This study examined the influence of political forces and imitation processes on HR practices in local and foreign firms in Singapore and Hong Kong. Hong Kong has long practised a policy of positive non-interventionism while Singapore's government has taken a far more interventionist role not only on broad issues of economic policy but on HRM activities as well. Singapore's government has focused heavily on productivity improvement, including the development of incentive pay systems and more effective performance appraisal systems. Singapore firms use more extensive personnel selection procedures and more sophisticated methods of assessing employee performance and determining wage rates. On the other hand, the Hong Kong government has centred its policies around training and development activities. Higher levels of in-house training and formal orientation programs were found in Hong Kong firms. That HR practices seem to reflect the different government approaches is particularly so for locally owned firms.