This paper examines the complementary relationship between human resource accounting (HRA) and human resource information systems (HRIS) as critical components of strategic human resource management. Using a qualitative descriptive research design, the study collected data from 17 HR professionals via a structured self-administered questionnaire and analyzed responses through thematic analysis. The findings reveal two principal themes: HRIS tools and applications support HRA activities by providing the necessary platforms for measuring human capital costs, while HRA in turn ensures HRIS generates complete and accurate organizational information by integrating accounting and financial data into HR processes. The study addresses a notable gap in existing literature regarding the inter-relationship between these two concepts.
The paper demonstrates effective use of thematic analysis to synthesize qualitative survey data. By identifying and labeling two discrete themes — HRIS supporting HRA, and HRA facilitating complete HRIS information — the author converts open-ended participant responses into structured, arguable claims that directly answer the research question. This technique shows how qualitative findings can be organized into coherent, evidence-backed conclusions even without statistical analysis.
The paper follows a conventional research paper structure: an introduction with background, problem statement, purpose, research question, significance, and objectives; a literature review covering HRA, HRIS, and their relationship separately; a methodology section covering design, sample, measures, analysis, and ethics; a results section with participant profiles and themes; a discussion connecting findings to existing literature; and a brief conclusion. This IMRaD-adjacent format is appropriate for the descriptive research design employed.
Human resource management (HRM) is a term used to refer to the tasks and activities that are beneficial in maximizing the performance of employees in an organization. Over the past few years, HRM has been increasingly evolving and dynamic as organizational leaders constantly look to improve quality, productivity, and effectiveness. New models and ways to promote the value and effectiveness of HRM have been developed and are used by organizations. The evolution of HRM is fueled by rapid technological advancements and increased globalization.1 Human Resource Information Systems (HRIS) are among the models that have emerged in HRM. HRM also entails the management of accounting information, which is used extensively in organizational strategic decision-making.
Rapid technological advancements have contributed to the emergence of new models and ways of human resource management. Human resource professionals are increasingly seeking measures to enhance the effectiveness of their processes and activities. These efforts have contributed to the development of new HRM models, including Human Resources Accounting (HRA) and Human Resource Information Systems (HRIS). The development of these new models has been influenced by the fact that organizational leaders are increasingly cognizant of the various kinds of technology that could enhance their organization's effectiveness. HRA and HRIS have become critical components of modern HRM initiatives as they play a vital role in strategic decision-making processes.
HRIS is a term used to refer to integrated systems that collect, store, and analyze information about an organization's human resources.2 The concept of HRIS was first introduced over five decades ago and has evolved beyond its initial purpose of converting paper records into computerized databases. Contemporary HRIS tools can be used by human resource professionals to carry out various activities on a daily basis. Through these tools, organizations implement more complex computerized systems to help ensure their records are accurate and up-to-date. HRIS tools are considered critical in today's HRM as they help enhance efficiency with regard to HR decision-making.
According to Al-Hattami and Kabra, human resource accounting is one of the sub-systems within the accounting information system used in HRM.3 Human resource accounting provides all financial and non-financial information regarding human resources. It achieves this by gathering data regarding the organization's human resources from a variety of sources and examining the data based on certain rules of accounting. The results of this process are then provided to all interested parties in order to promote the realization of desired goals and objectives. Therefore, human resource accounting plays a critical role in understanding the accounting aspect of strategies and activities adopted in human resource management.
While HRIS and human resource accounting have become critical components of HRM, there is limited data on the link between these two concepts. There is limited data on the link between human resource accounting and HRIS despite the role they each play in HRM and strategic decision-making in an organization. In addition, there is an erroneous assumption that human resource accounting primarily focuses on accounting or financial information. This assumption negates the role non-financial information plays in human resource accounting processes and systems. The limited data on the two concepts has contributed to a lack of understanding of the role accounting information plays in human resource information systems and human resource management.
The purpose of this study is to explore the complementary link between human resources accounting and human resource information systems. The study seeks to demonstrate how these two concepts are inter-related and play an important role in human resource management processes.
What is the relationship between human resources accounting and human resources information systems?
This study is important in the field of human resources management as it provides insights into the link between financial and non-financial information in human resource practices. By exploring the relationship between human resources accounting and HRIS, the study demonstrates how both non-financial and financial information are critical in HRM. HRM practices should incorporate the collection, analysis, and use of financial and non-financial data in a complementary manner. The study also addresses the existing gap in literature regarding the complementary link between human resources accounting and HRIS, thereby addressing the need for human resource professionals to design accounting information systems as part of HRIS tools for better decision-making in HRM. The integration of accounting information into HRIS would also enhance an organization's strategic decision-making.
By addressing the research question, this study seeks to achieve the following objectives:
1. To provide insights regarding human resource information systems.
2. To provide insights regarding human resources accounting.
3. To analyze the comparative relationship between human resources accounting and human resource information systems.
4. To clarify the significance of financial and accounting information in human resource information systems.
Human resource accounting and human resource information systems have been the subject of numerous studies in the human resources field in recent years. Studies have been carried out on these concepts because of the evolving and dynamic nature of HR practices due to rapid technological advancements. Existing literature has examined these concepts from various perspectives to help enhance HR practices and processes.
Existing literature demonstrates that there is no universal definition of the concept of human resources accounting, as numerous definitions exist.4 Human resources accounting (HRA) is defined as the process of identifying and measuring human resource information and providing that information to relevant stakeholders.5 This definition suggests that HRA is a tool that can be used to report an organization's assets in both management accounting and financial accounting. HRA is also defined as the process of gathering, measuring, and providing information regarding human resources to promote an organization's effective management.6
HRA entails accounting for human capital as part of an organization's assets. When HRA is employed to account for human capital as an organizational asset, the process generates numerical data regarding the value and cost of humans as organizational resources.7 As a result, the organization's management embraces a human resource perspective in decisions that involve people.
HRA entails accounting for expenditures associated with human resources as assets rather than through conventional accounting practices.8 Traditional accounting differs from human resource accounting in that the former treats human-resource-related expenses as expenditures that reduce profit. Since HRA entails a different way of accounting for costs related to human resources, it plays a critical role in enhancing HRM and financial accounting and reporting. It provides a mechanism through which human resources are given emphasis and importance in today's accounting and HRM framework.9 Biswas contends that HRA plays a critical role in HRM as it provides information that management can use to evaluate its decisions with regard to human resources.10 By providing such information, HRA gives investors the opportunity to accurately assess and understand the full picture of the organization.
HRIS is defined as a systematic procedure of gathering, storing, retrieving, maintaining, and validating data regarding an organization's human resources.11 HRIS tools have become common in modern HRM practices because they provide a means for ensuring the smooth running of an organization's internal operations. HRIS provides a framework for organizations to achieve incremental leaps in efficiency and response time for human resource work, which is traditionally complex and labor-intensive. Over the past few decades, HRIS has been viewed as a function of information systems, which are becoming increasingly important for today's organizations.12 Information systems have become more important for organizations because of increased awareness of the role technology plays in enhancing operations and competitive advantage. Organizations are increasingly implementing HRIS tools because of the role information systems play in enhancing their operations across all areas, including human resources. Therefore, HRIS is essentially an intersection between information technology and human resources through a human resource software solution.13 HRIS comprises computer applications, databases, and hardware and software that are essential for the collection, storage, maintenance, manipulation, and delivery of human resources information and function.14
According to Johnson, Lukaszewski, and Stone, information systems have traditionally had a major impact on the functioning of organizations and their overall effectiveness.15 This major impact has in turn facilitated the adoption of information systems into human resource practices through the development of HRIS. HRIS is viewed as electronic human resource management as it is used to support core functions, decisions, and processes.16 Qadir and Agrawal attribute the emergence of HRIS to the re-engineering of conventional HRM processes and applications through information technology.17 This journey has involved transforming HRM from the conventional attendance sheet to the balance sheet in order to achieve strategic human resource management. As technology is increasingly adopted in HRM practices, many human resource functions have been re-engineered, resulting in the establishment of HRIS. Additionally, this journey has entailed the transformation of the role of human resource professionals and their jobs. HRIS has become critical in today's HRM practices because of the role of HR professionals as strategic partners with top management.18
HRIS has become an important management information system that improves an organization's human resource administration functions.19 This significance is attributable to HRIS's role in automating most HR planning functions.20 Some of the HR planning functions automated by HRIS include identification of potential employees, maintaining complete employee records, and developing programs for employee talent development. As an important management information system, HRIS helps in coordinating and controlling major functions relating to human resources.21
Qadir and Agrawal suggest that the relationship between HRA and HRIS is evident in the development of HRIS tools.22 The development of HRIS following the adoption of technology in human resources has involved transforming traditional HR functions and practices. This process has included changing the role of HR from the conventional attendance sheet to the balance sheet. As a result, this change has provided an opportunity for accounting in human resources to be integrated into HRIS. However, there is minimal integration of HRA into today's HRIS, as the two concepts are not widely considered inter-related. This poor integration is attributable to the challenges many organizations face in the execution of HRA.23 While HRA is viewed as a critical tool for measuring performance, challenges in its execution have contributed to poor integration into HRIS applications.24
Marler and Boudreau contend that there is limited evidence on the link between HRA and HRIS.25 HRA is viewed as an important component of modern HRM practices because of the evolving role of HR professionals and their jobs.26 The adoption of technology into human resource practices has provided a framework for the development of HRA tools, which are increasingly being used. Existing literature provides evidence on the role HRA plays in improving the efficiency of HR practices. Through providing a different way of accounting for costs relating to human resources, HRA has been found to enhance organizational performance. However, there remains limited evidence in academic research on the direct relationship between HRA and HRIS.
The identification of a suitable research methodology is an important step in enhancing the reliability and credibility of a study's findings. Qualitative, quantitative, and mixed-methods research are the three methodologies that are suitable for different studies based on various factors. One of the factors that plays an essential role in determining the research methodology is the nature of the issue under investigation. Qualitative approaches are suitable for studies that are exploratory, descriptive, and explanatory, whereas quantitative approaches are suitable for studies involving cause-and-effect relationships or hypothesis testing.27 Given the nature of the issue under investigation, a qualitative research design was employed, as the issue is exploratory in nature.
This study employed a qualitative descriptive research design, which is an approach that focuses on identifying the nature of specific issues or events under study.28 Qualitative descriptive studies involve naturalistic data through which researchers attempt to describe certain phenomena, objects, or particular situations under study. In essence, descriptive studies focus on providing an accurate description of a research issue or problem. Qualitative descriptive research design is well suited for this study since the researcher seeks to explore how human resource accounting complements human resource information systems and to address the gap in existing literature. Through this research design and approach, the researcher seeks to describe the phenomenon rather than render personal judgments or make broader interpretations.
To collect data for understanding the relationship between HRA and HRIS, 20 human resource leaders and professionals working in different organizations were requested to participate. The group of 20 participants was identified from the researcher's professional networks of human resource practitioners. The study sample was identified using convenient sampling. Convenient sampling is a technique in which a study sample is identified from members who are conveniently available to the researcher.29 The study participants were selected based on their geographical proximity, availability, and easy accessibility. The researcher ensured that these participants were human resource professionals and leaders with knowledge regarding the study variables. Data was collected from the study participants using a structured self-administered questionnaire. The questionnaire incorporated open-ended questions divided into two categories: demographic information and questions regarding the study variables.
Demographic data in the structured self-administered questionnaire included age, gender, education, and work experience. Data relating to the study variables covered human resource accounting, human resource information systems, and the relationship between HRA and HRIS. The questionnaire was distributed among 20 human resource leaders and professionals from different organizations. Prior to distributing the questionnaires, the purpose of the study and its questions were explained to participants. A total of 17 questionnaires were completed and returned within the one-month data collection period.
For data analysis, the researcher utilized thematic analysis, which is a qualitative data analysis technique that entails examining data for emerging themes and patterns that are used to answer the research question(s). This data analysis technique is used to identify, analyze, organize, describe, and report themes and patterns in a dataset.30
Some of the ethical issues in this study include privacy and confidentiality of participant data and the use of that data. The researcher addressed these considerations by ensuring voluntary participation and limiting the use of participant data to the research purpose only. In addition, study participants were not required to provide any personal identification information.
The present study examines the complementary relationship between human resources accounting and human resource information systems. The results confirm the significant relationship between these two components and their significant positive influence on each other. As evident in the study, HRIS supports HRA activities by providing the necessary tools and applications for measuring human capital. On the other hand, HRA facilitates the generation of accurate information regarding an organization's human resources by ensuring that HRIS incorporates accounting information. This suggests that HRIS and HRA should go hand in hand, as they complement each other in strategic human resource management.
Always verify citation format against your institution’s current style guide requirements.