Human Resource Management in Nepal

Human Resources

The Human Resource Management (HRM) function is still in its infancy in Nepalese organizations, as it is in many other developing nations. In this chapter, an effort is made to identify the key elements that influence HRM policies and practices in Nepal. This is where the business climate, national institutions, and national culture all come into play. The discussion is supported empirically by three case studies.

The Labor and Trade Unions Act of 1992, which is applicable to all organizations employing ten or more people, is the most significant law governing the administration of human resources in Nepal. The employment of workers and the operation of trade unions are covered in great detail in this. The basic requirements are that every job be classified, that every employee receive an employment contract, that non-Nepalese citizens are typically not permitted to work, and that every employee maintain a file. Additionally, it mandates that the number of hours worked each week be set at 48 and that overtime pay be paid at 1.5 times the hourly rate. The Act also requires companies to offer welfare funds, accident compensation, a pension plan, health insurance, and other social benefits. It offers the government the option to put a stop to a strike while still allowing strikes, with the exception of workers providing critical services. Finally, it provides for the resolution of complaints. A labor office can be contacted to resolve a problem if both individual and collective labor disputes cannot be resolved at the corporate level. Any party may appeal to the Labor Court if they are not happy with the decision taken at this level. A comprehensive code of labor law has not yet been produced, much like other areas of the law due to the recent decade's fast change in governments. The enforcement of the current law has also proven ineffective thanks to the Labor Courts. This could be one reason why Nepal has not yet developed a system of collective bargaining.

Human Resource Management

Nepal Bank

The oldest and biggest bank in Nepal is called Nepal Bank. It was established in 1938 and now has 218 locations across the nation. The state owned more over 50% of the shares up until 1998, but since then it only owns 48%. Nevertheless, because four of the nine board members were either directly or indirectly nominated by the government, it continues to have significant influence over the bank. This explains why the rules and regulations for employees continue to be governed by those for the civil service. Currently, Nepal Bank employs 6,600 individuals, or more than one-third of all financial industry workers in Nepal. The bank cut 800 jobs from its staff in 1990. This resulted from a combination of early retirement encouraged by a large incentive and voluntary redundancy. At conferences held annually at the regional bank level, all managers debate issues and plans for future development. The bank's local, regional, and central levels then further debate the problems and solutions that have been found. The morale of bank staff isn't great, though. One clue is the separation of first and second hour practices, which is akin to the civil service. This means that even if there is no flextime, employees are only need to report for duty between the hours of 10.30 and 14.00, but otherwise avoid tasks and take dubious leaves. Managers frequently bemoan the bank's extensive bureaucracy. A department for personnel administration and a department for training are two of the nine staff departments. To institutionalize human resource development within the company, a separate training department was established around the end of the 1980s. For bank personnel, the training department plans courses and determines their training needs. The bank has a training facility, although it is deficient in basic logistical amenities like computers, photocopiers, and a library. Prior to 1990, the majority of external hiring was done without a formal job posting. Even while written tests and interviews are now required for all open positions, there is still room for family and politicians to exert their influence during the hiring and selection process. Promotion mostly rely on seniority when there is no institutional framework in place for human resource development. Young employees who are ambitious and imaginative yet can advance through the ranks slowly are dissatisfied with the scenario. The bank must adhere to governmental limits when it comes to payments. As a result, it cannot, for instance, create a remuneration structure that is performance-based. All bank employees do, however, receive a bonus in the form of a set proportion of their monthly wages, which is dependent on the bank's annual earnings. Like the first case study organization, banks likewise offer a wide range of benefits to its employees. In Nepal, there are three major banking unions, each of which is linked to a political party. The Unified Marxist-Leninist Communist Party and the Congress both have active unions in Nepal Bank. Since members want the unions to promote their interests, they have a particularly powerful influence on decisions regarding promotions and transfers. Both parties consider the union-management relationship to be unsatisfactory. The management criticizes the unions for their ongoing political intervention in banking operations and for their criticism of the bank's poor management.

According to the explanation above, conflicting contextual factors have an impact on the human resource management of Nepalese organizations. The government has made various legislation changes in the recent few decades to encourage investments by both domestic and foreign-owned businesses, but a generally uncertain economic environment still discourages the investment of human resources. The Nepalese culture is extremely receptive to contemporary Western-style management techniques, while also encouraging the adoption of traditional administrative methods like centralized management and administration. The three sample firms showed that there are significant differences between HR practices in Nepalese firms depending on elements including the level of governmental interference and openness to foreign influences. The experience of Nepal shows that transferring Western-style HRM prescriptions to developing nations has both potential and challenges. Managers and policymakers in Nepal are typically unconvinced of the advantages of investing in human resources. Particularly, it is not acknowledged that people ought to be considered as priceless assets. It is crucial to inform Nepalese decision-makers about Western literature that shows how HRM practices have an impact on performance. However, many elements of American or European HRM principles don't seem to fit well in the Nepalese environment. One example is guidelines that direct line managers to take on more of the responsibilities for human resources. Due to the inadequate knowledge and abilities of many managers, this is challenging. Additionally, Nepalese decision-makers frequently favor holding power over delegating and devolving it. Consequently, it is necessary to create HRM theories and guidelines that are more in line with company needs.

References

Flippo, Edwin B. Personnel Management. London: Oxford Press, 1980.

Gynwal, Ram Prasad. Know Nepal. Kathmandu: Bhundipuran Prakashan, 2012.

Hamilton, Francis B. An Account of the Kingdom of Nepal. New Delhi: Manjushri Publishing House, 1971.

Heywood, Andrew. Politics. New York: Palgrave Macmillan, 2002.

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