Organizational politics and employee performance in the service industry: A multi-stakeholder, multi-level perspective

Organizational politics is everywhere in the workplace. While scholars have clearly shown the benefits of political skills (i.e., being politically savvy) and the costs of organizational politics (in terms of perception of organizational politics, POP), the contextual influences affecting how savvy employees navigate the political waters to achieve higher performance are less clear. We adopt a multi-stakeholder, multi-level perspective and explicitly recognize that the potential for conflicts of interests among various organizational actors (including employees, groups of coworkers, and managers) is a critical missing piece that can unite the literature on political skills and organizational politics. In particular, we theorize that effectiveness of politically skilled employees depends on both the political climate within their coworker group and their relative leader-member exchange (RLMX). Using a sample of sales representatives from two banks, we found a three-way interaction whereby employees' political skill is conducive to job performance when the group's political climate is weak (i.e., coworkers perceive little politics) and their RLMX is high. On the other hand, employees' political skill undermines their job performance when the group's political climate is strong (i.e., coworkers in the group perceive high levels of politics) and their RLMX is high. Our multilevel theorizing and findings offer additional insights into the intricate workings of organizational politics.