This study examines differences between actual and preferred HRM policies and practices in domestic firms (DF) and MNC subsidiaries (MNCs) in Sri Lanka. The paper argues the existence of within-country differences in HRM practices between MNCs and DF. The analysis and findings are based on 487 responses from employees and HR executives of eight manufacturing sector companies. Results indicate that differences exist between MNCs and DF in not only actual HR practices, but also in preferred HRM practices. Within-culture diversity of both employees’ preferences for and actual HRM practices between DF and MNCs was evident. The findings contribute to cross-cultural and international HRM knowledge and practices.