How guanxi HRM practice relates to emotional exhaustion and job performance: the moderating role of individual pay for performance

Abstract

Employees may experience and respond to the coexistence of guanxi human resource management (HRM) practice and individual pay for performance (PFP) in transition economies within China. Based on conservation of resources theory, this study addresses the question of how guanxi HRM practice and individual PFP interact to impact employee emotional exhaustion and job performance. We hypothesized and tested the theoretical model using data collected across three phases over six months from 42 supervisors and 189 subordinates. We found that the presence of high individual PFP renders the negative effect of guanxi HRM practice even worse. Furthermore, emotional exhaustion mediates the interactive effect of guanxi HRM practice with individual PFP on employee job performance. In particular, the indirect effect is negative and significant when individual PFP is high rather than low.