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Purpose

This paper develops and tests a theoretical framework to explain the effect of guanxi human resource management (HRM), a unique Chinese cultural phenomenon, on employee innovative behavior.

Design/methodology/approach

We draw from a sample of 398 employees in 81 teams and test the moderated mediation model using multi-level modeling.

Findings

The results show that guanxi HRM can be perceived by employees as being simultaneously an unethical hindrance that stifles innovative behavior and a strategic challenge that is beneficial for innovative behavior. In addition, the results show that these indirect effects are contingent upon the strength of guanxi HRM.

Originality/value

The study advances our understanding of the mechanism and boundary condition underlying the double-edged nature of guanxi HRM practices.

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