The human resource practices in Nepalese companies come from administrative practices that have gradually phased out over time. Over time, the personnel department has become the employee welfare/relations department, and then the human resource function. In the early years of 2000, human resource practices were widely accepted in many industries.
The adoption of professional HR practices in Nepal is a recent phenomenon. It has gained momentum in the past 10 years because it gives companies a competitive advantage. Some of the leading Nepalese organizations have taken the initiative in managing their employees’ skills and knowledge.
Strategic human resource practices
Strategic human resource practices help an organization manage and develop its workforce to meet its needs. These practices are important because they help the organization focus on attracting, developing, motivating, and retaining the right employees for the right jobs. This helps the organization stay ahead of changing needs and trends, and achieve its goals more quickly and efficiently.
Here are some reasons why strategic human resource practices are important:
● Attract and retain top talent
Strategic human resource practices help organizations to attract, recruit, and retain top talent by providing them with opportunities for career growth and development. This, in turn, helps to increase employee engagement and satisfaction, which leads to better performance.
● Aligning human capital with business objectives
Strategic human resource practices help in aligning the organization’s human capital with its business objectives by identifying the skills and knowledge required for achieving the desired results. This enables the organization to focus its efforts on developing its workforce in the areas that are critical for success.
● Enhancing productivity
Strategic human resource practices help to enhance the productivity of the workforce by providing them with the necessary tools, resources, and training required to perform their jobs effectively. This results in increased efficiency and effectiveness, which leads to improved organizational performance.
● Managing organizational change
Strategic human resource practices help in managing organizational change by providing employees with the necessary support and resources to adapt to new roles and responsibilities. This ensures a smooth transition and minimizes the negative impact of change on the organization.
● Ensuring legal compliance
Strategic human resource practices help in ensuring legal compliance by developing and implementing policies and procedures that are in compliance with relevant laws and regulations. This reduces the risk of legal issues and protects the organization from potential liabilities.
Overall, strategic human resource practices are critical for the success of an organization as they help in managing and developing human capital in a way that aligns with the organization’s strategic goals and objectives.
Human resource practices and organizational performance in context of Nepal
Human resources and organizational practices work together to help an organization achieve its goals. Some ways this happens are by helping to manage and oversee how employees are hired and trained, and by setting policies and procedures that help keep the organization running smoothly.
● Organizational practices shape human resource practices
The organizational practices and culture influence the human resource practices in an organization. For instance, if an organization values teamwork and collaboration, its human resource practices may focus on promoting team-based work and providing opportunities for employees to collaborate with each other.
● Human resource practices impact organizational performance
The human resource practices, such as recruitment, training, performance management, and compensation, have a direct impact on the organization’s performance. By hiring and retaining the right talent, providing them with necessary training and development, and aligning their goals with those of the organization, human resource practices can help in improving organizational performance.
● Alignment of human resource practices with organizational goals
Human resource practices should be aligned with the organization’s goals and objectives. This alignment ensures that the human resource practices support the achievement of organizational objectives, leading to improved performance.
● Organizational practices affect employee behavior
Organizational practices, such as leadership style, communication, and decision-making, affect employee behavior and performance. Human resource practices, such as performance management and training, can be used to reinforce the desired behaviors and improve employee performance.
In summary, human resource practices and organizational practices are interconnected and have a significant impact on the success of an organization. The alignment of these practices is crucial for improving organizational performance and achieving its goals and objectives.
Human resource practices in large-scale software companies
Human resource practices in large scale software industries are critical for the success of the organization. Here are some of the common human resource practices followed in software industries:
● Recruitment and selection process
Large-scale software companies adopt both internal and external hiring. Predominantly, they prefer internal hiring for middle and senior levels like team or module leader, project leader, project manager. On the other hand, for entry-level positions like software trainees and software programmers, they prefer hiring through campus placement, employee referrals, media advertisements and through private consultants.
In the selection process for entry-level positions, more importance is given to candidates’ technical skills. For middle and senior levels, the importance of both technical and soft skills is measured equally. Some specific skills, like creativity, leadership, attitude, responsibility, and sharing problem-solving skills, are constantly measured in the selection process. For entry-level positions, the interview process is more structured, while for middle and senior levels the interview process is unstructured, depending on the candidate’s expertise
● Training and development:
The training and development is an ongoing process and oriented towards the career growth of employees at all levels in the organization. Software trainees are exposed to have a real-time experience soon after the induction and formal technical training programs. The training program are broadly classified as general and specific training programs. The general training covers the basic trainings like induction program, communication (formal and informal), leadership, problem solving, creativity and team building.
The specific training programs are need-based like time management training for project leaders and project managers, foreign language training offered to individuals selected for onsite assignments, training on mentoring and empowerment, etc. Technical training program are also project or need-based and employees are being trained on a periodic basis. At times cross functional and domain training programs are also being offered to employees at all levels in the organization.
● Performance appraisal
360-degree performance appraisal is very common across the levels or hierarchies in large-scale companies. The employees are appraised based on self-appraisal, feedback from immediate supervisor, feedback from supervisors of other departments, feedback from subordinates and feedback from human resource manager. The employee is given a chance to express his or her view on the performance rating in a performance appraisal discussion with their managers. Mostly the appraisal process takes place once in a year, i.e., every employee in the company is appraised at least once in a year and feedback is shared accordingly.
The performance measure is based on the visible work output and also certain behavioral aspects or competencies such as creativity, involvement in motivating the team; information sharing, group participation and ability to mentor are also measured. In addition to these performance measures the software trainees and programmers are appraised based on their punctuality to work and task completion, work discipline, communication, flexibility and self-initiation at work place.
● Compensation & benefits
Employees at all levels are compensated and rewarded based on their performance at work, performance ratings play a pivotal role in determining the compensation hike percentage and variable or incentive or bonus pay outs. Variable pay may or may not be applicable to all levels, but the variable pays out percentage differs based on company’s profit and revenue growth. Employees are also eligible for special incentives based on the measures like involvement in knowledge sharing and developing others (peers or subordinates) in work environment.
Group incentives are given to best performing groups or teams. Competency-based pay is being practiced for project leaders, project managers, senior project managers, delivery leaders and delivery heads. In few companies, top performers at all levels from software trainees to delivery heads are entitled for employee stock option plan. Apart from the monetary benefits, employees are also given medical insurance, educational opportunities like higher studies, technical certification courses, participation in national and international seminars and conferences.
● Work-Life Balance:
The software industry is notorious for its long work hours and demanding deadlines. As a result, many large organizations are now offering work-life balance initiatives, such as flexible schedules and telecommuting options, to help employees maintain a healthy work-life balance.
Human resource practices in medium-scale and small-scale software companies
● Recruitment and selection process:
Employees across the levels or hierarchies are hired predominantly through external hiring: campus placements, private consultants and through media advertisements. Technical skills, leadership skills and interpersonal skills are given equal importance in the selection process while hiring for team leaders, project leaders and project managers. Group behavior, teamwork, attitude towards knowledge sharing ability and learning ability is tested in the selection process for software trainees and programmers. The interview process for entry level hiring is a mix of both unstructured and structured while for middle and senior levels the interview process is more of unstructured.
● Training and development
‘On job training’ is normally given to all levels including entry-level positions and for lateral hires. Training modules are specially designed on the basis of project requirements, i.e., need-based training. Since there is a cost element attached to emerging technologies or new software platforms, the technical training is always need-based. Apart from technical training, general soft skill trainings like communication, leadership, creativity, teamwork and quality management systems is being imparted to employees at all levels.
Mentoring concept is gradually emerging in small and medium-scale software companies, currently they don’t practice the mentor or mentee concept at workplace, whereas they have an individual development plan in which the respective reporting managers act as mentors. Project leaders or managers and above are being formally trained to become future mentors. Medium and small-scale software companies largely rely and believe in peers teaching peers and individual empowerment, by which any new technical expertise is quickly trickled down to all levels.
● Performance appraisal
Appraisal system is purely based on individual’s performance and it is a top-down approach, i.e., individual’s performance is rated by their respective reporting and one over manager. The entire process starts with the base of self-appraisal for which the appropriate feedback is given to the employees.
Performance evaluation parameters also include group behavior, teamwork, information sharing and creative thinking. Predominantly performance appraisal system is short-term, i.e., conducted for all employees in the system once in six months. The performance ratings are directly linked to the compensation hike percentage and also determines performance-based incentives or bonus, which happens mostly once in a year.
● Compensation
To determine and fix the year-on-year compensation increase percentage, performance-based pay is being practiced. New initiatives or innovative practices being driven at workplace by any of the individuals will have an edge to get better compensation hike percentage and variable pay (if applicable). Variable pay is always the function of fixed pay.
Financial benefits like leave travel allowance, house rent allowance and medical allowance are part and parcel of employee’s monthly gross salary. Over and above the salary package employees are also given the benefit of fee reimbursement for technical upgradation through certification or exams like software testing, MCSE, Java and advanced Java certifications, etc., which is part of individual development program.
Conclusion
Human resource practices in Nepalese software industry have come a long way in terms of HR excellence by defining and designing the HR function in a way to achieve organization’s mission. HR excellence also acts as a characteristic element to prepare and drive the employees towards the identified culture of the organization.
As observed in this study, it clearly signifies the strategic orientation towards people, process and culture. HR excellence can be observed only when the HR practices are looked at as two-way process i.e., both the organization and employees are equally responsible to design, execute and promote internally, which is the case in large software organizations. In the coming years, a paradigm shift towards HR excellence is essential to create configurations/systems of human resource practices which are directly aligned towards the organization’s strategy.
