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.
 HR practices in Mexico.
 Article discussion: Submit two-page handout
with class discussion.
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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.
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Presentation Outline
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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.
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Unit 1
 Quick facts, history, business facts and federal
laws.
 Assign presentation exercise to students for
next session.
 Quiz on slides presented this session.
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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.
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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.
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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).
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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.
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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.
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:
Comparison of the U.S. and Mexico
U.S.
Mexico
Federal Holidays
10 (on average)
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Paid Vacation Days
15 (on average)
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Union Density
12%
20%
Aguinaldo
(Christmas Bonus)
Not applicable
Mandatory
Annual Profit
Distribution of 10%
Not applicable
Mandatory
Minimum Wages
$7.25 per hour
$4.26 per day
for the highest paid
region
Varies by state
Varies by three
distinct regions
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Seven Mandated Public Holidays in 2009
Jan. 1:
Feb. 4:
March 16:
May 1:
Sept. 16:
Nov. 20:
Dec. 25:
New Year's Day
Constitution Day
Birthday of Benito Juárez
Labor Day
Independence Day
Anniversary of the 1910 Mexican
Revolution
Christmas Day
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2008 Best Companies to Work for in Mexico*
Rank
Name of Company
Industry
1
Cemex
Construction
2
América Telecom
Telecommunications
3
Carso Global Telecom
Telecommunications
4
Femsa
Food, Drink & Tobacco
5
Grupo Carso
Conglomerates
6
Grupo Mexico
Materials
7
Grupo Financiero Banorte
Banking
8
Grupo Modelo
Food, Drink & Tobacco
9
Grupo Televisa
Media
10
Coca-Cola Femsa
Food, Drink & Tobacco
*Forbes Global 2000
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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.
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Quiz 1
• There will be a quiz based on slides 6-12.
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Unit 2
Unit 2 covers:
 HRM practices in Mexico.
 Article discussion and submission of a two-
page handout with class discussion.
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Staffing Practices
• Bio-data seeks extensive personal and
professional information.
• Personal referrals.
• Succession planning (for middle and
upper-level management).
• Psychometric tests.
• Employment fairs.
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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 erecruitment in 1994. About 804 of the Fortune
1,000 companies in the U.S. use Monster.com
as one of their recruitment portals.
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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.
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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.
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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:
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>
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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.
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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.
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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.
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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?
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Unit 3
 National Cultural Profile: Definitions of
cultural dimensions and scores from the
GLOBE study.
 Implications of national culture for HRM.
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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.
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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)
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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)
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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)
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National Culture and HRM practices
• Scholars have found a strong connection
between cultural dimensions and HRM
practices.
• High power distance cultures create a(n):

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Hierarchical organizational structure.
Loyal and committed subordinate workforce.
Autocratic relationship between managers and
subordinates.
• What kind of HRM practices would low powerdistance cultures adopt?
• What staffing practices would high powerdistance cultures encourage?
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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?
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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 uncertaintyavoidance cultures encourage?
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Unit 4: Share and Learn
• Bio-data exercise (connecting national cultural
dimensions).
• Socrates seminar (emphasizing HRM
practices and national cultures).
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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.
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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.
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Unit 5: Quiz 2
• There will be a quiz on slides 17- 32.
• Other HRM issues: Mexican Immigrants in the
U.S.
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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
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service jobs.
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