Lima, Peru

Citation

Kelly, D.J. (2007), "Lima, Peru", Employee Relations, Vol. 29 No. 3. https://doi.org/10.1108/er.2007.01929caa.001

Lima, Peru

The assistant editor represented Employee Relations: The International Journal at the 14th World Congress of the International Industrial Relations Association held in University of Lima, Peru from 11 to 15 September 2006. Peru is the first developing country to host the world conference outside the developed world. Lima is a city of 8 million people in a population of 25 million. It is an urban sprawl without metro or urban motorways resulting in traffic chaos. Peru has an economic growth rate of around 4 per cent per annum but an over abundant supply of labour. As a consequence, wages appear to be low with many people employed in service sector occupations such as security and as cleaners. Every department store, hotel, restaurant, supermarket and bank had outside one or two security men, some packing side arms. I last saw a shoe shine man in Glasgow in the early 1950s; Lima appeared to have one on every street corner. The country has a growing prosperous middle class; however poverty is widespread with merchants selling their wares, cleaning car windows etc, at traffic lights as the vehicles stop. There is no public education or health service in Peru. A large population movement from the countryside into the city increases the labour supply, adding to unemployment and to the downward pressure on wages. Additionally, it causes great distress as the city fathers cannot cope with the provision of facilities, therefore shanty towns spread up the surrounding hills with resulting hygiene problems. Notwithstanding the Universidad de Lima was a modern campus with spacious buildings, parkland, trees and flowers – a pleasant working environment.

The main theme of Congress concerned social actors, work organisation and new technologies in the twenty-first century. To an extent the forces identified were not so different from those discussed at the 12th IRRA held in Tokyo, Japan in 2000 where it was accepted that the liberalisation of trade and deregulation of financial markets has allowed capital to move around the world more freely with consequences for national industrial relations systems. The opening keynote address was delivered by Kochan who presented a comprehensive review of the changing international people management scene. My own interests related to the papers contained in track 2 dealing mainly with Human Resource Management and the New Labour Relations. Wailes gave the rapporteur’s report identifying four sub themes, namely HRM and the New Labour Relations in the Global Economy, New Work and New Workers, Voice and Representation and Challenges and Consequences for HRM. One side of the argument espousing the view that globalisation is causing a “race to the bottom” in labour standards and a convergence of employment relations practices around the world. The opposing view argues that local people management institutions and cultures in different countries lead to a degree of diversity in an era of globalisation. The papers in this track offered both support for and against both these arguments, although it has to be said that a concentration on HRM at enterprise level is likely to give greater weight to diversity.

Globalisation and multinational companies (MNCs)

Cooke et al’s paper raised the question, how can US manufacturers, in unionised companies, achieve sufficient added value to offset high labour costs in the global economy? The solution is for employers’ to combine high performance work systems and advanced technology integrated with the development of knowledge-based capacities and high trust relationships between the parties’ to change attitudes and behaviour.

The paper by Quantillia et al. highlighted the superficiality of the drive to uniformity explanation via the mechanism of the MNC. On the surface US companies operating in Spain had been successful in imposing standard HR policies on their Spanish subsidiaries. However, this paper’s analysis showed that US companies had strong centralised business structures (used short-term financial targets with integrated and standardised corporate policies) combined with the willingness of Spanish managers to legitimise American management practices brought about this outcome. The researchers’ analysis is consistent with the view that MNCs from different countries will pursue different management practices in host countries. This suggests that the internal power dynamics between corporate headquarters and subsidiary managements in local plants shapes the HR process and its outcomes.

New work and new workers

Two papers offering a counter to the argument that globalisation and MNCs are not facilitating the standardisation of HRM across the globe are presented by Ruyter and Warnecke and secondly by Karlsen and Nyboe. Ruyter and Warnecke examine the status of atypical, non-standard, employment of women in both the USA and Indonesia where, although quite different countries, both employ a large percentage of women in precarious employment. They argue that both countries are characterised by a neo liberal approach to development including decline in trade union membership and reduced welfare protection to attract direct foreign investment. Increased international competition has served to reduce costs and to increase atypical work thereby entrenching existing inequalities in female employment. Karlsen and Nyboe challenge the view that existing industrial relations institutions will sustain diversity locally against the pressures of MNCs. In Norway voluntary redundancy employment packages were contrary to important values and norms in Norwegian industrial relations established in the 1930s. However, with the discovery of oil and the operation of MNCs in Norway such agreements have spread across the economy. The authors suggest the need for a more sophisticated analysis of the interaction between established industrial relations institutions and the parties’ interests in shaping labour market outcomes.

Employee voice and representation

A central plank regarding voice debates is the argument that unions need to shift strategy from a servicing to an organising one. Surprisingly the paper by Charlwood and Haynes, unlike in Britain, finds little evidence that the fall in trade union membership in New Zealand is down to changes in the structure of the economy and to the attitudes of employees to trade unions. Their research gives weight to the changes in legislation and to negative employers’ attitudes regarding union recognition. Since the 1960s in the UK these latter two factors have always been regarded as important, but it is difficult to accept that union organisational problems are not also tied in with the changing economy. The paper by Stuart and Martinez Lucio regarding the UK’s advisory, conciliation and arbitration service (ACAS) argues that in an era of privatisation, deregulation and the international market economy state agencies have promoted these aims even in the public sector. ACAS originally set up to help improve industrial relations procedures and solve labour disputes, today plays a more active role in promoting cooperation between the parties’, particularly regarding partnership agreements. The authors demonstrate how this has worked out in NHS trusts in England. The new ACAS role is to steer and sponsor good practice acting more as a consultant.

Challenges and consequences for HRM

Zagelmeyer and Smith provide a detailed empirical examination of the relationship between operating hours, working hours and organisational size in six European countries. Despite differences between countries they report a close relationship between operating hours and organisation size, reporting that as size increases organisations are better able to make use of sophisticated working practices. They conclude that small-medium-size enterprises, noted for labour market flexibility, may be faced with resource constraints limiting their ability to respond to eternal market conditions. Van Wyk presented a topical paper on HIV/AIDS in South Africa where 4 million or 15 per cent of the adult population suffer from the disease. His aim was to discover the extent of company policies and to establish the perceptions of HR managers regarding their responsibilities to help solve the problem. The research established that many companies do have policies on HIV/AIDs but that HR managers considered the disease to have limited impact on company operations and did not regard management of the problem as central to their job. However HR involvement is likely to increase, for as the problem increases the disease is likely to have an increasing impact on productivity and attendance indices etc. This is likely to enhance the role of HR managers.

A last farewell

I take this opportunity to say goodbye to the Journal and its readers as I leave the office of Assistant Editor at the age of 70. I have been a member of the editorial team since taking the Journal to the University of Strathclyde, producing our first issue volume 22 Nos 1/2 in early 2000. Since that time the team, under the leadership of John Gennard, I believe has raised its profile by making it more international and innovative with the introduction of a specialist PhD or young researcher paper in each issue. I offer my best wishes for the Journal’s future success to all concerned both here in Glasgow and to the publishing staff in Bradford.

Dr James KellyAssistant Editor