single government franchised agency be established, responsible for all local freight, similar to a United Parcel Service (U.P.S.). U.P.S. is very selective in its traffic, so any system capable of handling all urban freight or a major part of it, would be somewhat different from any typical consolidation operations. By consolidating urban goods moving within the commercial business district into large loads it would be possible to reduce the number of trucks used for pick-up and delivery service and help reduce congestion. The urban area would be divided into several geographic regions or clusters. The clusters would be determined by volume of 571
I