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Analysis of CloudFactory on the basis of their Human

Resource Management Strategy and Leadership Strategy

Presented To:
Nishtha Rajbhandari FOBM 2021

Presented By:
Nikhil Shrestha

5 July, 2021
Table of Contents
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1. Introduction..................................................................................................................................4
1.1 Scope of the study..................................................................................................................4
1.2 Purpose of the study...............................................................................................................5
1.3 Sources and methods..............................................................................................................5
2. Findings-......................................................................................................................................5
Human Resource Management Strategy-....................................................................................5
 Motivation.........................................................................................................................5
 Recruitment.......................................................................................................................5
 Training and Development................................................................................................6
 Benefits and compensation...............................................................................................6
 Retention...........................................................................................................................6
Leadership Strategy-....................................................................................................................7
 Leadership style................................................................................................................7
 Nature of Leadership.........................................................................................................7
 Vision................................................................................................................................7
 Delegate and empower......................................................................................................8
 Training.............................................................................................................................8
3. Discussion of Findings-...............................................................................................................8
Human Resource Management-...................................................................................................8
 Motivation.........................................................................................................................8
 Recruitment.......................................................................................................................8
 Training and Development................................................................................................8
 Benefits and compensation...............................................................................................9
 Retention...........................................................................................................................9
Leadership Strategy-....................................................................................................................9
 Leadership Style................................................................................................................9
 Nature of Leadership.........................................................................................................9
 Vision................................................................................................................................9
 Delegate and empower......................................................................................................9
 Training...........................................................................................................................10
4. Conclusion-................................................................................................................................10
5. Recommendation-......................................................................................................................12
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List of References..........................................................................................................................13
Appendix........................................................................................................................................14

1. Introduction
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Mark Sears started his career as a software developer for Sun Microsystem. The company had
some backgrounds in software outsourcing as it had a link with the company named “Sprout
Technology” in 2008. While he was visiting Nepal, he saw a lot of potential latent talents but
there was no opportunity for the talents to be flourished. Initially the Sprout technology had hired
a few developers whose main purpose was to build website for clients. After upcoming years, the
scope of the Sprout technology expanded to develop into a platform of technology that could
bring high amount of data processing job opportunities to Nepal from all over the world through
the medium of internet. In 2010, the company was created with the name “icanarmy” which was
later converted into the name as “CloudFactory” with the aim to provide a platform for the young
as well as talented individuals to learn, earn and develop their talent to new heights to emerge as
worthy leaders. He visioned a path to connect thousands of workers in Nepal to provide online
basic work that would help the workers to establish in the marketplace and which will also
enable the country to bring in the capital to the economy. CloudFactory provide the link between
people and technology. All the projects received by the CloudFactory are related to the data
labeling which helps the artificial intelligence companies situated in various parts of the world to
feed huge amounts of data. The company provides data labeling of the images which are fed to
the artificial intelligence software of the clients. This data labeling helps the artificial intelligence
software to figure out the objects given in front of them accurately.
The CloudFactory has its own set of values. CloudFactory believes that leadership is a mixture of
character and competency. CloudFactory has an aim to raise each individual cloud worker as a
leader in the community. In weekly meetings, all the employees spend their time learning,
applying and discussing one of the character principle which is chosen carefully to bring out the
best in the abilities of the cloud worker. The workers will also gain critical skill sets to be
successful in the era where digital has taken over. The CloudFactory ensures that the employees
learn a variety of skills by assigning the workers with variety of tasks which will help the worker
with strong backbone for being successful in the global economy. CloudFactory also has a core
part in community service. As the workers are provisioned in becoming leaders in the
community, the workers are encouraged to take challenges to serve the community every month.
The workers can do community service and this will also help the workers to build a strong team
with a purpose. By doing community services, the worker will be provided with important in
hand experience with the leadership skills and also make the work at CloudFactory purposeful.

1.1 Scope of the study

The scope of this proposal is to learn about leadership strategies and human resource
management strategies along with the critical analysis of the theories related to leadership and
human resource management respectively which can be related to the working environment of
the CloudFactory.

1.2 Purpose of the study

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This study investigates:

 How the company manages organizational goals.
 The type of leadership strategy implied in the organization.
 Proper management of the workers- training, retention, team integration.
 Workforce empowerment for the workers.
 How the workers are motivated
 Type of leadership the company applies

1.3 Sources and methods

The details about the CloudFactory in the area of human resource management and leadership
was found with the help of an interview from my colleague who is currently employed with the
CloudFactory. A number of questions were prepared beforehand to be questioned which are
listed in the appendix. The meeting was conducted with the help of Zoom.

2. Findings-
The finding will be based on two categories of critical analysis- Human Resource Management
strategy and Leadership strategy.

Human Resource Management Strategy-

 Motivation-
Motivation refers to the satisfaction of the employees to do work. According to
Hierarchy of needs (Maslow, 1943), the basic needs must be satisfied before the
higher-level needs which would highly motivate the employee. Expectation theory
(Vroom, 1964) states that employee’s hardwork is directly proportional to
performance and high performance will eventually lead to rewards which is an
important factor for motivation. CloudFactory provides the employees with good
competitive working environment, bonuses, optimal wages, basic necessities and
other facilities which motivates the employees to work at their full potential.

 Recruitment-
As the work in the CloudFactory is all about data labeling as the company is mostly
involved in data labeling for the artificial intelligent powered software, the labor force
is quite demanding. According to the negligent hiring theory stated (North, 1976), the
company should know the details and do background checks before recruiting them.
CloudFactory does a background check on the employees before hiring them. The
recruitment process has a number of tests which the employee has to pass in order to
get recruited. The company has facilities for part-time work for the students who want
to earn while studying. The students are paid according to the difficulty of the data
labeling. While hiring the new full-time employees, they must pass through a variety
of interviews and exams in order to be selected. The company specifically focuses on
the leadership trait of an individual and skills which are required for the job. All the
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works are done in the cloud online and the employees can finish their task in their
flexible time. All works are assigned via email.

 Training and Development-

Training and development are a vital part in human resource management as it helps
the employees to improve their skills which will help in improving employee’s
performance (Guest, 1997). According to AMO theory (Appelbaum et al., 2000),
human resource management works by enhancing the employee’s abilities,
motivation and opportunity which will later bring profits to the company. The newly
hired employees are subjected to training for about 1-3 months. During this time, the
new employees are given in-hand experience on the type of work they should be
doing in the future alongside with the appointed mentor. The employees are provided
with various training and study materials to improve their skills. The study material is
available to all the employees affiliated with the organization.

 Benefits and compensation-

According to the behavior reinforcement theory (Gordan, 2014), if an employee is
rewarded for an exceptional work and performance, the employee will be highly
motivated and keep giving the best of their abilities. The reward can be in the form of
bonuses, verbal praises and so on. The CloudFactory makes sure that the benefits and
compensation which are being provided to the employees are fairly relevant with
accordance to the government policy. The company makes sure that the pay grade is
similar or little higher compared to what the other organization are giving for the
same kind of jobs. The employees in the CloudFactory are paid at an hourly basis.
The hourly wages are decided on the basis of the difficulty of the work. The
employees are also paid for the overtime work.

 Retention-
According to the Human capital theory (Wuttaphan, 2017), employees are considered
to be an asset for the organization. It is really important for the company to make the
highly skilled employees motivated to work in the organization as they are the
workforce for earning profits for the organization. The employees in the
CloudFactory are subjected to promotion if the performance of an employee is highly
exceptional. The wages of an employees are increased by viewing their work
performance, quality work provided and contribution towards the company. The
employees are provided with incentives and bonuses during the festivals.

Leadership Strategy-
 Leadership style-
CloudFactory implies a combination of various leadership style- participative,
Laissez-Faire and Coaching. Anderson (1959) states that democratic leader is one
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who motivates the employee to be a part in decision making and participative

leadership is associated with highly improved morale. The democratic leader takes all
the possible ideas from the employees and chooses the best possible method of action
from the poof of ideas generated which can also be called as participative theory
(Western Governors University, 2020). While taking decision, CloudFactory makes
sure that the employees are involved in the decision-making process and are free
share their own ideas in front of the company.
Laisse-Faire leadership refers to the leaders where they let their employees make use
of their experience, creativity and resources to help them reach their goals (Western
Governor University, 2020). The employees in the CloudFactory are given the tasks
and it is up to the employee to decide the method by which they will complete the
goals of the project.
Coaching leadership refers to the leaders who want their employees to develop long-
term personal strengths (Berg and Karlsen, 2016). Relationship theory can be implied
in the coaching leadership style as the leaders often become mentors to the employees
by scheduling time to talk at regular intervals and work towards meeting their needs.
Out of the 3 leadership styles, CloudFactory has used participative leadership in the
beginning and has move on to Laissez-Faire leadership with a hint of coaching
leadership.

 Nature of Leadership-
The nature of leadership that CloudFactory emphasizes is flat organization structure
which means that there is little management level between the leaders and employees.
This structure makes sure that the employees have high involvement in the decision-
making process with minimal supervision. This structure allows clear communication
between the leaders and the employees.

 Vision-
CloudFactory has a vision to employee thousands of workers to provide online data
labeling and mold them into future leaders to serve the community. CloudFactory
main focuses on the character, competency and community service. The aim of the
CloudFactory is to develop employee’s character to turn them into future leader with
appropriate working skills which will later help to strive in the changing world.
CloudFactory uses style theory which emphasizes that good leaders are not born
successful but the leaders can be molded into a successful one via learnable behavior
of the leader.

 Delegate and empower-

CloudFactory makes sure to engage their employees by empowering them by
delegating greater responsibilities. This ensures that the employees are trusted with
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the responsibility and makes the employee feel a sense of self-worth which
encourages the employee to grow as a leader.

 Training-
The CloudFactory provides free courses to the employees in order to increase their
leadership skills. These courses are provided in their company’s website and
accessible to the company’s employees only. This will further help the employee to
take the next step in transforming into a great leader by having the proper knowledges
and strategies to function as a leader.

3. Discussion of Findings-
Human Resource Management-
 Motivation-
o Even though the Maslow’s hierarchy of need is simple to understand and takes
humans into account but all the individuals do not think in the same way. For some
people, respect is more important than safety. For example, many people prefer to
buy expensive cars rather than pay for their insurances as they get satisfaction in
showing off their new car rather than paying for the insurance.
o Vroom’s expectation theory states that hardwork relates to high performance which
leads to rewards and increases motivation but the theory assumes that all the
employees will provide their 100 % effort which is not always the case.

 Recruitment-
o The recruitments are recruited based on the knowledge and the skills written in the
curriculum vitae by the employee. The information given in the curriculum vitae
might be true to some extent but to verify the information, all the legal documents
must also be tested.
o The only mode of communication for the employees is email which is not at all
efficient if the employees don’t have a habit to look into their emails daily.

 Training and Development-

o AMO theory states that the organization can profit by enhancing ability, motivation
and opportunity to the employees. But this theory can only be successful if the
employees are loyal to the organization. If an employee excels in all the three fields
but there is no improvement in the wages, then the training given to the employee for
a purpose becomes wasted.

 Benefits and compensation-

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o Even though the rewarding system is an excellent choice for the motivation of the
employees, sometimes appreciation, praise might have a bigger value for an
employee rather than receiving rewards.
 Retention-
o It means to retain the employee by showing the benefits to the employee will receive
in the days to come if the employee stays loyal. But sometimes when an employee
performs exceptionally well, the employee is bombarded with too much of
responsibilities which results in demotivation and shifts the employee’s focus to leave
the institution.

Leadership Strategy-
 Leadership Style-
o Democratic style ensure that different ideas are shared by all the employees and the
decision is based on optimal idea for the suitable project which increases the morale
of the employee but sometimes this may lead to agreement and disagreement for a
particular idea leading to a communication gap.
o Laissez-Faire style ensures that the employees are given the full freedom to take their
own decision to follow their idea to complete a particular task but if the employee is
not capable to handle the task on their own, the chances of getting unwanted results
will drastically increase.
o Coaching leadership involves being a mentor to an employee and helps the employee
in polishing their skills but the mentor who will be mentoring must be skilled in their
leadership and sometimes mentoring is the right approach to all the employees.

 Nature of Leadership-
o Flat organization makes sure that there is little management between the employees
and the leaders and employees are involved in the decision-making process but this
structure can pose a problem if the ratio of the employee to the managers are out of
proportion which results in employee outbreak.

 Vision-
o The style theory states that good leaders are not born successful but the leader can be
modeled into a successful one via learning behaviour. But the time period for an
individual to develop into a leader may vary from person-to-person.

 Delegate and empower-

o It is acceptable to delegate power to provide motivation but the delegation should
happen in such a way that employee does not misuse or overuse the authority which
may harass other employees.
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 Training-
o It is a good method to train the employees to mold them into future leaders for the
community. This helps in improving the skills of the employees as well as they get
information about various topics of the economy.

4. Conclusion-
Based on the finding of the critical analysis in the area of human resource management strategy
and leadership strategy, we can draw the following conclusions-
1. CloudFactory provides the employees with good competitive working environment,
bonuses, optimal wages, basic necessities and other facilities which motivates the
employees to work at their full potential.
2. CloudFactory does a background check on the employees before recruiting and the
recruitment process is a lengthy in order to get selected.
3. CloudFactory provides employees with training facilities and study material in order to
improve their skills.
4. The employees are paid in the hourly basis according to the difficulty of the task.
5. Exceptional employees are subjected to promotion and the wages of the employee is
increased by reviewing the performance of the employee.
6. CloudFactory uses flat organization structure with a mixture of 3 leadership style-
participative, Laissez-Faire and Coaching styles.
7. CloudFactory believes to mold employees into future leaders who will be able to serve the
community.
8. CloudFactory improves the morale of employees by delegating the power to the employees
which helps in becoming a leader.
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SWOT Analysis-

PEST Analysis-
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5. Recommendation-
After considering the finding and conclusion, the recommendation to improve the CloudFactory
in my opinion are as follows-
1. Even though the work to be done is data labeling which is done online, the company should
make sure to organize activities together once a month which will further help the company
to observe the behaviour of the employees and will also help the team in working together
efficiently.
2. The only mode of communication with the employees is email. If an employee fails to look
into the mail, then the resulting outcome would be an unwanted one and the task cannot be
finished in the given time. The CloudFactory should figure out way to interact with the
employees by creating groups in social media where most of the employees spend their free
time.
3. The hierarchy should be defined well in order for the organization to function properly.
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List of References

Anderson, R.C. (1959) Learning in discussions: A resume of the authoritarian-democratic

studies, Harvard Education Review [Online], 29, pp. 201-212. Available from:
<https://psycnet.apa.org/record/1960-05693-001> [Accessed 26 June 2021].
Appelbaum, E., Bailey, T., Berg, P., Kalleberg, A.L. and Bailey, T.A. (2000) Manufacturing
advantage: Why high-performance work systems pay off. Cornell University Press.
Berg, M.E. and Karlsen, J.T. (2016) A study of coaching leadership style practice in projects,
Management Research Review [Online], 39(9), pp. 1122-1142. Available from:
<https://doi.org/10.1108/MRR-07-2015-0157> [Accessed 27 June 2021].
Gordan, M. and Amutan, K.I. (2014) A Review of BF Skinner’s ‘Reinforcement Theory of
Motivation. International Journal of Research in Education Methodology, 5(3), pp. 680-688.
Available from:
<https://www.researchgate.net/publication/306091479_a_review_of_b_f_skinner's_'reinforceme
nt_theory_of_motivation> [Accessed 26 June 2021].
Guest, D. E. (1997) Human resource management and performance: a review and research
agenda. International journal of human resource management [Online], 8(3), pp. 263-276.
Available from:<http://www.dx.doi.org/10.1080/095851997341630> [Accessed 26 June 2021].
Maslow, A.H. (1943) A theory of human motivation. Psychological review [Online], 50(4),
p.370. Available from: <https://doi.org/10.1037/h0054346> [Accessed 25 June 2021].

North, J.C. (1977) Responsibility of employers for the actions of their employees: The negligent
hiring theory of liability, Chicago-Kent Law Review [Online], 53(3), p.726. Available from:
<https://scholarship.kentlaw.iit.edu/cgi/viewcontent.cgi?article=2272&context=cklawreview>
[Accessed 25 June 2021].
Western Governor University (2020) Leadership theories and styles. [Online]. Available from:
<https://www.wgu.edu/blog/leadership-theories-styles2004.html> [Accessed 26 June 2021].
Wuttaphan, N. (2017) Human capital theory: The theory of human resource development,
implications and future. Rajabhat Journal of Sciences, Humanities and Social Sciences [Online],
18(2), pp. 240-23. Available from:
<https://ph01.tci-thaijo.org/index.php/psru/article/view/76477> [Accessed 26 June 2021].
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Appendix
An interview was conducted with an employee of the CloudFactory. The employee doesn’t want
her name to be mentioned in the report as the details which she has mentioned are all
confidential information. The questions which I had prepared for this report are as follow-
1. How was the company founded?
2. Why was the company named “CloudFactory”?
3. What is main motive behind establishing this company in Nepal?
4. What kind of projects are handled by CloudFactory?
5. What are the core values of the organization?
6. How are the human resource management strategies being implemented and what are the
theories being used in the strategies?
7. How are the employees motivated?
8. What is recruitment procedure in the factory?
9. What kind of trainings are provided in order for an employee to advance their skills?
10. How are the wages being calculated in the organization?
11. How are the leadership strategies being implemented and what are the theories being
used in the strategies?
12. What type of leadership style is being used?
13. What is the nature of leadership being implemented?
14. How are the employees molded into a leader?
15. Does the company provide any special training to become a successful leader?