Performance Appraisal Along Cultural Dimensions: Truth or Consequences

3 he increasing number of international companies and the cooling global economy coincide to highlight the popular topic of cultural differences and their impact on the measurement of business unit performance. Just as a “rising tide lifts all boats,” an expanding global economy helps almost every company. But as the growth fueled by economic expansion decreases, the need for reliable measures of performance becomes more apparent. In the decade since the Balanced Scorecard was first written about, its use has become widespread. This performance measurement technique depends heavily on nonfinancial measures and leading indicators that drive performance (Kaplan and Norton, 1996). Along with a growing recognition that effective measures of business unit performance must include more widely applicable strategic measures than those offered by historical financial performance is the recognition that nonfinancial measures often include behavioral metrics that are affected by culture. A sizable body of research attempts to pinpoint differences in cultural attitudes and provide guidance on how managers may avoid a cultural bias in performance measurements.