Performance appraisal and MNEs: the impact of different capitalist archetypes

Abstract This study explores variations in the incidence of performance appraisals according to setting and multinationality. Using data from Europe and adopting the lens of comparative capitalisms, we found that performance appraisal (particularly, systems linking rating to rewards) is used more in the Anglo-Saxon Liberal Market Economies (LMEs) than in the other market economies found in continental Europe. Foreign owned MNEs tended to use performance appraisal more than other organisations in our sample, which may be a reflection of country of origin pressure (with most originating in LMEs). MNEs were also more likely to make use of more comprehensive forms of performance appraisal than their domestic counterparts, including elements that went beyond review and rewards to encompass training and development and career planning. We found little to suggest a default by firms towards the LME ideal, thus indicating the continued relevance of other national institutional recipes.