This article describes how the politics of human resources have changed in Peru, and how this change played an important role in the reforms that occurred throughout the 1990s. Throughout the article, we examine how the size and the type of organization influence the generation of human resource management. For example, some medium-sized businesses have successfully integrated their human resource management with its central competencies, experiencing positive economic and financial business results. Other companies chose to circumvent human resource management issues by outsourcing or using contract workers, relegating the role of human resources to a peripheral role. Transnational organizations bring many methods and selection processes, promotions, evaluations, training and salary determination. The article ends with a comparative analysis between the formal and informal sector of the national economy with respect to human resources practices. © 2005 Taylor & Francis.