This chapter provides an overview of the human resource environment in China through a brief summary of the main characteristics of human resources management (HRM) and employment profile in China. Performance management (PM) is being promoted as a modern western HRM concept in China. The adoption of the western approach in China is further hampered by the lack of strategic orientation of many Chinese firms and the deficiency of HR skills to design and implement an effective PM system. N. Lindholm's survey of 604 Chinese managerial and professional employees from multinational corporations in China found that they were satisfied with the western-styled performance management system (PMS) adopted in their company. A number of key factors influence the PMSs in China, mainly in the design of the performance indicators and the process of conducting performance appraisal. The chapter presents the historical development of performance management and appraisal systems in China.