Recent Linux distributions support NIS password updates through PAM, which means you can use the local passwd program instead of yppasswd. This also means that you can configure the hash algorithm, which is still (as of yp-tools 2.12) not possible with yppasswd.
Your system should have an /etc/pam.d/passwd file, which will either contain or, more likely, refer to another file that contains a line of the form:
password sufficient pam_unix.so md5 nis
The second field might differ, and there might be other parameters at the end, but you want the password line that loads pam_unix.so and it should have at least the nis parameter as well as a hash function appropriate to your NIS server (md5, sha256, etc.)
Your distribution might have a better way of configuring this, though, so make sure your changes aren't going to be overwritten by an automated process later.
On RedHat-derived systems (including at least RHEL, CentOS, Scientific Linux, and Fedora), you need to use the authconfig program with at least the --enablenis parameter. For the above scenario with MD5 hashes, the following command line would be sufficient:
authconfig --enablenis --usemd5 --update
On Debian systems (and possibly Debian derivatives, but I can't check at the moment), the proper way to do this appears to be to copy /usr/share/pam-configs/unix to something else (say, /usr/share/pam-configs/nis), edit the new file to give it appropriate settings and a new profile name, then run pam-auth-update, disable the "Unix authentication" profile and enable your new profile.