1. Introduction
In today’s knowledge-based economy, enterprises are increasingly recognizing the value of knowledge assets such as capabilities and intangible resources in gaining competitive advantages [
1]. As such, knowledge management has become an increasingly important strategy for enterprises to maintain their competitive advantages and ensure sustainable development. Despite its power, however, knowledge is often directly managed ineffectively due to its tacit nature (i.e., personal and embedded nature), which makes it difficult to document and share. Indeed, organizations have come to recognize the invaluable contributions of those employees who possess this tacit knowledge [
2], such as special knowledge, skills, and unique characteristics [
3]. To optimize knowledge management, organizations have implemented differentiated human resource management policies (HRM) that offer privileged treatment to these talented individuals, such as individualized employment arrangements known as idiosyncratic deals (i-deals). These can include higher salaries, better opportunities for advancement, higher social status, and other resources [
4]. This management policy not only fosters individual employee growth and helps them realize their career goals [
5,
6], but also encourages them to share their professional knowledge, maximizing their value to the organization. Additionally, it is an effective strategy for the organization to attract and retain talent and to ultimately secure a sustainable competitive advantage [
7].
It has been demonstrated that i-deals can motivate i-dealers to actively share knowledge, experience, and information [
8]. However, implementing i-deals involves a three-party game between the grantor (managers), the recipient (employees), and the bystander (coworkers), rather than just a binary interaction between the target employee and the manager [
9]. The success of an organization in building beneficial knowledge interactions after implementing a talent management policy depends not only on the knowledge sharing behavior of i-dealers, but also on the knowledge hiding behavior of coworkers, which can have a destructive effect on the knowledge cycle. Because i-deal policies challenge the traditional standardized treatment of HRM, they create differences in employment arrangements between employees [
10]. Coworkers may feel that the policy is unfair [
6] and be biased against others’ access to i-deals [
11], leading to a lack of understanding or support [
12]. This results in the failure of the knowledge cycle. Therefore, this study seeks to examine the dysfunctional impact of talent management policies on knowledge management from a bystander perspective, specifically the role of i-deals in coworkers’ knowledge hiding. To this end, two research questions will be addressed: First, do i-deals lead to coworkers’ knowledge hiding and, if so, what internal mechanisms are at play? Second, how does a positive leadership style attenuate the effects of i-deals on coworkers’ knowledge hiding?
To answer the first question, we describe the negative effects of i-deals based on the cognitive-affective processing system (CAPS) framework [
13] and highlight the critical role of coworkers’ cognition and emotion in the process. The framework posits that individuals not only activate different cognitive and affective units in the process of evaluating an event, but also activate affective units after the activation of cognitive units [
13]. Coworkers’ perceptions of other employees’ i-deals (CPOEID) refers to their feelings about the extent to which other employees benefit from i-deals [
14,
15]. This influences how they behave in the workplace. Through making observations and gathering information, coworkers assess the organizational status of recipients, which helps them form their own perception of their own place in the organization [
16]. Specifically, those that receive i-deals are seen to have greater status, more opportunities, and more benefits [
15]. This makes coworkers feel like they are being treated unfairly and further exacerbates their sense of an effort–reward imbalance (ERI) [
17]. Thus, ERI was chosen as the cognitive unit. Concurrently, comparing themselves to i-dealers can prompt coworkers to recognize their own disadvantages [
18], which in turn creates uncertainty about their chances of achieving similar agreements in the future and amplifies their psychological distress. Thus, psychological distress was chosen as the affective unit. In conclusion, i-dealers gain an advantage in resource allocation [
19], leaving coworkers feeling disadvantaged [
18] and perceiving their effort and reward to be inequitable [
20,
21]. When coworkers try to balance effort and reward, it can lead to unfavorable psychological and emotional responses [
22]. Coworkers may not only withhold pertinent information [
23] but, in some instances, they may even disregard requests for expertise and experience from i-dealers. As a result, we aim to integrate cognitive and affective progress and examine the serial mediation of ERI and psychological distress. This is conducted to comprehensively explore the effect of CPOEID on knowledge hiding.
In the workplace, employees acquire information from organizational systems and direct leadership [
24] and their understanding of HRM policies and leadership styles forms the basis of their cognitive, affective, and behavioral composition. Research has demonstrated that HRM practices and leadership behaviors can mutually influence each other [
25,
26]. As such, taking both leadership and institutional factors into account can provide a more comprehensive understanding of how organizational situations affect individuals [
27]. When existing HRM practices are inadequate, a proactive leadership style can mitigate the adverse effects of management policies on employee responses [
27]. To this end, we sought to explore the role of ethical leadership in weakening the potential dysfunctional consequences of i-deals to answer the second question. Differentiated HRM practices can create perceptions of unfairness among coworkers, while ethical leadership is defined by traits such as integrity, honesty, and trustworthiness [
28,
29]. An ethical leader cares about their subordinates, values their professional growth, and makes fair decisions based on ethical principles to ensure the long-term development of the organization [
30,
31]. Ethical leadership provides an unbiased endorsement for the implementation of i-deals, implying that they are a competent organizational investment in employees rather than a result of managerial bias [
15,
32]. This assists coworkers in positively perceiving others’ i-deals, effectively weakening any negative cognitive, affective, and behavioral responses.
Our study offers two primary contributions to the research field of differentiated HRM policies and their impact on coworkers’ knowledge behaviors. First, we investigate the potentially detrimental outcomes of i-deals from the bystander perspective, thereby deepening our understanding of the impact of HRM practices on knowledge interactions. We responded to Kong et al.’s call to explore the destructive results of i-deals [
12] while also testing the hypothesis that competition and performance lead to hidden motivation [
33] and furthering the antecedent roles of knowledge hiding from the perspective of organizational management policies [
34]. Furthermore, based on the CAPS framework, we expand upon the dysfunctional cognitive, affective, and behavioral consequences of i-deals and provide a new theoretical perspective for the field [
35]. Second, we provide empirical evidence for the complementarity of leadership and policy factors [
24,
27], as well as explore the impact of organizational context on employee workplace outcomes. We examine the moderating role of ethical leadership and expand the boundary conditions of i-deals. To this end, we respond to Kui et al.’s call to investigate the “black box” of interactions when the effects of HRM practices and leadership styles are not aligned [
27]. Specifically, we examine how ethical leadership can weaken the potentially destructive effects of i-deals on coworkers, demonstrating the significance of leaders’ individual behaviors in remedying the shortcomings of existing management policies.
5. Discussion
Based on the CAPS framework, this study aims to explore the underlying mechanisms and boundary conditions of the effects of CPOEID on coworker knowledge hiding. The key findings are reflected in the following six aspects:
First, we investigate the potentially detrimental outcomes of i-deals from the bystander perspective, thereby enhancing the impact of HRM practices on knowledge interactions. Knowledge management centers on managing talented employees who possess tacit knowledge [
2]. Differentiated HRM practices are effective in attracting, motivating, and retaining talented employees with valuable specialized knowledge and skills [
11,
14,
35], as well as promoting the sharing and dissemination of knowledge and experience [
8]. However, for bystanders, non-standardized management policies can lead to an impression of unfair treatment [
6,
18,
35], which could negatively affect their knowledge behavior. Our findings explore the positive relationship between CPOEID and knowledge hiding (0.143 *). In doing so, we respond to Kong et al.’s call to explore the destructive results of i-deals [
12], while testing the hypothesis that competition and performance lead to hidden motivation [
33] and furthering the antecedent roles of knowledge hiding from the perspective of organizational management policies [
34].
In addition, our study explores the positive effects of CPOEID on ERI (0.486 ***). Special treatment of talented employees in i-deals can make coworkers feel that the manager prefers talented employees and that their own resources are threatened, resulting in a perception of unfair treatment and an increase in ERI. From the perspective of effort–reward imbalance, we refine employees’ perceptions of injustice in accordance with the research on differentiated human resource management practices [
10,
48]. We also explore the mediating role of ERI (indirect effect: 0.048 *) in support of Hypothesis 1, indicating that CPOEID indirectly affects knowledge hiding through ERI. This states that ERI leads to a decrease in willingness to share knowledge and attempts to express their dissatisfaction skillfully and effectively by concealing expertise, information, and resources, which is consistent with research on “negative cognition—knowledge hiding” [
54,
78].
Correspondingly, our findings also demonstrate a positive relationship between CPOEID and psychological distress (0.289 ***). This suggests that when i-dealers are favored by the organization, their coworkers may feel unhappy or depressed as a result of their disadvantage in comparison, leading to decreased optimism about the future. This is in line with previous research that has concluded that differentiated treatment can lead to coworkers’ negative emotions, such as envy [
11,
79]. We explored the mediating role of psychological distress (indirect effect: 0.043 *) and found evidence to support Hypothesis 2, which suggests that CPOEID indirectly affects knowledge hiding through psychological distress. Psychologically distressed coworkers may engage in counterattacking or confrontational behaviors, perceive the recipient’s request for knowledge as a conspiracy to steal resources, and employ knowledge hiding strategies to prevent further resource waste. To this end, we respond to the “negative emotion–knowledge hiding” research call [
80] to further investigate the antecedents of emotional factors in knowledge hiding [
81,
82] and provide evidence to support the view that knowledge hiding is a resource preservation strategy [
58].
As noted, our findings demonstrate that differentiated HRM practices have dysfunctional effects on the cognition, affect, and behavior of non-beneficiaries, which can help to systematically understand the role of i-deals on employees [
3]. We connect individual cognitive and affective pathways and present a novel theoretical perspective for the field of i-deals using the CAPS framework [
35]. Specifically, we examine the positive relationship between ERI and psychological distress (0.257 ***) and find that ERI and psychological distress play a serial mediating role between CPOEID and knowledge hiding (indirect effect: 0.033 *). The results support Hypothesis 3, indicating that CPOEID leads to coworkers’ perception of ERI, which in turn leads to psychological distress and knowledge hiding. Our findings are consistent with research on key events [
58], further validating the explanatory mechanism of “key events–rational and sensible transformation–coping strategies”.
More importantly, we examine the moderating role of ethical leadership and expand the boundary conditions of i-deals. Previous research has focused largely on individual- level factors, such as performance similarity and coworkers’ beliefs in obtaining future i-deals [
14,
32], overlooking the influence of situational factors on employees’ work settings. Notably, the organizational implementation of i-deals is a three-way game between the grantor (manager), the recipient (employee), and the bystander (coworker) [
9]. To better understand i-deals, leadership styles may play a critical role in the two-way interactions between i-dealers and coworkers [
3]. We combine leader honesty with fair decision making behavior to examine the impact of ethical leadership on cognitive activation [
28,
29]. Specifically, ethical leaders who emphasize fairness will provide appropriate and reciprocal rewards to employees for their hard work and contributions. This makes coworkers feel that i-deals are the organization’s investment in employees’ abilities or performance, rather than the result of the managers’ personal preferences. They believe that their increased effort can lead to similar employment arrangements in the future, effectively reducing their sense of ERI. The results of this study support Hypothesis 4, which states that the interaction of ethical leadership and i-deals has a negative effect on ERI (−0.151**), thus showing that ethical leadership serves as a moderator between CPOEID and ERI.
Finally, we provide empirical support for the complementarity of leadership and policy factors, as well as explore the impact of organizational context on employee workplace outcomes. Scholars have increasingly suggested that leadership and policy factors are not independent, but rather influence each other’s roles [
25,
26]. Integrating HRM practices and leadership styles creates organizational contextual factors that comprehensively reflect individual consequences [
24,
27]. Previous research has mainly focused on the positive benefits of combining management policies and leadership behaviors [
83,
84]. We respond to Kui et al.’s call to investigate the “black box” of interactions when the effects of HRM practices and leadership styles are not aligned [
27]. We examine how ethical leadership can weaken the potentially destructive effects of i-deals on coworkers, highlighting the importance of leaders’ individual behaviors in remedying the shortcomings of existing management policies. To this end, we explore the negative effects of the interaction of ethical leadership and i-deals on the serial mediation of ERI and psychological distress (indirect effect difference between high and low levels: −0.022 *), supporting Hypothesis 5, i.e., ethical leadership not only reduces the effect of CPOEID on coworkers’ negative cognition and affection but also weakens coworkers’ tendency to hide their knowledge. However, the difference value was poor (less than 0.1), which may be due to ethical leadership being an external factor, rather than a direct internal feeling. Ethical leadership provides a fair endorsement for management policies and can influence employees’ attribution tendencies [
11,
66] and, thus, their cognitive and emotional responses, but its direct influence on cognitive and emotional responses is relatively weak. Future studies should explore the boundary conditions of individual characteristics such as attribution tendency.
5.1. Practical Implications
Our research offers practical insights for i-dealers, coworkers, managers, and organizations. I-dealers should take steps to reduce hostile feelings among bystanders and cultivate interpersonal trust and support. Bystanders comprise the majority of the organization and their attitudes can have a significant impact on the success of individual agreements [
10]. To ensure the sustained operation of businesses, i-dealers need to take action to gain the understanding and support of onlookers. To do this, i-dealers should be proactive in interactions, build trust and partnership with bystanders, and increase work engagement. By reducing knowledge hiding among bystanders and encouraging the free flow of knowledge, we can help ensure the sustainable growth of enterprises.
Coworkers need to let go of ingrained prejudices and hostile feelings they may have. Knowledge hiding is an unproductive form of retaliation, and can lead to a “lose–lose–lose” or “win–win–lose” situation [
9]. Instead, they should objectively assess events and set aside any preconceived notions or dissatisfaction with the manager. They can then strive to obtain similar employment arrangements by investing in self-improvement, such as observation and inquiry about feedback. These efforts can not only benefit coworkers in their career goals, but also foster a virtuous cycle of knowledge within the team, contributing to team and organizational performance in the long term.
Managers should cultivate an ethical leadership style by acting with integrity, fairness, and transparency in their behavior and making decisions equitably. Unethical leadership may seem beneficial in the short term but it can have a detrimental effect on long-term growth, stifling development opportunities and putting a company’s competitive advantage at risk. Implementing i-deals as a differentiated HR practice is unlikely to be completely fair [
48]. To prevent employees from misunderstanding the process, managers should promptly and objectively publicize the negotiating process and content of i-deals while fostering a fair and equitable organizational climate. This way, bystanders are more likely to evaluate i-deals favorably as they will believe the organization is effectively maintaining employment fairness and will subsequently adopt sensible coping strategies.
Organizations should be mindful of bystanders when implementing i-deals as the best talent can only provide the greatest benefit to the organization when integrated into a team environment that values teamwork [
85]. To help manage employee emotions, organizations should invest in training on stress management and emotion regulation. Furthermore, organizations should prioritize building relationships with employees that extend beyond financial considerations. This will result in increased loyalty and reliability, thus reducing the occurrence of knowledge hiding.
5.2. Limitations and Future Research
The present research offers valuable insights and directions for future research, which have meaningful implications from both a theoretical and practical perspective. However, we acknowledge the limitations of the research and suggest potential ways to address them. Specifically, the time-lag design effectively controlled for endogeneity, though the data could not verify causal relationships. To further improve the explanatory power of the model, future research could employ experimental manipulations. Additionally, this study examined the serial mediation of ERI and psychological distress. To deepen our understanding of this relationship, future studies could add the antecedent role of affective factors in knowledge hiding [
81,
82] and investigate the mediating role of negative emotions such as anxiety, anger, and hostility. Finally, recipients must mitigate bystanders’ hostile attitudes and gain their support for i-deals [
35]. Future research should explore the moderating role of i-dealers’ behaviors (e.g., helping behaviors, knowledge sharing, etc.) to increase the managerial effectiveness of differentiated HRM policies.