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We explore how subsidiaries in a high-trust (Germany) and low-trust (France) country adopt the performance appraisal (PA) system from their US-headquarter. In-depth interviews with 30 informants illustrate trickle-down effects of trust from the national level to the organizational and individual levels shaping processes, outputs, and interactions of PA. While German informants expressed trust in the overall PA practice of the US-headquarter, French informants reacted with mistrust to PA manifested in different processes, rater and ratee attitudes, outcomes of PA, as well as the role of HR. We add to the comparative HRM literature by untangling, within an MNE context, the interaction of societal, organizational, and individual trust with the overall PA to provide a more holistic explanation for cross-national variations in PA beyond the mere assignment to separate cultural categories.

What do we have faith in? – a comparative study on trust and performance appraisal practices in French and German MNE-subsidiaries