Drivers of Employee Engagement in Nepal's Private Sector: A PLS-SEM Analysis of Recruitment, Training, Performance Appraisal, and Compensation Practices in Kathmandu Valley

Abstract

Background: Employee engagement is a key driver of a company's competitive advantage and performance. Employee engagement creates opportunities for employees to connect with their managers, employees, and organizations through the human resource management practices.

Purpose: The objective of this research is to study the impact of human resource management practices on employee engagement in private sector of Kathmandu valley.

Design/methodology/approach: The explanatory research design was used in this study. A purposive sampling method was used to collect data from 400 private sector’s employees in Kathmandu Valley. Social Exchange Theory and Work Engagement Theory is utilized. To analyze the data, both descriptive and inferential statistics were used. SEM was used to analyze the data.

Findings: The study's findings showed that almost all respondents had sufficient understanding of creating efficient HR practices as the primary factor influencing employee engagement within the company. The major findings of the study indicate that there exists a positive impact of human resource practices such as recruitment and selection, training and development, performance appraisal, and compensation and reward on employee engagement. The main challenges faced regarding employee engagement in organization are lack of training and development effectiveness and HR department are responsible for addressing these challenges, by offering more training and development programs problems can be solved.

Conclusion: The findings revealed that effective HRM practices such as recruitment and selection, training and development, performance appraisal, and compensation and reward are crucial for effective employee engagement in private sector.