HUMAN RESOURCE MANAGEMENT AND LEARNING CAPABILITIES IN NEPALESE COMMERCIAL BANKS

Purpose: This paper aims to empirically examine the linkages between best human resource management (HRM) practices, organizational learning capability (OLC) and organizational performance (OP). The proposed framework and findings intend to add to the understanding of the specific processes that mediate between best HRM practices and OP in Nepalese context. Design/methodology/approach: A survey research strategy was followed to carry out the research. The sample frame for this study consisted of the officer level employees from 11 Nepalese commercial banks. The final research sample consisted of 252 respondents. Structural equation modeling (SEM) technique was used to test the model and analyze the data. Findings: This paper proposes an answer to how best HRM practices can influence performance. Results indicate that best HRM practices affect OLC and OP significantly. Further, OLC also affects OP significantly. The results of this study also revealed that OLC mediates the relationship between HRM and OP partially. Further, the result also showed that the effect of best HRM practices to OP through OLC is stronger than its direct effect showing the significant impact of OLC in HRM- OP relationship. Research limitations/implications: Use of cross-sectional data, relatively small sample size, use of subjective measurement of HRM practices, OLC and OP are the possible limitations of the study. Practical implications: This study portrays the mechanism through which HRM contributes towards better OP. It can help human resource practitioners and/or managers to understand better the importance of OLC in the way best HRM practices affect OP. Originality/value: This paper attempts to explore and test the processes through which HRM practices influence organizational performance. Moreover, the value of the human factors in enhancing organizational learning initiatives for organizational performance is explored. The proposed mechanism will help Nepalese HR practitioners to design their HRM policies and practices towards enhanced OP. This study is particularly important in Nepalese context where organizations are still reluctant to invest in innovative HRM practices.