Understanding Performance Management systems implementation is critical for multinationals operating in countries with contrasting cultures. For firms interested in Mexico, we share our findings on how successful companies tackle the problematic nature of performance management in practice. First, problems derive from difficulties in defining the content of what is perceived and apprised as performance. Second, problems arise because superior and subordinate face a culturally subjective situation that is difficult to manage: providing and receiving feedback about performance. Subjacent in effective performance management practices is the assumption that improving employee performance will help grow organizational performance, thus appraisal systems acquire strategic importance.
Economic development in Mexico over the last two decades has contributed to an attractive environment for business investment and growth. As one of the world’s largest economies, Mexico enjoys regional economic and political power among other Latin American countries and is home to major multinational corporations such as Cemex (cement), Cinepolis (movie provider), Nemak (autoparts), Gruma (tortilla maker) and Bimbo (bakery). Contrasting with the endemic economic instability and crises of the past, Mexico experiences a rather stable economic environment today. Nevertheless, for business to succeed in this setting, leaders need to be aware of its particular management style. This article’s objective is to describe effective performance management (PM) processes in the context of Mexico, a country that is rarely studied in the general management and human resources management (HRM) literatures.
From their foundations on traditional values around social bonds and a paternalistic leadership style, Mexican companies are making serious efforts to develop a culture of performance and competitiveness. Our studies on best HRM practices suggest that modern systems are explained and implemented under contrasting logics.1 On the one hand, we observe HRM practices that cater to employees’ silent needs and demands, and positively affect employee commitment and loyalty toward their immediate supervisor and, in turn, toward their company.2 On the other hand, we also note HRM practices aiming to improve firms’ financial results, which are not quite well understood when implemented. The latter is the case of performance management.