How leader bottom-line mentality relates to employee innovation: a cross-layer model mediated by psychological contract breach

Purpose This study aims to examine how and when leader bottom-line mentality (BLM) affects employee innovation (EI) in the context of Chinese organisations in which psychological contract breach (PCB) is a mediator and moral identity (MI) is a moderator. Design/methodology/approach The authors distributed the questionnaires to technology and culture firms in 2 waves and obtained a sample of 308 employees in 56 teams. The authors used the hierarchical linear model (HLM) and bootstrap method for the hypothesis testing. Findings The authors conclude that leader BLM negatively influences EI. Specifically, leader BLM leads mainly to low EI by increasing PCB amongst employees. Moreover, MI plays a moderating role in the above mechanism, i.e. the higher the MI degree of employees, the stronger the mediating role of PCB and the stronger the negative impact of leader BLM. Practical implications This study argues that BLM is necessary for firm development, but paying too much attention to BLM may achieve the opposite effect. Reducing BLM or buffering the negative impact of BLM through various measures (e.g. human resource management) is appropriate for managers. Originality/value The authors discover a new mechanism and boundary condition, i.e. leader BLM has a negative impact on EI through PCB and MI strengthens the effect of leader BLM.