Human Resource Management for the Local Government: Measuring its impact on Organizational Performance
Two types of government deliberate public services in Nepal: the central government and the local government. While the central government governs the sectoral ministries, departments and their regional and district offices, the local government supports the local governance. Nepal has a two-tier system of the local governance, with village and municipal bodies as the lower tier and district bodies as the higher. The village bodies are called Village Development Committees (VDCs) while municipalities serving the same function in town areas. The district bodies are the District Development Committees (DDCs). These are the front units of central government to deliver service to the people. There are 3913 VDCs, 58 Municipalities and 75 DDCs in Nepal. Each district has a district council, which serves the same role as Village Councils and Municipal Councils with an executive committee (Local Authority Fiscal Commission, 2000). The local government bodies in Nepal have critical roles in development, as they are only institutions which are relatively closed to people and operate based on the decentralized development approach.
Human Resource Management (HRM) is sometimes referred to as a "soft" management skill in an organization. An effective practice within an organization requires a strategic focus to ensure that human resources can facilitate the achievement of organizational goals. The effective human resource management also has an element of risk management for an organization which, as a minimum, ensures legislative compliance. Research in the area of HRM has much to contribute to the organizational strategy, practices and performance. For the last 20 years, empirical work has paid particular attention to the link between the practice of HRM and organizational performance manifested mainly in improved employee commitment, lower levels of absenteeism and turnover, higher levels of skills and therefore higher productivity, enhanced quality and efficiency.
The certain best practices in HRM will result in better organizational performance Pfeffer (1994) has argued that there are seven best practices for achieving competitive advantage through people and 'building profits by putting people first'. These practices included: providing employment security, selective hiring, extensive training, sharing information, self-managed teams, and high pay based on company performance and the reduction of status differentials. Becker and Gerhart, (1996) have introduced the concept of b-fit, or the contingency approach to HRM. They stated that HRM improves performance where there is a close vertical fit between the HRM practices and the company's strategy. This link ensures a close coherence between the HR people processes and policies and the external market or organization strategy.
There are various theories about the nature of this vertical integration. For example, a set of 'life cycle' models argue that HR policies and practices can be mapped onto the stage of an organization's development or life cycle (Kochan and Barocci, 1985). Competitive advantage models take Porter's (1985) ideas about strategic choice and map of a range of HR practices onto the organization's choice of competitive strategy. Finally 'configuration models' by Delery and Doty (1996) provide a more sophisticated approach which advocates a close examination of the organization's strategy in order to determine the appropriate HR policies, practices and performance. However, this approach assumes that the strategy of the organization can be identified - many organizations exist in a state of flux and development.
Significance of the study
This research is expected to make many important contributions. First of all, it will help to develop a new theoretical approach to measure organizational performance...