This study examined human resource management practices in foreign and Nepali firms operating in Nepal. A group of MBM students from Nepal Commerce Campus conducted interviews with 16 companies to understand their approaches to HR structures, recruitment, training, performance evaluation, compensation, and labor relations. The findings showed foreign firms localized some practices like HR departments and compensation, while transferring practices for recruitment selection, training, and performance appraisal. Maintaining labor relations and dealing with trade unions was a complicated issue for all companies. The conclusions note HR practices are a mix of localized and transferred approaches, with room for future studies to provide more insights into attracting foreign direct investment.

1. Human Resource Management
Practices in Nepal: An Empirical
Study on Foreign and Nepali
Firms
Presented By:
“Group C”
Nepal Commerce Campus
Tribhuvan University (TU)
MBM Program
2nd Semester
Spring 2014

2. Group Members
• Bibek Poudel
• Bishal Poudel
• Lata Bhatta
• Samjhana Shiwakoti
• Shristy Shrestha
• Sushant Poudel

3. Contents
1. Introduction
2. Literature Review
3. Research Questionnaire
4. Research Methodology
5. Findings
6. Conclusions
7. Limitations & Future studies

4. Introduction
This paper is about doing business in Nepal
and depicts the overview of Nepali HRM and
HR practices followed by foreign firms in
Nepal along with managing to implement
suitable practices in a distinctive cultural and
national area.

5. Literature Review
Many Management scholars had said about
various things regarding HR practices by
foreign firms while doing business in Nepal.
 Localization and standardization
 Ethnocentric polycentric and geocentric
 Isomorphism
 Convergence and divergence theory

6. Cont…
What management scholars had said about
HR practices in US, Japanese and Nepalese
companies regarding:
 HR department
 Recruitment and selection
 Human resource Development
 Performance Appraisal
 Compensation
 Labor relations

7. Research Questionnaire
Based on the subject matter, the research aims to answer
the following specific research questions:
 Is the structure of the HR department of foreign
companies operating in Nepal different from that of
Nepali companies? Are the foreign companies
transferring their structure?
 How the recruitment and selection, training and
development, compensation and benefit, performance
appraisal and labor relation practices are different in
foreign companies from those of Nepali companies? Are
any of these practices being transferred?

8. Research Methodology
• Qualitative Approach
• Exploratory Research – Based on interviews
with 16 companies.
• Primary Method
• Secondary Method

9. Findings
• HR Department of US companies – Localized
• HR Department of Japanese companies – No HRD
• Findings on Recruitment & Selection-
– US Companies: More localized, more transferred
– Japanese Companies: Hybrid
• Findings on Training & Development:
– US Companies: Localized
– Japanese Companies: Transferred
• Findings on Performance Appraisal:
– US Companies: Transferred
– Japanese Companies: Localized with improvements

10. Cont..
• Findings on Compensation:
– US Companies: Transferred (Base for initial salary) & More
localize (Base for the increment)
– Japanese Companies: Localized (Base for initial salary) &
Hybrid (Base for the increment)
• Other Findings:
– Head quarter guidance.
– Easy Aspects in working with Japanese Companies
– Difficult Aspects in working with Japanese Companies
– Easy and Difficult Aspects in Working with US companies
– What Motivates Nepali Employees?

11. Conclusion
• HR Department is localized while recruitment and selection
seems to be a mix of transferred and local practices.
• Training and development is transferred by US companies
whilst Japanese companies are more localized.
• US companies have transferred their performance
evaluation tools.
• Performance outcome in Japanese companies are more
localized
• Maintaining the labor relation and dealing with trade
unions are found to be the most complicated problem
faced by all companies.

12. Limitations & Future studies
• The research did not focus a single industry
• Selection of diverse companies might affect the
overall analysis & conclusion
• The company size of Japanese, Nepalese & US
companies are different
• Only one respondent from each company could
lead to bias
• Future studies could be fruitful for FDI to Nepal
• A study with more number of targets could be
one of the future research.

14. Thank You !!