Human Resource Management

Learning Objective: Explain HR functions and motivation theories

People are a business's most valuable asset. A five-star hotel in Pokhara can have a beautiful building and luxurious rooms, but without skilled, motivated staff -- from receptionists to chefs to housekeepers -- it will fail. Human Resource Management (HRM) is the systematic approach to managing an organization's most important resource: its people.

What Is HRM?

HRM involves planning, recruiting, selecting, training, compensating, and managing employees to achieve organizational goals. In Nepal, large companies like Nabil Bank, Nepal Telecom, and Chaudhary Group have dedicated HR departments.

Key HR Functions

1. Recruitment

The process of attracting qualified candidates for a job vacancy.

Methods:

• Internal recruitment: Promoting existing employees (e.g., a branch manager promoted to regional manager)
• External recruitment: Newspaper ads (Gorkhapatra, Kantipur), job portals (MeroJob, JobsNepal), campus recruitment at Tribhuvan University

2. Selection

Choosing the best candidate from the pool of applicants.

Selection Process:

1. Application screening
2. Written test
3. Interview (panel or one-on-one)
4. Reference checks
5. Medical examination
6. Final selection and job offer

Example: Nepal Rastra Bank conducts rigorous written exams and interviews to select officers, attracting thousands of applicants for limited positions.

3. Training and Development

Improving employees' skills and knowledge to perform their jobs better.

Types:

• On-the-job training: Learning while working (e.g., a new teller at Nabil Bank trained by an experienced colleague)
• Off-the-job training: Workshops, seminars, courses outside the workplace
• Orientation/Induction: Introducing new employees to company policies, culture, and their role

4. Compensation

The pay and benefits employees receive for their work.

• Basic salary: Nepal's minimum wage is approximately Rs. 17,300/month (as set by the government)
• Allowances: Dearness allowance, travel allowance
• Benefits: Provident fund, gratuity, medical insurance, Dashain bonus (one month's salary -- a legal requirement in Nepal)

Motivation Theories

Why do people work hard? Understanding motivation helps managers get the best from their teams.

Maslow's Hierarchy of Needs

Abraham Maslow proposed that humans have five levels of needs, from basic to advanced:

1. Physiological needs: Food, water, shelter (basic salary)
2. Safety needs: Job security, safe working conditions
3. Social needs: Friendship, teamwork, belonging
4. Esteem needs: Recognition, respect, promotion
5. Self-actualization: Reaching full potential, meaningful work

A factory worker in Biratnagar first needs a livable wage (physiological), then job security (safety), then a supportive team (social), before seeking recognition or career growth.

Herzberg's Two-Factor Theory

• Hygiene factors: Do not motivate but cause dissatisfaction if absent (salary, job security, working conditions)
• Motivators: Truly motivate employees (achievement, recognition, responsibility, growth)

Insight: Paying fair wages prevents dissatisfaction, but true motivation comes from meaningful work and recognition.

Key Term: Recruitment is the process of attracting potential candidates for a job, while Selection is the process of choosing the most suitable candidate from those applicants.

Summary

• HRM covers recruitment, selection, training, and compensation of employees.
• The selection process involves screening, testing, interviewing, and final appointment.
• Maslow's hierarchy explains human needs from basic (survival) to advanced (self-actualization).
• Herzberg distinguishes between hygiene factors (prevent dissatisfaction) and motivators (drive performance).