This chapter explores how contextual and organizational factors influence overall human resource management in Mexican organizations and by extension their performance appraisal (PA) systems. It examines PA processes and management in Mexico. The chapter discusses the assumptions underlying how companies and individuals approach PA and identifies the challenges to improving the design and implementation of PA systems. Mexico started to open its economy in 1986 and macroeconomic conditions are seen as positive because of the prevailing stability since 1995. International Monetary Fund research suggests that Mexico's implementation of economic and political policies limits its success. Existing cultural studies of management have limited application in Mexico because they typically assume that culture is stable, has precise boundaries and can be explained using universal dimensions. Research shows that organizations use PA systems in Mexico as a forum for employee expression rather than for compensation adjustment.