This paper examines performance appraisal practices as viewed by a sample of 164 Chinese from Hong Kong and the People's Republic of China (PRC). There was a higher tendency for the PRC Chinese to prefer a group orientation to performance appraisal. The PRC sample also expressed a much greater willingness to consider non-performance-related factors and a strongerpreference for open, honest, and direct relations between supervisors and subordinates. In terms of performance attributions, there was no difference in the degree to which the two groups noted internal attributions of behaviour, but the PRC group espoused external attributions of performance. The Hong Kong group expressed less trust and confidence in subordinates' ability to accomplish task and more likely to indicate that supervisors should know the precise answer to work-related questions. The Hong Kong group also preferred less frequent performance appraisals.Performance appraisal is the systematic evaluation of employees with respect to their performance on the job and their potential for development. According to Western theory, performance appraisal may.be one of the most valuable tools in managing human resources and productivity. When used effectively, appraisal systems can provide useful information for identifying individuals with high potential for development and/or promotion as well as providing ground for rewarding performance. crucial elements of an effective appraisal system include valid measuring criteria and instruments, good relationship between supervisor and subordinate, with mutual trust and respect, frequent and open communications, clearly set performance standards, and feedback. Such an appraisal system may be explicitly biased toward the Western culture which is characterized as aggressive and individualistic. Wether these Western appraisal systems can be validly and reliably used to assess human performance in non-Western cultural environment remains to be investigated. It would seem that appraisal systems cannot be simply borrowed from other organizations or other cultures and installed in any organization-appraisal systems introduced in an organization must reflect its culture and its way of doing things.Employees' attitudes towards these aspects of performance appraisal system have significant impact on the appraisal process and outcomes. Research studies revealed that open, two-way communication, mutual trust, opportunities for ratees to parti-