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Purpose - The aim of this paper is to use psychological contracts theory to explore performance management practices in Mexico paying particular attention to the impact of national culture, social and structural factors. Design/methodology/approach - The paper examines the content of psychological contracts from the viewpoint of both parties in the employment relationship managers and employees in the context of performance appraisals. It conducted focus groups and interviews at these two organizational levels in three different organizations. Findings - Findings are organized around three themes: performance appraisal systems, the promises (fulfilled and unfulfilled) and the sources of terms and conditions as the content of psychological contracts for managing and participating in performance evaluation systems. For each theme the paper presents and contrasts the viewpoints of managers and employees. Practical implications - Because of the sensitive cultural nature of performance appraisals, the findings help managers implement this process by explaining the underlying psychological contracts in Mexico. Specifically, employees experience the socio-emofional behaviors that accompany performance evaluation and engage in the process at different levels of commitment. Both managers and employees respond according to their needs and what they perceive to be the company's reward. Originality/value - Performance appraisal has received little attention from studies of psychological contracts, though it is a key practice in which work promises and rewards related to performance are made. In this study, the paper brings these two research streams together and apply it to a culturally unique setting. [ABSTRACT FROM AUTHOR]