Performance appraisal requires interactions between managers and employees and as such can be highly sensitive to differences in cultural values. This can be challenging when multinational enterprises (MNEs) are active across different institutional contexts, particularly when operating in the culturally complex Middle East and North Africa (MENA) region. In this qualitative study, we apply institutional theory to explore how performance appraisal practices are implemented and internalized in MNE subsidiaries in the MENA region through manager–employee interactions. A total of 117 interviews were conducted with different headquarter and subsidiary stakeholders (managers and employees) of four French MNEs operating in Lebanon and Tunisia. The findings indicate that, during implementation, performance appraisal criteria, evaluation, and feedback were adapted based on socio-cultural values to achieve internalization. Such values include the emotional relationship between managers and employees, the fear of losing face, high power distance, the desire to avoid confrontation, and high-context communication. Insights for future research are presented regarding the viability of MNEs operating in the MENA region implementing corporate performance appraisal practices.