Culture and performance appraisal in multinational enterprises: Implementing French headquarters' practices inMiddle East and North Africasubsidiaries

Abstract

Performance appraisal requires interactions between managers and employees and as such can be highly sensitive to differences in cultural values. This can be challenging when multinational enterprises (MNEs) are active across different institutional contexts, particularly when operating in the culturally complex Middle East and North Africa (MENA) region. In this qualitative study, we apply institutional theory to explore how performance appraisal practices are implemented and internalized in MNE subsidiaries in the MENA region through manager-employee interactions. A total of 117 interviews were conducted with different headquarter and subsidiary stakeholders (managers and employees) of four French MNEs operating in Lebanon and Tunisia. The findings indicate that, during implementation, performance appraisal criteria, evaluation, and feedback were adapted based on socio-cultural values to achieve internalization. Such values include the emotional relationship between managers and employees, the fear of losing face, high power distance, the desire to avoid confrontation, and high-context communication. Insights for future research are presented regarding the viability of MNEs operating in the MENA region implementing corporate performance appraisal practices. K E Y W O R D Shost country, human resource management in multinational enterprises, institutional theory, Middle East and North Africa, national culture, performance appraisal | INTRODUCTIONPerformance appraisal involves interactions between managers and employees, which include multiple touchpoints through the setting of performance criteria, the use of different sources to evaluate performance, and the giving and receiving of feedback (Peretz & Fried, 2012). As such, the relationship between the two parties involved can influence the process' outcomes (Pichler, 2012;Ratkovi c & Orli c, 2015). As performance appraisal is known to be highly sensitive to institutional and cultural differences (Myloni, Harzing, & Mirza, 2004), the manager-employee relationship is further complicated when the fundamental cultural values of the individuals vary (Varma, Budhwar, & Singh, 2015). Multinational enterprises (MNEs) largely operate with performance appraisal practices designed initially by members of one societal culture (e.g., at corporate headquarters) to manage employees in that same culture (Schneider, 1988), but these practices are then rolled out across other cultures. A better understanding of how socio-cultural values affect the implementation of performance appraisal practices in MNEs when operating across diverse contexts can thus contribute both to improved human resource management (HRM) practice in MNEs and a theoretical extension of the HRM practice internalization literature. Performance appraisal is arguably the most national culturebound HRM practice (Namazie & Venegas, 2016), acting as a tool to ensure consistency in information between MNE headquarters and subsidiaries (Schlegel & Britzelmaier, 2011), to sustain control (Claus,

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