Performance appraisal in Australia and China: an analysis of best practices

Cross-national comparative studies of Human Resource Management (HRM) practices have become increasingly prevalent because of factors such as the globalization of business, the increasing awareness of the impact of economic and cultural changes upon HRM, and the transferability of HRM practices from multinational corporations (MNCs) to their subsidiaries. In order to compete within the global economy, many organisations have begun to search for best international HRM practices by exploring the relationships between specific practices and various measures of organisational effectiveness in different countries (Von Glinow, 1993). Similarly, much of the literature in this field argues that it is critical for MNCs to understand how host countries utilise their human resources and to match their HR systems accordingly (Adler, 1991; Schuler, Dowling, & De Cieri, 1993; Moore & Jennings, 1995). Recognising this need, a Best Practice Study has been established utilising researchers from different countries to participate in a research project aimed at determining 'best international HRM practices' in domestic and globally oriented firms" (Von Glinow, 1993). The wording "best", as Milliman etal. (1994) explain, is adopted in a cultural and organisational specific sense rather than implying universalism. The authors of this paper have joined this international research program, undertaking research related to a wide range of HRM practices in both Australia and China. This paper discusses the HRM practice of performance appraisal (PA), a contentious and much-debated function in HRM in both Australia and China. The paper first examines the PA literature in Advanced Western Market Economies (AWMEs) specifically Australia, identifying the issues surrounding PA with a focus on its purposes and effectiveness. The research then highlights PA in the People's Republic of China under changing economic systems (moving from a centrally-planned economy to a market-driven economy). The focus of this paper is to diagnose to what extent PA is currently utilised to serve certain purposes and to identify the discrepancy between the current position and the ideal at both domestic and cross-national levels.