A comparison of the performance appraisal practices of US multinational subsidiaries with parent company and local Taiwanese practices

Abstract

PurposeThe purpose of this paper is to compare the performance appraisal practices of US subsidiaries in Taiwan to those of their parent firms and to those of large Taiwanese companies in an effort to understand how foreign subsidiaries adjust to the competing demands for global integration and local responsiveness.Design/methodology/approachA stratified random sampling scheme was employed to ensure that performance appraisal practices of manufacturing firms in similar industry sectors were compared. A mail survey was chosen over other ways of gathering data because of the wide geographical dispersion of companies, the required speed of data collection, and the length of the questionnaire.FindingsThe results indicate that performance appraisal is not a uniform function, but consists of practices that differ in their relative resemblance to local practices and to parent practices. This finding suggests that the competing demands for global integration and local adaptation should not be viewed as opposite ends of a continuum, but as two independent dimensions.Research limitations/implicationsSelection bias, the difficulty in numerically quantifying HR practices, and survey bias by respondents are discussed.Originality/valueThis paper introduces the concept of categorizing performance appraisal practices via the use of the Integration and Adaption Matrix.