What is the need and importance of HR valuation and accounting?

HR valuation tells the potential investors about the human assets of a company. The investors can assess the returns from human assets which infect is the return they get from the people who are managing their investments. It also assures the customers the company that it has the requisite human capital reserves to service their demand. The employees of the company also feel assured when they come to know that they are counted as assets by the company and not expenses. HR valuation also serves as a tool for improved performance appraisal and man power assessment. It also helps the management in realizing the present value of its future commitment of providing employee compensation. It also helps the management in taking appropriate decision regarding the use of human assets. Managers get valuable feedback regarding the effectiveness of their HR policies and practices.