An Examination of the Transferability of Traditional Performance Appraisal Principles across Cultural Boundaries

Introduction The prospects of economic development and new business growth in countries within the Pacific Rim appear to be positive, with the focal point of global business shifting from the Atlantic to the Pacific (Adler, Doktor, and Redding, 1986). Today, the Asia-Pacific region is our largest trading partner, with more than 300 billion (U.S.) dollars a year in two-way trans-pacific trade. This trade is nearly one-third larger than that across the Atlantic. U.S. firms have invested more than 61 billion dollars in the Asia-Pacific region according to Secretary of State, James Baker (Xinhua General Overseas News Service, 11/11/91). Although Japan and Korea are the Asia-Pacific region's economic leaders, business development forecasts are also bright for other Pacific Rim countries, including Indonesia, Malaysia, and Thailand (Sitnik, 1988; Kingston, 1989; Covey, 1988; Worthy, 1989). Key to success of international firms which locate in Pacific Rim host countries will be their ability to manage, train and develop their host country national work force at all levels. The design and implementation of performance appraisal systems will be very important in accomplishing this objective. There has been little research conducted on international dimensions of performance appraisal, and, as a result, most expatriate managers have received very little training in this area. The appraisal process may be misinterpreted as a signal of distrust or even an insult in some countries (Dowling and Schuler, 1990). In fact, many Asian countries reject the principles upon which the American performance appraisal is based (Gellerman, 1967). Are the traditional performance appraisal principles effective in other countries? Most organizations have a formal set of human resource management policies, practices, and procedures that reflects their own unique corporate culture (Jain, 1990; Pascale and Athos, 1981). These policies, practices and procedures, based on managers' assumptions, beliefs, and values on how to manage their employees, may vary from organization to organization. Research has shown that managers from different national cultures also have different assumptions as to the nature of management and organization. Laurent (1986) found that nationality was the most powerful determinant of their assumptions. He concluded that deep-seated managerial assumptions are strongly shaped by national cultures rather than organizational cultures. If we accept this view, human resource practives, including the performance appraisal process, will have to be designed specifically for each national culture since the same human resource practice may have a different meaning for each culture. The objective of this study is to examine cultural differences related to predominant management style among United States, Indonesia, Malaysia, and Thailand, and to assess the universal applicability of general principles for the design and implementation of performance appraisal systems. Traditional Performance Appraisal Principles Traditional performance appraisal principles date back to the early 1900s, and were designed to support a top-down, control-oriented style of management. These principles include a set of formal appraisal procedures that enables an organization to retain control over their employees, to develop the employee as an individual as well as a team member, to involve the employee in setting goals, to reward the employee intrinsically and extrinsically, and to improve performance through frequent communication/feedback. Each of these general principles will now be reviewed in more detail. Formality of Structures and Controls The performance appraisal is a control system that is used by almost all organizations to specify the behavior that employees must perform in accordance with organizational objectives. Necessary control is achieved through a clear system of rules and procedures to direct and standardize employee behavior, resulting in predictability and accuracy of performance (Lawler, 1983). …