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Human Resource Management Practices in Mexico

Human Resource Management Practices in Mexico. Pramila Rao, Ph.D 2011. Module Units and Learning Exercises. This learning module is divided into five units: 1. Background information and federal laws. Presentation from students. Quiz 1. 2. Mexican HRM practices.

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Human Resource Management Practices in Mexico

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  1. Human Resource Management Practices in Mexico Pramila Rao, Ph.D 2011

  2. Module Units and Learning Exercises This learning module is divided into five units: 1. Background information and federal laws. • Presentation from students. • Quiz 1. 2. Mexican HRM practices. • HR practices in Mexico. • Article discussion: Submit two-page handout with class discussion. ©SHRM 2011

  3. Module Units and Learning Exercises 3. Culture and HR practices. • National cultural profile: Definitions of cultural dimensions and scores from the GLOBE study. • Implications of national culture for HR management. 4. Share and learn: Bio-data exercise (connecting national cultural dimensions). • Socrates seminar (emphasizing HRM practices and national cultures). 5. Final quiz and immigration patterns. ©SHRM 2011

  4. Presentation Outline • Welcome to Mexico. • Quick facts. • History and societal background. • Business facts. • 2008 best Mexican companies to work for. • Federal laws. • HR practices. • Staffing. • Training. • Performance appraisal. • Compensation and benefits. • National cultural profile (GLOBE study). • Class exercises. ©SHRM 2011

  5. Unit 1 • Quick facts, history, business facts and federal laws. • Assign presentation exercise to students for next session. • Quiz on slides presented this session. ©SHRM 2011

  6. Quick Facts • Population:106 million. • Colors of the flag have symbolic meaning. • 31 states and a federal district. • Official language is Spanish. • Federal democratic republic. • President elected every 6 years. ©SHRM 2011

  7. Quick Facts • Major cities: Mexico City (25 million), Guadalajara (8.5 million); Monterrey (5 million). • Religion: Roman Catholic (76.5%); Protestant (6%); Pentecostal (1%), Jehovah’s Witnesses (1%). Four percent indicate " other," 14% are "unspecified" and 3% are "none". • Main industries: • Industrial: automobiles, petrochemicals, food and beverages. • Service: tourism, banking, telecommunications. • Agricultural: corn, potatoes, sugarcane, tropical fruits, vegetables. ©SHRM 2011

  8. History of Mexico • Early history was dominated by Toltecs, Mayans and the Aztecs. • Spain invaded Mexico in 1519 and ruled for nearly 300 years. • Mexico received its independence from Spain in 1821. • Miguel Hidalgo is considered the Father of Mexico because he fought for Mexican independence from Spain. • After independence, Mexico was ruled by a single political party, Partido Revolucionario Institucional (PRI), for nearly 70 years. • In 2000, the PRI was replaced by the current ruling political party, Partido Acción Nacional (PAN). ©SHRM 2011

  9. Business Facts Mexico opens its doors to foreign multinationals • 1965: Maquiladoras, assembly plants on the U.S.-Mexican border, set the stage for international presence. • 1992: The North American Free Trade Agreement (NAFTA) encourages trade between the U.S., Canada and Mexico. • 2008: Mexican information technology (IT) is awarded the best outsourcing destination for U.S. IT companies. • 2009: Mexico is the 15th largest exporter economy in the world. ©SHRM 2011

  10. Federal Laws • Federal labor law (Ley Federal de Trabajo) passed in 1931. It provides detailed employment guidance on: • Minimum wages. • Working hours per day. • Vacations. • Employee profit sharing. • Christmas bonus (aguinaldo). • Social security, housing program, retirement. • Equal pay for men and women. • Collective bargaining regulations. ©SHRM 2011

  11. : Comparison of the U.S. and Mexico ©SHRM 2011

  12. Seven Mandated Public Holidays in 2009 Jan. 1: New Year's Day Feb. 4: Constitution Day March 16: Birthday of Benito Juárez May 1: Labor Day Sept. 16: Independence Day Nov. 20: Anniversary of the 1910 Mexican Revolution Dec. 25: Christmas Day ©SHRM 2011

  13. 2008 Best Companies to Work for in Mexico* ©SHRM 2011

  14. Presentation Exercise • Divide students into groups based on class size. • Assign each group one of the best companies identified from the previous slide. • As a take-home assignment, each group will research two outstanding HR practices from its assigned company using the Internet and academic or practitioner journals. • Groups will have 10 minutes in the next class to present their outstanding HR practices. ©SHRM 2011

  15. Quiz 1 • There will be a quiz based on slides 6-12. ©SHRM 2011

  16. Unit 2 Unit 2 covers: • HRM practices in Mexico. • Article discussion and submission of a two-page handout with class discussion. ©SHRM 2011

  17. Staffing Practices • Bio-data seeks extensive personal and professional information. • Personal referrals. • Succession planning (for middle and upper-level management). • Psychometric tests. • Employment fairs. ©SHRM 2011

  18. Staffing Practices: E-recruitment • E-recruitment is generally considered isolating and unfriendly in the Mexican work culture. Mexican HR directors have expressed feelings of alienation and power loss with e-recruitment process. • In contrast, in the U.S., e-recruitment is the most widely used recruiting approach. • Monster.com pioneered the concept of e-recruitment in 1994. About 804 of the Fortune 1,000 companies in the U.S. use Monster.com as one of their recruitment portals. ©SHRM 2011

  19. Training Practices • Employees generally receive two weeks of training per year. Training is mandated by the federal law, and there are fines for non-compliance. • Several kinds of training are offered: • Total quality management training (Japanese methods of kanban, kaizen, zero defects). • Technical training. • Management training. • Corporate virtual universities exist to promote continuous learning and education. • A model example is the Mexican retailer Liverpool. Liverpool offers 22 educational programs through its virtual university and won the SHRM competitive workforce award in 2007. ©SHRM 2011

  20. Performance Appraisals • Ranking employee performance: • 360-degrees feedback. • Management by objectives. • Business unit competencies. • Collectivist and power-distance cultural dimensions make an objective appraisal process quite difficult. • The feedback interview is considered an important information exchange process. • Employment-at will does not exist; Mexican labor law identifies “justified causes” for dismissal. ©SHRM 2011

  21. Compensation and Benefits Mandatory benefits for employees at all levels: • Christmas bonus of 15 days’ base pay. • 10% of the company’s profits. • After a year of work, six days paid vacation. Mid- to large-size companies usually offer the following benefits for middle-management employees: • Health care. • Tuition for children’s private schools. • Food coupons. • Mortgage credit. • Employer-sponsored saving fund. Large companies offer the following perks to their executives: • Company car. • Gym membership. • Club memberships. ©SHRM 2011

  22. Compensation and Benefits Several practices suggest that Mexican workplaces are family-friendly: • Organizations have a “family day” where families visits employees at work. • Families are invited to employees’ orientation programs. • Organizations host annual picnics with employees’ families. • Organizations host Christmas parties with employees’ families. ©SHRM 2011

  23. Compensation and Benefits • Retirement age in Mexico can be 65, 60 (considered “voluntary retirement”) or even younger than 60 if the employee has enough contributions for a pension. • Women receive 12 weeks paid maternity leave. • Two 30-minute daily breaks are given for nursing mothers after they return to work. ©SHRM 2011

  24. Article Discussion Read the following article: • Dickerson, M., & Mandell, M (2006). In Mexico, young and thin are often job requirements. Los Angeles Times. Available at http://www.jobbankusa.com/News/Jobs/mexico_job_requirements.html. Discussion question: Share and learn • You are the HR director of a major automobile manufacturer that just started operations in Monterrey, Mexico. You need to staff the organization and are looking for administrative and production workers to get operations rolling. You are planning to start recruiting. What would you do as the local HR director? • Would you adopt local hiring practices? Please justify your rationale. • Would you adopt U.S. hiring standards? Please justify your rationale. • In your opinion, which staffing method will help multinationals get the best talent: local hiring methods or global hiring methods? ©SHRM 2011

  25. Unit 3 • National Cultural Profile: Definitions of cultural dimensions and scores from the GLOBE study. • Implications of national culture for HRM. ©SHRM 2011

  26. National Cultural Profile (GLOBE STUDY) • Power distance: The degree to which organizations and societies view power between superiors and subordinates. • Mexico: 5.22 (Rank 30) • Morocco: 5.80 (Highest score) • Institutional collectivism: The degree to which organizational and institutional practices encourage collective action. • Mexico: 4.06 (Rank 38) • Sweden: 5.22 (Highest score) Source: Chhokar, J., Brodbeck, F., & House, R (Eds) (2007). Culture and leadership across the world. The GLOBE book of in-depth studies of 25 societies. Lawrence Erlbaum Associates. Mahwah, New Jersey. ©SHRM 2011

  27. National Cultural Profile (GLOBE STUDY) • In-group collectivism: The degree to which individuals in societies reflect collectivist behavior. • Mexico: 5.71 (Rank 12) • Philippines: 6.36 (Highest score) • Uncertainty avoidance: The degree to which organizations and societies avoid uncertainty by relying on practices and procedures. • Mexico: 4.18 (Rank 26) • Switzerland: 5.37 (Highest score) ©SHRM 2011

  28. National Cultural Profile (GLOBE STUDY) • Performance orientation: The degree to which upper management in organizations and leaders in societies reward group members for performance excellence. • Mexico: 4.10 (Rank 32) • Switzerland: 4.94 (Highest score) • Assertiveness: The degree to which individuals in organizations or societies are assertive in social relationships. • Mexico: 4.45 (Rank 16) • Albania: 5.80 (Highest score) • Gender egalitarianism: The degree to which organizations or society promotes gender equality. • Mexico: 3.64 (Rank 16) • Hungary: 4.08 (highest score) ©SHRM 2011

  29. National Cultural Profile (GLOBE STUDY) • Future orientation: The degree to which individuals in organizations or societies plan for the future. • Mexico: 3.87 (Rank 26) • Singapore: 5.07 (Highest score) • Humane orientation: The degree to which individuals in organizations or societies reward individuals for positive behavior. • Mexico: 3.98 (Rank 34) • Zambia: 5.23 (Highest score) ©SHRM 2011

  30. National Culture and HRM practices • Scholars have found a strong connection between cultural dimensions and HRM practices. • High power distance cultures create a(n): • Hierarchical organizational structure. • Loyal and committed subordinate workforce. • Autocratic relationship between managers and subordinates. • What kind of HRM practices would low power-distance cultures adopt? • What staffing practices would high power-distance cultures encourage? ©SHRM 2011

  31. National Culture and HRM practices High institutional collectivism cultures value: • Group harmony and cooperation. • Conformity to societal norms. High in-group collectivism cultures feel a: • Close bond with their organization family, friends and relatives. • What kind of HRM practices would low institutional collectivism cultures adopt? • What staffing practices would high in-group collectivism cultures encourage? ©SHRM 2011

  32. National Culture and HRM practices High uncertainty avoidance cultures create: • Formalized procedures to minimize unpredictability. • Clearly defined roles for employees. • Focus on security and trust. • What kind of management practices would low uncertainty-avoidance cultures create? • What staffing practices would high uncertainty-avoidance cultures encourage? ©SHRM 2011

  33. Unit 4: Share and Learn • Bio-data exercise (connecting national cultural dimensions). • Socrates seminar (emphasizing HRM practices and national cultures). ©SHRM 2011

  34. Unit 4: Share and Learn Exercise: Mexican Bio-data Identify the various categories of the Mexican bio-data. Discussion questions: • What national cultural dimensions do you think shape such an elaborate information-seeking process? • What categories of the bio-data would you consider personally invasive? Please justify. ©SHRM 2011

  35. Socrates Seminar: In-Class Learning Exercise Read the following articles: • Gannon, M. (2004). The Mexican Fiesta. Understanding Global Cultures. London: Sage Publications, 321-334. • Friedman, T. (2005). The Virgin of Guadalupe. The World is Flat. A Brief History of the Twenty-first century. New York: Farrar, Straus and Giroux, 309-336. Encourage a Socrates seminar where students ask “why,” “what for” and “so what” questions to understand how national cultures dictate management practices. ©SHRM 2011

  36. Unit 5: Quiz 2 • There will be a quiz on slides 17- 32. • Other HRM issues: Mexican Immigrants in the U.S. ©SHRM 2011

  37. Other HRM Issues: Immigration • There are 11.5 million Mexican immigrants residing in the U.S. (as of the 2006 Census). • This accounts for 30.7% of all U.S. immigrants and one-tenth of the Mexican population. • One of out five Mexican immigrants become U.S. citizens. • Popular U.S. destinations for Mexicans are California and Texas. • Other states experiencing an increase in Mexican immigrants include South Dakota, Louisiana, Alaska and Ohio. • 40% of Mexican immigrant men are employed in transportation, construction and extraction jobs. • 37% of Mexican immigrant women are employed in service jobs. ©SHRM 2011

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