Algeria, like other developing countries, embarked on radical economic and political reforms in the late 1980s. These reforms were a response to the economic crisis resulting from the fall in oil and gas prices after 1986, and the consequent social unrest after 1988. Credible changes in the economy were, unfortunately, very short-lived and the whole country almost fell into chaos, resulting in destruction of property, fear, uncertainty and terrorism. This chapter is an attempt to present, as far as possible, a useful account of Algeria’s experience of socio-economic development and human resource management (HRM). The first section provides a brief overview of the socio-economic and political system of the country. In the second section the labour market and the factors that have influenced it are discussed, and in the third section the two main systems of management, the Self-Management scheme (1962-9) and the Socialist Management of Enterprises (1971-90), are analysed. In the fourth section the functions of HRM before and after the reforms are discussed by examining the policies and practices of recruitment and selection, training and development, reward and remuneration, and industrial relations, as these are the main functions of most personnel/HR departments at present. It is concluded therefore that the problems and the characteristics of managing employees in Algeria are intertwined with contradictory policies, practices and attitudes that have their origins in the cultural, historical, political and socio-economic development of the country.
Algeria is potentially one of the richest countries in North Africa because of its natural resources of arable land in the north and hydrocarbons (crude oil and natural gas) in the south. Other significant resources include iron, zinc, phosphates, uranium and mercury. However, recent figures released by the Algerian National Office of Statistics (NOS) show that industrial production has declined by about 25 per cent from that in early 1980s and that average economic growth dropped from about 4.4 per cent between 1977 and 1987 to less than 1 per cent between 1988 and 1998, although it did reach 3.5 per cent between 1998 and 1999 (NOS,