Best Human Resource Management Practices in Latin America

Citation

Harry, W. (2010), "Best Human Resource Management Practices in Latin America", Personnel Review, Vol. 39 No. 3, pp. 399-402. https://doi.org/10.1108/00483481011030575

This is an interesting book, which is relevant to HRM practitioners and academics beyond Latin America. Those working within clear legislative HRM environments and within stable and secure societies will find the book stimulating and a useful source to making their own decisions when legislation and society does not provide guidance. The book also provides insights into why some Latin organisations support cooperative working (as shown in Semler (1993), although sadly not referred to within the book, although chapter 3, dealing with employment relations in Colombia, does highlight the advantages of controlled sub‐contracting in conflict situations) as a means of dealing with complexity rather than trying to control complexity as many Anglo‐Saxon organisations attempt.

The book is made up of 14 chapters in a series of themes. The first theme is case studies in organisations applying “novel” HRM strategies within difficult environmental situations – particularly MNCs which have to cope with stakeholders and activists in the home as well as the host country. The next theme used within the book is more positive in its views and considers the MNCs which have been particularly successful in managing people in Latin America. It is important to realise that some organisations outside Latin America can learn valuable lessons from these cases of successful MNCs and indigenous Latin American organisations, discussed in this book. A notable lesson is that it is not only the USA and Europe that produce very useful developments in HRM and other aspects of management. The next theme involves two case studies of integrative approaches to HRM. These are followed by studies of specific HRM practices before the chapter on Business Schools in the region (showing some of the problems facing countries which lose many of their best brains to the richer countries of the north). The Latin American business schools provide a fine demonstration of the impact on poorer countries of richer nations offering substantially higher pay to highly capable talented people whose loss contributes to the continued gap between the developed and developing parts of the world. Finally there is a chapter by the editors of the book on theoretical aspects of best HRM practices. Most, but not all, authors of the book chapters have a Latin heritage so share language and some broad cultural understanding with the HR Managers and others undertaking the people management tasks in the region. Apart from relevant language skills those from this heritage are likely to be more willing to accept that organisations in Latin America can be at least as successful in managing people as the MNCs which have a USA or Western European organisational culture. There is still a large degree of, misplaced, arrogance of westerners who think that they know all the right answers while it does seem that the Latin heritage authors have been prepared to see that the long term “right answers”, especially in wider aspects of HRM, may be found in Latin America and other developing regions rather than be found in London or New York.

The Latin American region (from Mexico in the north to the South American continent) has, as chapter 13 points out, great inequality with 10 per cent of the population surviving on less than $1 a day while 25 per cent subsist on less than $2 a day. Income inequality is greater in Latin America than any other World region so that 10 per cent of the population has 48 per cent of national income while the bottom 10 per cent shares a total of 1.76 per cent of national income. Along with the massive inequality property rights, as is shown in chapter 2, are a severe problem, which leads to disputes between the rich and poor in which MNCs and foreigners are caught. The lack of clarity in legal matters makes Stakeholder Management an important part of HRM and general management in Latin America. The organisations face problems dealing with a wide range of stakeholders. As chapter 2 shows, when discussing Stakeholder Management in Brazil, even while trying their best and exceeding the legal requirements political moods change and the rules are re‐written to the disadvantage of the most highly regarded organisations. However chapter 7 demonstrates that even in violent and uncertain environments it is possible to operate at profit and to deploy Worldclass HR Management systems and practices.

Part of the reason for world class HRM has been a move, not identified in the book but recounted to this reviewer by the Head of Ecuador's HRM Society, from ex‐military dominating people management in the 1980s to practitioners now being mainly female managers trained in social and psychological sciences. The change in background of HR managers has reduced confrontation and enabled more employee‐oriented stances to be taken. This employee orientation is identified in chapter 12, which also discusses the issues which arise in the ethical pluralism of Latin America. There are few clear directions in the region so those working in Latin America have to rapidly build knowledge of the host country expectations. Those who have been used to an equal opportunity environment which values diversity may be shocked when dealing with recruitment when social networks are of more value than formal reviews of competence – although chapter 11 considers that it is only when friendship supersedes competence. Recruiters will normally seek information from candidates on marital status, family background and number of children. The reason for asking for personal information, which USA and European HRM will normally be forbidden to explore, is that for many Latin American organisations the person appointed is more than an employee but is a “whole” person who is joining a family within the organisation. Latin, and indeed many Asian, employers are genuinely interested in their employees beyond their immediate work capabilities and consider that the Western view of equal opportunities leads to a very narrow focus within the employment relationship. While undoubtedly some unfair discrimination does result from a concern with personal and social network background of candidates there are distinct advantages, to employees as well as employers, in having staff who are compatible with the group expectations and organisational culture.

It is not just in equal opportunities that Latin countries are different from those of North America and Europe. For example chapter 9 discusses the situation of highly capable employees of Mexican Knowledge Intensive Firms (KIF) which apply Performance Management and Assessment in a culture where pay and performance are not linked. In this chapter the PMA is used to examine performance but the changes in pay are dealt with in a completely separate (and opaque) procedure. In the KIFs PMA then leads to confrontation especially regarding appraisal and outcomes. The knowledge workers feel caught between keeping external clients happy or the boss happy‐ situations surely not limited to Latin America. One solution developed in a Mexican firm has been to use PMA to identify areas employee accepts the assessment and will try to improve, areas where the employee disagrees but is willing to try and improve and areas where the employee does not agree and is not willing to change. This at least helps to reduce the conflict to the areas worth concentrating upon. However one is left with the impression that the PMA is being imposed because it is seen as an HRM best practice rather than as a system which will actually lead to better performance of the specific organisation.

Moving away from the operational aspects of HRM, chapter 4 highlights the importance of social responsibility rather than strategic HRM. Within much of Latin America social innovation is required of many organisations which then have to find ways of combining economic efficiency and social equality. This is supported by contentions in chapter 13 (on Business Schools in the region) which also point out the greater resilience of managers in the region compared with those in the more stable environments of the USA. Perhaps it is this resilience that has helped many of the organisations, reviewed in the case study chapters, to achieve national and international standards of excellence by applying global best practices through sensible contingent actions.

Along with the case studies there are several chapters aiming to provide theoretical contributions to wider HRM academia. The theoretical contribution is useful in providing alternative perspectives to the “usual global viewpoint of managing people”. Chapter 14 shows the importance in the regions of mutual dependence, shared control and high levels of cooperation among diverse stakeholders. It is in the discussions of balancing the demands of various stakeholders that HRM in Latin America shows those working in other regions how their responsibilities are likely to change in the next decade or so. HRM, in the West has often achieved a place at the Board table by demonstrating its importance to increasing shareholder value but, if our Latin colleagues are guiding us well, it is likely that HRM will become increasingly involved in demonstrating its importance in increasing stakeholder satisfaction and organisationally sustainability. As the concept of the Triple Bottom Line (measuring and being concerned with profit along with social and environmental impact) becomes more important particularly within Corporate Social Responsibility (CSR) aspects of an organisation then the examples give in this book will be seem as of great importance. The authors have given cases of MNCs and local Latin companies which successfully deal with great social and environmental problems – and make a profit. A major factor in the success of these organisations is the shared commitment to work as a group and a community rather than as competing individuals. Those Western HR managers who have corporate social responsibility as part of their responsibility will find this book a useful source of inspiration and practical advice and will help them to manage for the long term.