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IJPPM
59,4 Human resource development
(HRD) for performance
management
306
The case of Nepalese organizations
Received December 2008
Revised April 2009
Dev Raj Adhikari
Accepted May 2009 Central Department of Management, Tribhuvan University, Kathmandu, Nepal

Abstract
Purpose A firms competitiveness depends on its capacity to manage performance and improve the
development of the skills and competencies of employees creating a learning environment. Although
the Nepalese economy has embraced an open market policy and is attempting to join the global
market, competitive advantage is being hindered by a failure to address human resource development
(HRD) and by poor performance management (PM) practices. This paper seeks to address this issue.
Design/methodology/approach The research article raises three research questions: What is the
concept of PM how does it relate to HRD? What is the PM and HRD context and what are the
associated issues in Nepalese organizations? and How could new structure and roles improve HRD for
PM? In order to answer these research questions Anglo-Saxon and Nepalese literature is reviewed.
Findings In order to manage PM in Nepalese organizations a clear link between organizational
objectives and outcomes should be established by developing a human capital base in organizations.
HRD professionals help to integrate HRD functions and organizational objectives by creating a
learning environment.
Research limitations/implications The study is not survey-based and thus information is
largely collected from published literature rather than perceptions of employees, management and
labour unions and the authenticity of the prescribed four-column-model is yet to be tested.
Originality/value A four-column model comprising HRD and PM context, PM issues, HRD issues,
and the new HRD structure and functions is developed and can be used as a framework for
undertaking future research. This framework is the main contribution of the paper.
Keywords Performance management, Human resource management, Human resource development,
Globalization, Competitive advantage, Nepal
Paper type Research paper

International Journal of Productivity
and Performance Management
Vol. 59 No. 4, 2010
pp. 306-324
q Emerald Group Publishing Limited
1741-0401
DOI 10.1108/17410401011038883
Background
Rarely until recently was it realized that a firms human resources and human capital
are sources of competitive advantage (Huselid et al., 1997). Competitiveness cannot be
achieved without managing performance and at the same time developing the skills
and competence of employees. Performance management potentially makes the most
significant contribution to individual and organizational learning and helps to raise
organizational efficiency and promote growth. An effective human resources strategy
can have a significant impact on issues such as organizational development and
This paper was presented at the International Workshop on Globalization and Human Resource
Management, organized by the Mahatma Gandhi Labour Institute, Ahmedabad, Gujarat, India,
6-7 November 2008.
homogenization, acquisition of competitive skills and abilities, cultural and role HRD for
changes, career development, decrease of tensions and insecurities, commitment and performance
reduced conflict in the workplace and creative employment (Lingg, 1996). To improve
performance at the organizational level it is essential to create a culture and situation of management
continuous learning of employees and of the organization (van der Sluis, 2007).
Both practices and systems of human resource development (HRD) vary with the
variation in the external environment. The human resources management (HRM) 307
literature proclaims that the field of HRD is not easy to define, because it is set in a
national context (Fombrun et al., 1984; Hendry and Pettigrew, 1990). Thus, to
understand the issues of PM and HRD raised within this paper it is essential to know
the Nepalese organizational context. With the restoration of democracy, the
Government has initiated a major reform policy to promote manufacturing
industries and their competitive power. The new Industrial Policy 1992 gave an
emphasis to deregulation, encouraging competition and placing a reliance on market
forces in the allocation of resources (IIDS, 1996). The Government has encouraged
domestic and foreign investors through measures such as licensing, tax facilities,
foreign direct investment (FDI), and other institutional arrangements. The Government
also made efforts to encourage private investors to increase investment in the country
and to bring in managerial and technical skills, modern technology, and foreign capital.
Despite these institutional arrangements, in the SAARC (Association of South Asian
Regional Cooperation) region Nepal is among the less reforming countries when
compared to India, Pakistan, Bhutan, Sri Lanka, Afghanistan and Bangladesh (The
World Bank, 2008). At the industry level, although Government has initiated various
reform measures and enacted a number of rules and regulations, the overall
performance in terms of capacity utilization of manufacturing industries is not
satisfactory (see Table I). Industries engaged in producing sugar and cement, are not
utilizing even 50 percent of their total capacity. Although, in the absence of hard data it
is difficult to indicate real causes for this low capacity utilization by Nepalese factories,
there is some evidence of poor HRD practices relating to PM in many of the Nepalese
organizations.
Despite various measures adopted by the government to improve the performance
of public sector manufacturing enterprises, these are found to be ineffective,
irresponsible, and insensitive to their duties. In relation to the service sector, a recent
investigation into the transactions of the public sector banks showed how these banks
have incurred huge losses due to interference from the government. The report shows
that they are suffering from serious losses due to politically driven and incapable
governance, mismanagement and extremely weak human resource management
practices (His Majestys Government of Nepal, 2000). As far as the productivity of
Nepalese factories is concerned, in a comparative time and motion study conducted
in Nepal and a similar factory in China it was noticed that the productivity levels of the

Sugar Cigarettes Beer Matches Cement Jute product

Description (%) (%) (%) (%) (%) (%)
Table I.
Year 2006 31 87 72 64 40 72 Capacity utilization of
some selected
Source: Government of Nepal (2006/2007) manufacturing industries
IJPPM Nepalese factory were 50 percent lower compared with the Chinese factory (Kyloh,
59,4 2008). In addition, there is a number of performance related problems faced by
manufacturing industries. They are: absence of corporate cultures, weak enforcement
of rules and regulations, poor financial management, operational inefficiencies,
overstaffing, unskilled employees, growing employee dissatisfaction, increasing
quality complaints, government interference, and lack of work motivation (Adhikari,
308 1999; Government of Nepal (GON), Economic Survey, 2006-2007). By and large, the
reform policies of the last two decades do not seem to have contributed a lot at the
industry level to raise the level of performance.
In Nepal the term HRD is used synonymously with (employee) training and
development. According to a survey carried out by the Cranfield Network, Nepal
(CRANET/Nepal, 2004) the money spent on training and development is very little in
proportion to the annual payroll. There are also organizations indicating negative
consequences of providing training for employees. For example, in a recent study by
Shrestha (2009) it is revealed that the negative consequences of employees training
and development are: demand for salary increment and promotion by the trained
employees, demonstration of overconfidence and tendency to quit the job. However, in
another study by Pandey (2008) employees in Nepalese banks still perceive a
significant positive relationship among the components such as, personal benefits,
career benefits and job-related benefits of training and components of commitment
(affective commitment, continuous commitment and normative commitment). Another
study conducted on HRD climate in public and private commercial banks of Nepal by
Dhungana (2008) reveals that:
.
Training programmes in public commercial banks are not so effective when
compared to those in private banks in terms of providing job related knowledge
and skills.
.
Per employee training expenditure is higher in private banks in comparison to
public banks.
.
There is positive correlation between training effectiveness and attitude of
employees, organizational climate and performance evaluation programmes.
.
Junior officers of the public commercial banks were found more supportive with
the training practices of the banks in comparison of senior officers.
.
In both public and private banks employees with lesser job experience have more
positive attitude towards training effectiveness.

Porter (1998) aptly argued that No company, and no country, can afford to ignore the
need to compete. Every company, and every country, must try to understand and
master competition. However, to compete and to gain advantage from the competition
it is essential to develop the human capital base through HRD mechanisms for
performance management. This paper aims to answer the following questions:
(1) What is the concept of PM and how does it relate to HRD?
(2) What is the PM and HRD context and what are the associated issues in
Nepalese organizations?
(3) How could new structures and roles improve HRD for PM?
Methodology HRD for
This paper reviews the literature to develop ideas on how PM and HRD are interrelated performance
and how they relate to the raising of levels of competitiveness of Nepalese
organizations. For the sake of simplicity, HR is taken as referring to both HRM and management
HRD initiatives. HR professionals include independent HRD consultants and
employees working at the HR department. The three research questions are the
basis of the development of a new HRD structure in Nepalese organizations to manage 309
performance. To answer research question (1) mainly Western Anglo-Saxon literature
will be taken as reference. References are taken from the Nepalese literature to answer
research questions (2) and (3).
There is a dearth of articles related to PM and HRD issues in Nepal. Very little
research has been conducted in this field in the last decades Although the context of
Nepal is completely different from the West, university textbooks offered at our
universities are almost all written by Western authors especially at Masters and
higher levels in the areas of management and economics. Many business managers,
professors and management professionals are educated and trained in the Western
perspective. In this situation the author can take references from the Western literature
to support this article. Moreover, this paper only concentrates on the development of a
model as the basis of further research and study in the future. The four-column model
clearly depicts the HRD and PM context of Nepal, PM issues, HRD issues and the new
HRD structure and functions for PM. The main limitations of this article include:
. this study is not survey based and information is largely collected from
published literature rather than perceptions of employees, management and
labor unions; and
.
the authenticity of the prescribed four-column-model is yet to be tested.

HRD for organizational performance

Performance, a multidimensional concept, refers to both aspects: executing the given
work and achieving the planned results. The term performance should be defined in
terms of the strongest linkage to the strategic goals of the organization, customer
satisfaction, and economic contributions (Rogers, 1995). According to this argument,
performance is defined in terms of behavioral process and deliberated outcome.
Understanding the concept of performance from this vantage point thus demands a
distinction that we have to make between behavior and outcome so that it will be
helpful to develop an appropriate performance measurement device. The views on PM
process and outcomes from different authors are presented in Table II.
From the Table it appears that PM is an essential management function to achieve
competitive advantage through a process that leads to a number of outcomes. Few
researches provide the evidence that regular use of PM system results in improved
outcomes (Hoque and James, 2000; Ahn, 2001; Malina and Selto, 2004). PM is related to
a number of things like specification of qualitative and quantitative requirements of
given tasks and responsibilities, caring behavior at work, preparing people to work
hard and making them smarter, increase in job involvement, raising individual and
team commitment and engagement, increasing job satisfaction and ensuring quality
and quantity of products or services that all lead to a satisfactory level of employees
performance and competitiveness ensuring the growth of a firm in an industry. Thus,
IJPPM
Campbell (1990) Performance is related to behavior, but not to outcomes and
59,4 is not to be contaminated by system factors
Deming (1986) Just what an employee has done (the result) is not sufficient,
but also the circumstances in which s/he performs must be
taken into consideration in performance measurement
Edis (1995); Bromwich (1990) Performance is not just about the process because it directly
310 comprises outputs and outcomes
Rao (2004) PM as a critical tool for organizations in todays competitive
environment for defining, planning, measuring,
understanding, monitoring and recognizing various
dimensions of performance and identifying development
needs to improve the capability of individuals to convert the
inputs into desired outputs
Lawler et al. (1998) There is a growing consensus that effective approaches to
PM offer organizations competitive advantage
Verbeeten (2008); Ittner and Larker PM, particularly in the public sector, is defined as the
(2001); Otley (1999); Heinrich(2002); process of articulating goals, selecting strategies to achieve
Table II. Kravchuk and Schack (1996) these goals, dividing decision-making rights, and measuring
Performance and rewarding performance
management process and NAHT (1991) A process that links people and jobs to the strategy and
outcomes objectives of the organization

to manage and measure the performance of individuals, it is essential to consider

behavior, process and outcomes.
Performance may be quantitative, qualitative or both. Quantitative performance is
related to the use of resources such as budget, number of outputs produced or number
of assignments undertaken in a given time. The qualitative performance is measured
against operational quality such as accuracy and error. Whether qualitative or
quantitative, performance depends on different factors like personality, leadership,
team, system and the context (Armstrong and Baron, 1998).
It is believed that performance improves when employees work both harder and
smarter (Pfeffer, 1998). Generally, employees work harder because of greater job
involvement, greater peer pressure for results, and the economic gains arising from
high performance. Similarly, they work smarter because they can use their knowledge
and skill, acquired through training and on-the-job refinement, in getting the work
done. It is reported that almost 56 percent of PM initiatives fail during the
implementation stage (de Waal and Counet, 2006). This failure basically results from
an inability to meet the behavioral requirements on the part of people in the
organizations to get started (Franco and Bourne, 2002; Chenhall, 2004; Brookfield,
2000). De Wall (2007) further argues that therefore it is imperative that organizations
pay attention to the instrumental and the behavioral side of performance
management. The typical behavioral attributes of an employee at the time of
downward performance are: reduction in job involvement, lower job satisfaction,
decreasing their effort, increased accidents and greater turnover (Burke, 2005).
As discussed earlier, managing performance is full of challenges for our
organizations. Such challenges, to a greater extent, can be well managed through
the continuous development of human capital. HRD is an important developmental
program to ensure that the organization has an institutionalized way of developing,
utilizing and committing human resources in order to meet current and future HRD for
organizational challenges. A number of authors define HRD and its impact on PM as performance
presented below in Table III.
The views of these different authors clearly indicate that HRD contributes to the management
strengthening of a firms human capital base by raising the level of know-how, skills and
capabilities of individuals in an organization and thus contributes to improved
performance and competitive advantage. HRD supports both the process and the 311
outcomes of PM to deliver properly at different levels of organizations. However, the
specific HRD climate and culture can affect the integration of PM and HRD. Rao (2002)
for example is in favor of an OCTAPACE culture (openness, collaboration, trust and
trustworthiness, authenticity, pro-action, autonomy, confrontation and experimentation)
to create a HRD climate in the organization for PM.
Turning to the relations between HRD and performance, many authors have
attempted to examine HR-performance issues and attempted to identify relationships
between HR practices and organizational efficiency and effectiveness in the last decade

Nadler (1970) HRD includes series of organized activities conducted within a specific
time and designed to produce behavioral change
McLagan (1983) HRD as integrated use of training and development, career
development, and organizational development to improve individual
and organizational performance
Swanson (1995) HRD as the process of developing and unleashing human expertise
through organization development and personnel training and
development for the purpose of improving performance
Harrison (1992) HRD is any process or activity that, either initially or over the long
term, has the potential to develop adults work-based knowledge,
expertise, productivity, and satisfaction, whether for personal or
group/team gain, or for the benefit of an organization, community,
nation, or, ultimately, the whole of humanity
Harrison (1992) HRD comprises the skilful provisions and organization of learning
experiences in the workplace and helps to improve performance, to
achieve work goals through enhancing the skills, knowledge, learning
ability and enthusiasm at every level of the organization. There can be
continuous organizational as well as individual growth. Employee
development must, therefore, be part of a wider strategy for the
business, aligned with the organizations corporate mission and goals
Armstrong (2001) HRD is concerned with the provision of learning, development and
training opportunities to improve individual, team and organizational
performance
Rao (2007) HRD managers have to engage in creating a learning environment
with the help of HRD tools. It contributes to increasing the level of
human capital by raising the level of know-how, skills and capabilities
of individuals in an organization and thus contributes to the creation
of HR environment at the time of globalization
van der Sluis (2007) HRD is the development of human resources, or the increase of human
capital of organizations Table III.
Galley and Maycunich (2000) HRD is the process of facilitating organizational learning, Human resource
performance, and change through organized interventions and development for
initiatives and management actions for enhancing an organizations performance
performance capacity, capability, competitive readiness, renewal management
IJPPM (Kaplan and Norton, 1992; Becker and Gerhart, 1996; Ulrich, 1997; Guest, 1997, 2001). A
59,4 large number of papers has been published on the subject to examine the relations
between HR practices- recruitment and selection, performance evaluation, reward and
training to firm performance (e.g. lower employee turnover and greater productivity
and corporate financial performance) (Huselid, 1995). It is suggested that firms that
engaged in a strategy formulation process that systematically and reciprocally
312 considers human resources and competitive strategy will perform better than others
(Lengnick-Hall and Lengnick-Hall, 1988). There is also an implicit but untested
hypothesis that a good fit will be associated with superior performance (Hendry and
Pettigrew, 1986).
Major findings indicating HRD and Performance relations are presented below in
the Table IV.
Although there is not abundant specific literature relating directly HRD and PM, the
above table clearly shows that there is a linkage of HRD dimensions such as skill

Becker and Gerhart (1996) To compete globally it is necessary to improve continually in

performance by reducing costs, innovating products and process, and
to improve quality, productivity, and speed to market
Lengnick-Hall and Lengnick- An HR system can be a unique source of competitive advantage
Hall (1988) especially in the situation of high fits between its internal and external
components. It is suggested that firms that engage in a strategy
formulation process that systematically and reciprocally considers
human resources and competitive strategy will perform better than
the others
Hendry and Pettigrew (1986) There is also an implicit but untested hypothesis that a good fit will be
associated with superior performance
MacDuffie and Krafcik (1992) Lean production is more effective than a mass production system to
increase both productivity and quality. However, the success of a lean
production system depends on high commitment human resource
policy, broad job classification, multi-skilling practices, profit/gain
sharing, a reciprocal psychological commitment between a firm and
employees, employment security and reduction of status barrier
Delaney and Huselid (1996) Progressive HRM practices (including staffing, training and incentive
competition) are positively related to perceptual measures of
organizational performance
Huselid (1995) High performance work practices (e.g. contingent pay, hours per year
after initial training, job analysis, hiring from within vs outside,
grievance procedures, formal performance appraisal, and promotion
rules) are closely related with lower employee turnover and greater
productivity and corporate financial performance
Mayrhofer et al. (2002) Three major HR practices variable and performance-based
compensation, decentralization and investment in human capital are
significantly related to organizational performance
Pfeffer (1998) The best practices to increase organizational performance are
employee participation, empowerment, job design, team-based
production systems, extensive employee training, and performance-
contingent incentive compensation
Table IV. Urlich (1999) Productivity was found to be linked with harmonious industrial
HRD and performance relations, quality of work life programmes, quality circles, practices in
relations training and recruiting and incentive compensation systems
development and training and organizational performance. Thus, the above table is HRD for
considered to provide sufficient evidence to establish a relationship between HRD and performance
PM.
management
PM and HRD context and issues in Nepalese organizations
As discussed earlier, immediately after the restoration of democracy in 1990, the
government initiated a major policy reform to liberalize the economy. After the new 313
Industrial Policy 1992 was announced, an emphasis was given to deregulation,
encouraging competition and reliance on market forces in the allocation of resources
(IIDS, 1996). Although the government initiated a number of reforms in the last 20
years, the economy has not responded positively in terms of GDP growth. Foreign
investment is low in the region. The government is still the largest employer in the
country and the culture of full-fledged private sector development has yet to emerge.
For the last 15 years, the country has been suffering from political instability and civil
unrest.
Nepalese decision makers are now facing a number of challenges, both in internal
and external contexts. Externally, they have to cope with many unexpected changes in
the external environment due to rising competition especially in the service sector.
Weak forms of liberalization and deregulation, longstanding political instability, lack
of proper institutional mechanism for enforcing rules and regulations, rising
unemployment and low growth rate are the major forces exerting pressure on internal
performance management systems. Internally, companies have to take a number of
initiatives to raise the capability of employees making them ready to provide delivery
to cope with external challenges. The following issues remained most prominent in the
case of PM:
.
Lack of corporate culture. Public companies lack an appropriate corporate
culture. Appropriate codes of conduct are needed to develop and practice in an
effective manner (Government of Nepal (GON), Economic Survey, 2006-2007).
Problems are emerging relating to employee motivation, declining morale,
deteriorating corporate culture, poor staff empowerment, lack of harmonious
relations between management and employees and fewer initiatives in the
development and implementation of equal employment opportunities
(CRANET/Nepal, 2004).
.
Unproductive staff. Many employers feel that they have unproductive staff
and therefore it is difficult to use them cost-effectively. They also have
problems relating to the management of change, quality management and
customer care. Moreover, they are expecting to face challenges relating to
recruitment of quality staff and retaining them in the future (CRANET/Nepal,
2004).
.
Lack of mechanisms to implement prevailing Labour Act. The Labour Act 1992 is
not properly implemented at the organizational level because of the lack of
proper HR and institutional mechanisms (Adhikari, 2005). For example, a large
number of factories (almost 61 per cent) have not provided appointment letters,
77 per cent of organizations have not reappointed their temporary workers even
after completing 240 days etc. as per the rules of Labour Act, 1992 (Adhikari,
2005).
IJPPM .
Increasing role of line managers in training and development. A previous study
59,4 suggests that the devolvement of HR responsibility in line managers is likely to
be limited by both the prevailing power structures and the limited skills. This
difficulty is based among those to whom such power could be devolved
(Adhikari and Mueller, 2001). However, international executive report (IER) of
Cranet survey (CRANET/IER, 2005) shows that the primary responsibility for
314 training and development in 35 per cent organizations is given to line
managers.
.
Business functions are not properly integrated and coordinated. Different
business functions such as marketing, finance, production are not properly
integrated and coordinated, and the role of HR therein is not defined (Adhikari,
1999). There is no clear linkage between the corporate plan and the manpower
plan, especially in public enterprises.
.
Lack of performance-based system. With the exception of joint venture banks no
performance-based system is used in public and family-owned firms. Similarly,
in public enterprises there is no link between the result of performance
evaluation and other HR activities such as, training and development, reward
management etc (Adhikari, 1999). It might be because of such reasons, except in
joint venture banks, jobs are not interesting in terms of the challenges they offer
to workers and employees in public enterprises (Adhikari, 1992, 2008).
.
Distorted flow of communication and information. Employee relations are
distorted in public and private sector undertakings. It is mainly due to the lack of
a free flow of communication and information and of high feeling of status and
prestige of the top management (Adhikari and Mueller, 2001).
.
Low pay level and rising absenteeism. Workers are moderately satisfied with their
working conditions. They feel little threat of layoff. A large number of
supervisors and workers are not familiar with the current policy of the
organization (Adhikari, 1992). The present level of pay is one of the most
dissatisfying factors on the job for all workers. Workers are also dissatisfied with
their personal life because of the large number of family dependants. A recent
study (Kyloh, 2008) shows that one factor contributing to absenteeism problems
is low wages. Kyloh (2008) has estimated that the level of absenteeism is between
20 percent and 40 percent of the total workforce.
.
Proliferating unionism. In Nepal enterprise-based unions are proliferating. On
average, 57 per cent of organizations are unionized. In the last three years, the
influence of trade unions has increased by 34 per cent in 15 per cent of
organizations. 60 per cent of organizations recognize trade unions for the purpose
of collective bargaining. The role of representative trade union staff to
communicate with the management in the major HR issues has increased in 26
per cent organizations in the last three years.

The following HRD issues are emerging in Nepalese organizations in relation to PM

related issues as outlined above (CRANET/Nepal, 2004):
.
Lack of interpersonal and communication skills of the employees. The majority of
employees in organizations are lacking interpersonal and communication skills.
Inter-personal skills play leadership and liaison roles. Better inter-personal and
 communication skills of people will help to supervise the work done, evaluate HRD for
performance and develop employment relations. Changed HRD structures are performance
also necessary in these organizations to enhance employee relations.
management
.
Lack of professional and vocational skills. In the absence of appropriate
professional and vocational skills amongst the workforce, managers face
problems in implementing their business strategy and product or service
development ideas. 315
.
Lack of leadership skills of managers. Leaders should be able to project a
corporate culture that contributes to organizational performance. Leadership
training is essential for Nepalese managers to strengthen the capability of
directional planning, change management, project management and people
management.
.
Low investment in HRD. The money spent on training is generally a very
small proportion of the annual payroll. In Europe, such investment is between
2 and 4 percent on average (CRANET/IER, 2005). In Nepal, it is only 0.5
percent in proportion to the annual payroll (Adhikari, 2008). Organizations
specifically indicated challenges relating to the development of senior
managerial staff and to raising their contributions to achieve organizational
goals.

The new HRD functions and structure for performance management

Before entering into the new structural requirements for organizing HRD functions to
manage performance, we first take a look at how HRM concepts and practices are
evolving and how this affects the role of HRD professionals. Based on the available
literature, this author assumes that HRM is the function of both the HR department and
line managers and thus as the roles and responsibilities of HR department and line
managers change, so will the prevailing HRD structure as well.
The emergence of new HRM theory and practice in the 1980s followed a persistent
pressure on US industries in the 1970s from increased competition from inside and
outside business conditions. Traditional American personnel management and
industrial relations systems were challenged by the process of globalization, rapid
technological advances, shorter product life-cycles, and changing customer and
investor demands (McKenna and Beech, 1997). Many US industries were facing the
under-utilization and unemployment of human resources. The reasons for such
problems were adverse union-management relations, low employee motivation and
trust in management, hierarchical management, restrictive work practices, and, finally,
resistance of the employees to cope with the changing competitive environment (Beer
et al., 1984). In such an environment, it was difficult for companies to compete without
a specific initiative such as continuous performance improvement, innovation in
products and processes, and quality production. Prompted by these challenges,
American business began to place greater emphasis on the management of human
resources to improve productivity and quality and thus to be competitive both at
internal and external levels. As a result, the USA revitalized its organizations making
human resources more committed and efficient to gain competitive advantage both in
national and international markets (French, 1986).
IJPPM So far as the changing role of HRM is concerned, in 1979, a survey of members of the
59,4 American Society of Personnel Administration revealed that (Toedtman (1980), cited in
Blunt (1990)):
. 77 percent saw their role in the 1980s as having to broaden into such areas as
organizational design; and
.
93 percent saw a necessity to contribute to strategic decision-making in the
316 organization.

In the UK, some executives began to realize the new roles and responsibilities of the
personnel department, such as communication management, quality, team building,
problem solving in teams and the like (Storey, 1992). Prominent HR expert Ulrich (1998)
believes that in organizations, the roles and responsibilities of HR are not only defined by
what it does, rather by what it really delivers for the satisfaction of customers, investors
and employees.
Since HRM roles and responsibilities have been changing and evolving to a more
strategic nature, the new role of HRD professionals has also been emerging. HRD is
becoming a major tool for learning and development initiatives such as knowledge
management. It is believed that many knowledge management projects have failed
because employees were not inspired to use them (Breitfelder and Dowling, 2008). HRD
in a knowledge-based economy plays a significant role in knowledge management
taking joint responsibility with managers and employees. The role of HRD
professionals is now expected to include contribution to value creation, creating
organizational capabilities that enable the firm to thrive in a fluid economy, and
leverage the other activities and resources of the organization (Lengnick-Hall and
Lengnick-Hall, 2005). These two authors categorize four basic HR roles in the
organizations of the knowledge-based economy: human capital steward, relationship
builder, knowledge management facilitator and rapid deployment specialists
(pp. 41-49).
There has also been a rising awareness of the HR responsibilities of line managers
(Larsen and Brewster, 2003) together with awareness of the reluctance from some line
managers to take such responsibilities (Gratton et al., 1999). In such a situation HRD
has to play a role to strengthen line managers HR skills and to motivate them to take
part in HR initiatives.
HR is becoming a strategic partner within many businesses (Ulrich, 1998) and
senior managers are asking HR professionals to define overall organizational
architecture in terms of organizational culture, competencies, rewards, governance,
work process and leadership. However, Truss et al. (2002) argue that success depends
on the ability of an HR department to perform such a role effectively and the ability to
influence others to accept this changed role for HR. In such cases, HRD is responsible
for creating a corporate learning environment. It should focus on action-learning, and
increased instances of executive-led dialogue about the business challenges facing the
organization (Breitfelder and Dowling, 2008). It has to work as catalyst and facilitator
to foster creativity across organizational boundaries, leadership development, and
revenue enhancement by increased employee engagement.
Because of globalization, innovation in production and information technology, the
pace of change can be amazing. HR professionals have an important role to play in
making people accept the change. They have to create high-performing teams, reduce
the cycle time for innovation, and/or ensure that new technology is appropriately HRD for
deployed (Ulrich, 1998). In such cases instead of the traditional administrative role, performance
the HR department may have to play a client-centered role (Caldwell, 2003) in
delivering best practices such as employment security selective hiring, self-managed management
teams and decentralization, high compensation contingent on performance, training,
reduction of status differences, and the sharing of information (Pfeffer, 1998).
The main role of HR professionals is to ensure that employees are engaged that 317
they feel committed to the organization and contribute fully. They must be involved in
providing training for line management in order to achieve high employee morale, offer
opportunity for personal and professional growth and provide resources, which help
the employees meet their demands (Ulrich, 1998). HR professionals have to work both
as coach and therapist. The situation of lifelong membership of an organization has
become weaker and the changes on job have come more rapidly as a response to
professional development needs (Mabey et al., 2006). As a result, personal learning and
development is becoming more important than status (Arthur and Rousseau, 1996). HR
professionals can help to increase professionalism of employees in organizations.
HR professionals have to engage in organizing and running mandatory
management development programs where the top management team participates
in developing their leadership skills (Mabey et al., 2006). In spite of good HRM
practices, trade unions and employee representatives still have a strong influence on
the introduction and implementation of HRM instruments in some countries (Heller,
1993). Unions are now more interested in productivity improvement (Conwey, 2005).
HR professionals, at the enterprise level can take help from employee representatives to
implement HRD initiatives and thus to increase productivity.
With the above review in mind the main questions emerging are:
.
Can traditional HRD structures work to cope with context and issues of PM and
HRD?
.
Is a traditional HRD structure mostly focusing on training and development
enough to address the current PM related issues?

If not, how can we organize HRD functions in such situations? Rao (2002) suggests that
the time has come to re-examine the appropriateness of HRD structures. In India, the
first separate HRD department was constituted by Larsen and Toubro in 1975.
According to Rao (2002) HRD functions can be organized in different ways such as:
.
a dedicated and fully manned HRD department;
.
a HRD cell in the units or locations;
.
high profile HRD chief with limited staff;
.
HRD task force comprising line managers with a HRD-trained leader;
.
CEO handling HRD;
.
the training manager handling HRD; and
.
personnel chief handling HRD etc.

In Nepal, the first HRD department is established by the then Royal Nepal Airlines
Corporation (RNAC) in the beginning of the1980s. However, in many public sector
organizations, HRD responsibility was given to the personnel or administrative
IJPPM department prior to that. In some of these organizations training chiefs handle HRD
59,4 with separate training centers. This is not at all sufficient to deal with above described
PM and HRD issues. This paper has already highlighted that performance
management in Nepalese organizations largely depends on interpersonal
communication, professional and vocational and managers leadership skills.
Therefore, the new HRD structure at the organization level has to consider a
318 four-column model to deal with current PM related problems (Figure 1).
All dimensions of this four-column model are interrelated. Organizations with
above mentioned HRD and PM related issues should form a HRD team comprising HR
department head, line managers, HR professionals, union representatives. Support
from top management is essential for this to work effectively. The team will work for
improving the current HRD issues. As presented in the above table, PM and HRD
issues are somehow affected by the national context. Although in the absence of hard

Figure 1.
Four-column model for
PM and HRD initiatives in
Nepalese organizations
data it is difficult to decide the degree of effect of these contextual factors on HRD and HRD for
PM issues, these are important to consider while deciding about future HRD structures performance
at the organization level. In all cases, HR professionals have to play a major role in
raising team capability to deliver and this must be more than doing something to management
them.

Discussion and conclusion 319

PM and HRD initiatives seem interrelated in making a firm adaptive in the changing
HR context. As discussed earlier by Edis (1995) Bromwich(1990) Rao (2004) and others,
PM should be considered as process and outcomes. It should not just be regarded as
related to behavior as indicated by Campbell (1990). While managing PM in Nepalese
organizations a clear link between work process and outcomes should be established
by the improvement of employees skills. This is only possible, as aptly stated by
McLagan (1983), Swansons (1995), Harrison (1992), and Rao (2007), when HRD plays a
significant role in creating a learning environment that helps to integrate business
strategy and organizational outcomes. HRD helps not only to improve the PM process
but also improves individual behavior and organizational outcomes. A review of
Western literature on professional HR roles provides sufficient evidence that
significant changes in the previous HR roles are noticed due to the changes in HR
internal and external contexts as discussed earlier by many authors including
McKenna and Beech (1997), French (1986), Toedtman (1980, cited in Blunt (1990),
Ulrich (1998) and Beer et al. (1984). As a result, the role of HR professionals has also
been changing. Some of the major changes in professional roles are: working as human
capital steward (allows for a relationship between organizations and employees in
which each makes significant, self responsible contributions to organizational success)
and relationship builder (focus on crating programs that enable employees to
encourage, facilitate, nourish and sustain relationships among fellow employees,
customers, suppliers and even rivals.), supporting line managers to take part in
strategic decisions and making HR function able to influence in organizations, create
environment for learning and other as described in the four-column-model. HR
professionals have to train the line managers to implement the best practices that help
to raise strategic capabilities of employees.
As discussed earlier, Nepalese organizations are largely facing PM related issues
such as: poor employee relations, a lack of an appropriate organizational culture,
declining productivity of workers, lack of performance based system, low pay and
rising absenteeism and such alike. Immediate action is needed on developing
interpersonal and communication skills, professional and vocational skills and
leadership skills. This needs investment in human resource initiatives. Particularly, as
the above four-column model depicts, HRD professionals have to develop a holistic
approach to deal with HRD initiatives at the organizational level. They have to take
support from union representatives, line managers and functional heads to implement
the new structures. However, they should not engage themselves in the structure as the
key player. A very prominent HR professional Matthew D. Breitfelder aptly argued
that, Im now a Tenzing Norgay, Hillarys Sherpa guide on the history-making
Everest climb, coaching others on how to craft strategy, navigate the terrain, and get to
the top. Like a good Sherpa, Im constantly trying to scale this approach with a range
of techniques to maximize my impact. The successful implementation of HRD for PM
IJPPM in Nepalese organizations largely depends on effective teams following a holistic
59,4 approach to navigate organizations around the various obstacles to raised
competitiveness in order to achieve their objectives.

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324 Further reading

Bruke, R. and Cooper, C.L. (Eds) (2005), New Directions in Human Resource Management,
Routledge, London.

About the author

Dev Raj Adhikari is the Head of Central Department of Management, and the Director of the
M. Phil Programme (management), Faculty of Management, Tribhuvan University, Kathmandu,
Nepal. He has received a doctorate degree from the Institute of Economic and Social Sciences,
University of Innsbruck and a post-doctorate degree from the same university. He has published
two dozen articles in Nepalese journals and authored seven books in human resource
management, organizational behaviour, principles of management and strategic management.
Currently, he works as Chief Editor of Synergy: A Journal of Management. He has presented a
number of papers in national and international level seminars. He worked as a Visiting Professor
at the McMaster University (Canada), University of Philippines (Philippines) and University of
Innsbruck (Austria) and as Visiting Pesearcher at Japan Institute of Labour Policy and Training,
Ministry of Labour, Japan. Dev Raj Adhikari can be contacted at: devraj@enet.com.np

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