The impacts of leader–member guanxi and its differentiation on hotel employees moderated by Confucian values

•Leader-member guanxi (LMG), as an individual-level predictor, has a positive impact on hotel employees’ work engagement and task performance.•LMG Differentiation (LMGD), as a group-level predictor, has a negative impact on hotel employees’ work engagement and task performance in China.•Confucian values, as a cross-level moderator, diminishes the positive impacts of LMG on hotel employees’ work engagement and task performance.•Confucian values, as a cross-level moderator, reduces the negative impacts of LMGD on hotel employees’ work engagement in China. This study examines the impacts on hotel employees in China of leader–member guanxi (LMG), an Indigenous concept of the relationship between employees and their supervisor, and LMG differentiation (LMGD), the variance in LMG quality within a work team. Furthermore, a set of Confucian values is used as a cross-level moderator to further explain the effects of LMG and LMGD on employees’ work outcomes at both individual and group levels. Based on social cognitive learning theory and Confucian philosophy, research hypotheses were developed and tested using a sample of 483 employees and 75 of their supervisors from 14 Chinese hotels. The findings show that LMG and LMGD have unique effects on employees’ work outcomes at both individual and group levels, and that Confucian values moderated the impacts of LMG and LMGD. The implications are discussed in terms of unique perspectives towards employees of Eastern background for hospitality researchers and practitioners alike.