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History of Human Resource Accounting

Early interest in human resource accounting came from the economic theory of human capital proposed by Sir William Petty in 1691, who argued that labor was the source of wealth and should be included in measures of national wealth. Further developments were made by scholars like William Far, Earnest Engle, and theorists in the early 20th century who began discussing treating people as assets. However, the most productive research on valuing human resources as assets began in the 1960s and was influenced by fields such as sociology, psychology, and economics, with significant work done by Flamholtz and his team at the University of Michigan.

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20 views1 page

History of Human Resource Accounting

Early interest in human resource accounting came from the economic theory of human capital proposed by Sir William Petty in 1691, who argued that labor was the source of wealth and should be included in measures of national wealth. Further developments were made by scholars like William Far, Earnest Engle, and theorists in the early 20th century who began discussing treating people as assets. However, the most productive research on valuing human resources as assets began in the 1960s and was influenced by fields such as sociology, psychology, and economics, with significant work done by Flamholtz and his team at the University of Michigan.

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Early Development of Human Resource Accounting Concepts

Early interest in HRA came from several sources, such as the economic theory of human
capital, where the first attempt to value human beings in monetary terms was made by
Sir William Petty as early as 1691. Petty was of the opinion that labour was the father of
wealth and it must be included in any estimate of national wealth. Further efforts were made
by William Far in 1853, followed by Earnest Engle in 1883. Flamhotz et al. (2002), states
that some theorists like Scot (1925) spoke about treating people as assets and accounting
for their value at the beginning of the twentieth century. However, the most productive
period of research of human HRA started at the beginning of the 1960s and was strongly
influenced by the disciplines of sociology, industrial psychology and economics (Grojer,
Johanson 1997). Research in 1999 by Flamholtz, Pylet and his team at Michigan University
generated a chronological history of the development of Human Resources Accounting depicted
by five stages as shown in

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