PARTNERSHIP PRACTICES, LABOR RELATIONS

CLIMATE, AND EMPLOYEE ATTITUDES: EVIDENCE

FROM CHINA
MENG XI, QIN XU, XIAOYU WANG, AND SHUMING ZHAO*

As the labor relations climate in China has deteriorated in recent

years, some firms have turned to partnership approaches. Using
data collected from HR managers and employees in 190 companies
in five provinces of China, this study tests the applicability of part-
nership theory for Chinese enterprises. It identifies eight dimen-
sions of partnership practices and examines their effectiveness in
improving the labor relations climate and employee attitudes. Results
show that partnership practices are positively associated with labor
relations climate and employee attitudes, and that labor relations cli-
mate mediates the relationship between partnership practices and
employee attitudes (i.e., affective commitment, job satisfaction, and
turnover intention). These findings contribute to the literature on
partnership and labor relations climate and the operationalization of
partnership, and its effects, in the Chinese context.

S ince 2000, China’s economy has experienced rapid growth; its gross
domestic product (GDP) increased more than six times from RMB 9.98
trillion in 2000 to RMB 67.67 trillion (US$ 10.42 trillion) in 2015. Mirroring
China’s rapid growth, labor relations problems in China’s enterprises have
steadily increased. According to China’s national statistics, 135,000 cases of
labor dispute, involving about 420,000 people, occurred in 2000; the official
2013 data reported more than 666,000 disputes, involving 1 million workers.
Moreover, the increasing number of collective strikes over the past 14 years
indicates deteriorating labor relations in China’s enterprises. Against this
background, some well-known Chinese companies, such as Huawei,

*MENG XI is a PhD Candidate at Nanjing University. QIN XU is an Assistant Professor at Southeast

University. XIAOYU WANG is a PhD Candidate at Nanjing University. SHUMING ZHAO is Chair Professor and
Honorary Dean of the School of Business at Nanjing University. We thank Paul Marginson and three
anonymous reviewers for their invaluable and insightful comments and suggestions on earlier versions of
this manuscript. We also appreciate the feedback and help received from Runtian Jin, Betty S. Coffey,
Stephen Nicholas, and Russell D. Lansbury. The National Natural Science Foundation of China (No.
71332002; 71172063; 71402153) supported this study. Additional results and copies of computer pro-
grams used to generate the results presented in the article are available from the corresponding author
at zhaosm@nju.edu.cn.

KEYWORDs: partnership practices, labor relations climate, employee attitudes, Chinese context

ILR Review, XX(X), Month 201X, pp. 1–23

DOI: 10.1177/0019793916684778. Ó The Author(s) 2016
Journal website: ilr.sagepub.com
Reprints and permissions: sagepub.com/journalsPermissions.nav
2 ILR REVIEW

Lenovo, and Alibaba, have pioneered improvement of their labor relations

by implementing partnership practices and policies.
Initially developed by Western scholars (Cooke 1990; Kochan and
Osterman 1994; Guest and Peccei 2001), partnership theory addresses labor
relations problems between Western trade unions and business managers.
Balancing the mutual interests between employers and employees, partner-
ship theory aims to advance collaboration between the two parties, promot-
ing the achievement of common goals, such as harmonious labor relations
climates, higher work efficiency, productivity, and financial performance,
and lower absenteeism rates. Scholars have identified a range of partnership
practices, such as benefit/risk sharing, two-way communication, employee
participation, and employment security, and have reported on the effects of
these practices on improving the labor relations climate and ameliorating
employee attitudes (Cooke 1990; Kochan and Osterman 1994; Guest and
Peccei 2001; Rubinstein and Kochan 2001). For example, Guest and Peccei
(2001) showed that partnership approaches involved cooperation and that
employers and employees achieved mutual or reciprocal goals by working
together. Cooke (1990) found that adoption of partnership practices in an
organization allowed benefit sharing to yield win-win results for both the
organization and its employees. Furthermore, partnership practices were
found to contribute to organizational productivity and positive employee
attitudes (Rubinstein and Kochan 2001). The majority of studies on partner-
ship theory and practices have, however, been conducted in Western coun-
tries, especially the United States, the United Kingdom, and Australia
(Master, Albright, and Eplion 2006).
Given the effectiveness of such practices, a few Chinese scholars have
introduced partnership approaches and practices to debates in China
(Qing and Guo 2007; Li and Chen 2008; Guo 2008; Qing and Fu 2011). For
instance, Qing and Guo (2007) discussed the significance of partnership for
Chinese companies, and how to implement partnership practices, from a
theoretical perspective. The context of Chinese enterprises, however, differs
from that of Western enterprises. Most Chinese state-owned enterprises
have established trade unions in a way quite different from Western firms
(Ge 2005). Chinese trade unions also demonstrate a weaker capacity to
engage in discourse with management than do their Western counterparts.
According to Jia, You, and Du’s (2012) context-emic model, the application
of a theory in a new context needs to be tested empirically. Therefore, it is
also necessary to establish whether partnership theory and partnership prac-
tices can be applied to enterprises operating in the Chinese context. The
effects of partnership practice in China have largely still to be examined
empirically.
Employing both qualitative and quantitative methods, this study addresses
two important research themes. The first involves the existence and the com-
position of partnership practices in Chinese enterprises and seeks to identify a
scale of partnership practices suited to Chinese enterprises. The second is to
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 3

test the applicability and effectiveness of partnership theory in the Chinese

context and to determine whether partnership practices lead to a harmonious
labor relations climate in Chinese enterprises. Relatedly, do such practices
positively influence employees’ attitudes toward their organizations.
Our study makes several contributions to the literature on partnership
and labor relations climate. First, according to the context-emic model (Jia
et al. 2012), our article contributes to the theory of management and orga-
nization by modifying existing measures of partnership practices and testing
the applicability and effectiveness of partnership theory to China. Second,
the article develops a new scale of partnership practices to suit Chinese
enterprises, thereby providing a foundation from which scholars can con-
duct further empirical studies of labor relations and partnership in China.
Third, we test the influence of partnership practices on establishing a har-
monious labor relations climate within organizations and enhancing
employees’ positive attitudes toward their organizations in Chinese enter-
prises (Dastmalchian, Blyton, and Adamson 1989).

Theoretical Background and Hypotheses

Partnership Theory and Its Development in China
Over the past two decades, scholars have devoted considerable attention to
further development of partnership theory, especially the identification of
its key features and practices (Kochan and Osterman 1994; Guest and
Peccei 2001; Johnstone, Ackers and Wilkinson 2009; Geary and Trif 2011).
Kochan and Osterman (1994) argued that partnership was a management
tool for integrating benefits of employers and their employees by strength-
ening employees’ collective discourse powers. The practices of partnership
included innovative labor practices, stable employment practices, and
encouraged employee and union participation. Guest and Peccei (2001)
emphasized collaboration between employers and employees in pursuit of
common goals, such as high productivity and low absenteeism. Partnership
practices comprised treating employees benevolently, respecting employees’
rights and benefits, and emphasizing employees’ independent responsibil-
ities. Johnstone et al. (2009) and Geary and Trif (2011) focused on organi-
zational governance and alteration, identifying practices that included
allowing union representatives to participate in decision making; encoura-
ging collaboration and cooperation among managers, unions, and employ-
ees; and improving employees’ work and life quality. In general terms, these
scholars all emphasized that partnership is a new management model to
allow and encourage cooperation and collaboration among management,
unions, and employees toward the achievement of common goals, such as
harmonious labor relations, higher employees’ work efficiency and job per-
formance, and lower turnover rates and absenteeism.
With the labor relations climate deteriorating in Chinese enterprises in
recent years, and given the effectiveness of partnership theory in improving
4 ILR REVIEW

labor relations climate and employee attitudes in the West, early Chinese
partnership scholars borrowed the partnership theory approach as a poten-
tial path to improve the labor relations climate within Chinese enterprises
(Qing and Guo 2006; Guo 2008; Li and Chen 2008, 2010). In 2006, Qing
and Guo introduced and elaborated aspects of partnership theory including
its concept, connotation, theoretical basis, principle, and function. Li and
Chen (2008) followed by discussing possible implementation approaches to
effectively utilize partnership theory in improving severe labor relations
problems in Chinese firms, such as ensuring union and employee participa-
tion. Next, Luo (2010) discussed the application of partnership theory in
terms of labor relations governance, such as coordinating benefits and
behaviors of stakeholders, through the description of two research cases.
Finally, Li and Chen (2010) modified four dimensions of cooperative labor
relations including participation, job conditions, internal harmony, and
employment security and explored the positive influence of cooperative
labor relations on promoting firm performance.
Though these scholars have made important contributions in the early
Chinese partnership literature by introducing partnership theory, by dis-
cussing whether and how partnership could be applied, and by considering
anticipated effects in Chinese enterprises using descriptive research methods,
they did not empirically investigate the existence and the composition of
partnership practices in the context of Chinese enterprises or identify a
scale of partnership practices that could be applied to Chinese enterprises.
According to the taxonomy of theoretical contributions proposed by
Colquitt and Zapata-Phelan (2007), these early partnership scholars are
reporters of partnership theory without making contributions to either theory
building or theory testing. In addition, based on the context-emic model
developed by Jia et al. (2012), their studies made little contribution to con-
textualization in what and how partnership practices affected management
and organization theory in the Chinese context.
To enhance the theoretical contributions and value of partnership theory
in the Chinese context (Colquitt and Zapata-Phelan 2007; Jia et al. 2012;
Barkema et al. 2015), we develop a new scale of partnership practices that
can be applied to Chinese enterprises. Further, we empirically test the appli-
cation and effectiveness of partnership theory, and develop and test new
partnership practices in improving the labor relations climate and employee
attitudes simultaneously in Chinese enterprises. We depict our research
framework in Figure 1.

Partnership Practices and Labor Relations Climate

To measure the effectiveness of partnership practices in improving labor
relations in the Chinese context, we select the harmony dimension of labor
relations climate as an indicator. Dastmalchian et al. (1989) discussed the
development of the labor relations climate and supposed that industrial
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 5

Figure 1. Research Framework

relations, activities, or policies of management–employee relations influ-

enced the labor relations climate. The labor relations climate embodies the
state and relationship quality between employers and employees and
reflects the perceptions of atmosphere, norms, attitudes, and behaviors of
employees engaged in the interactive relationships of employees, unions,
and management (Cui, Zhang, and Qu 2012).
Many studies have shown that partnership practices positively affect the
labor relations climate (e.g., Gordon and Ladd 1990; Dastmalchian and
Blyton 1991; Barrett 1995; Deery and Iverson 2005). According to the study
of Gordon and Ladd (1990), a harmonious labor relations climate can be
built when employees are able to take part in decision making that consid-
ers their own interests within an organization. Otherwise, a hostile climate
will manifest. In a case study of an automobile parts manufacturing factory,
Dastmalchian and Blyton (1991) found that the factors influencing the
labor relations climate included identification and encouragement of union
participation in organizational change, participatory decision-making struc-
ture, human resource management policies, and other practices designed
to increase employee commitment and flexibility, such as training and tan-
gible and intangible rewards. These policies and practices are important
parts of partnership. Deery, Iverson, and Erwin (1999) identified three types
of variables influencing labor relations climate: work-setting variables (i.e.,
autonomy, routinization, distributive justice, promotion opportunity, job
security, and job satisfaction), environmental variables (union instrumental-
ity and external job opportunity), and personal variables (age, tenure, edu-
cation, and gender). A subsequent study of 305 branches of a multinational
bank found that procedural justice, unions’ comprehensive negotiation
mechanisms, and employees’ intentions to share information with unions
had positive effects on the labor relations climate (Deery and Iverson
2005).
These observations suggest that a harmonious labor relations climate
emerges when an enterprise takes measures to promote employee participa-
tion in decision making; to provide for job autonomy, promotion opportu-
nity, and job security; and to implement efficient human resource
management practices and policies. By contrast, if the company restricts
employees or unions from participating in decision making related to their
own issues, or limits employees’ rights, employees would be less likely to
6 ILR REVIEW

cooperate with the company, resulting in a negative labor relations climate.

Therefore, we hypothesize:

Hypothesis 1: Partnership practices are positively related to the labor relations cli-
mate at an organizational level.

Partnership Practices and Employee Attitudes

Affective commitment, job satisfaction, and turnover intention are regarded
as important outcomes and predictors of management practices and activi-
ties (Wright and Boswell 2002) and have been used extensively in previous
studies (Vandenberg, Richardson, and Eastman 1999; Takeuchi, Chen, and
Lepak 2009; Wu and Chaturvedi 2009). Affective commitment refers to the
consistent tendency to maintain the activities arising from an employee’s
unilateral investment in his or her organization (Meyer and Allen 1991)
and is considered a psychological tie between an employee and his or her
organization (Allen and Meyer 1997). Job satisfaction is regarded as a posi-
tive mindset produced through personal work-related experience (Locke
1976), closely related to an employee’s in-role and out-role performance
(Judge and Larsen 2001; LePine, Erez, and Johnson 2002). As for turnover
intention, if an employee is not satisfied with his or her job, does not trust
the organization, or cannot achieve his or her own career goals, he or she
will be less willing to stay on with the organization (Tsui, Egan, and O’Reilly
1992). As an important indicator of employee attitudes, turnover intention
has been shown to be a stable predictive variable of actual turnover beha-
vior (Kraut 1975; O’Reilly, Chatman, and Caldwell 1991). Therefore, to test
the applicability of partnership theory and the effectiveness of partnership
practices in improving employee attitudes, we study employee affective com-
mitment, job satisfaction, and turnover intention as indicators.
Partnership practices may influence employee attitudes. Guest and
Peccei (2001) argued that successful partnership practices usually arose
from reciprocal commitment and responsibility between an employer and
its employees. The principles of partnership guarantee consistent interests
between employers and employees within organizations. Principles and
practices based on partnership theory include a commitment to organiza-
tional success, benefits sharing, employment security, employee voice,
employee training and development, and flexible working hours. Such prac-
tices ensure effective communications between employers and their employ-
ees, solve disputes within organizations, and mitigate some negative effects,
and, thereby, enhance the level of mutual trust between employers and
employees, the quality of labor relations, and organizational performance
(Master et al. 2006). According to social exchange theory (Blau 1964;
Shore, Tetrick, Lynch, and Barksdale 2006), when an enterprise imple-
ments partnership practices, employees could realize and gain benefits pro-
vided by the company. If so, employees would likely reciprocate through
holding positive attitudes and behaviors that benefit the company.
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 7

In addition, a growing number of studies have shown that significant indi-

vidual differences occur in affective commitment, job satisfaction, and turn-
over intention within and outside an organization (Ostroff 1992, 1993;
Takeuchi et al. 2009). An employee’s attitudes are affected by individual
experience and perceptions of environments and backgrounds. Based on a
social information processing approach (Salancik and Pfeffer 1978), individ-
uals adapt their attitudes, behaviors, and beliefs to fit the social context or
environment. As for partnership practices, employees’ perception of efforts
from their employer to achieve mutual benefits may cause the employees to
change their attitudes to promote the employer. In light of the above dis-
cussion, the following hypotheses are proposed.

Hypothesis 2a: Partnership practices at the organizational level are positively

related to employees’ affective commitment.
Hypothesis 2b: Partnership practices at the organizational level are positively
related to employees’ job satisfaction.
Hypothesis 2c: Partnership practices at the organizational level are negatively
related to employees’ turnover intention.

Mediating Effects of the Labor Relations Climate

According to social information processing theory, organizational climate
affects an employee’s attitudes and behaviors. The social context or environ-
ment in which employees live affects their attitudes toward an organization
by directly providing receivable beliefs, attitudes, needs, and behavior
guidance (Salancik and Pfeffer 1978). Based on this theory, we expect that
the labor relations climate, as a special social context, directly affects an
employee’s attitudes to his or her job environment and organization. In
other words, the labor relations climate at the organizational level will signif-
icantly affect an employee’s affective commitment, job satisfaction, and
turnover intention at the individual level.
Master, Albright, and Eplion (2006) built an operational framework in
which partnership practices elevated the frequency and quality of contact
between employers and employees so as to create a harmonious labor rela-
tions climate, bringing benefits for the organization and its employees.
According to this input-transformation-output mechanism, information
inputs, such as an organization’s management practices, employment pat-
terns, and human resources management practices, will be transformed
into employees’ perceptions of the labor relations climate, which eventually
affects the employees’ attitudes, behaviors, and organizational performance
(Dastmalchian 1986; Boxall and Macky 2009). Practices of partnership, such
as union participation in decision making related to employees’ interests,
contribute to a harmonious labor relations climate and enhance employees’
welfare and organizational performance. These improvements in employ-
ees’ benefits will bring more positive attitudes and behaviors, which lead to
mutual benefits and win-win results encompassing the organization and its
8 ILR REVIEW

employees. Following this rationale, the labor relations climate builds a link
between partnership practices at the organizational level and employees’
attitudes at the individual level, indicating that the labor relations climate
plays a mediating role in the association between partnership practices and
employees’ attitudes (Dastmalchian and Blyton 1991; Yan and Li 2012).
Informed by social information processing theory, our study tests the pro-
position that partnership practices affect employees’ affective commitment,
job satisfaction, and turnover intention mainly through the special social
mechanism of the prevailing labor relations climate. Specifically, we exam-
ine the empirical validity of the following hypotheses:

Hypothesis 3a: Labor relations climate mediates the relationship between partner-
ship practices and employees’ affective commitment.
Hypothesis 3b: Labor relations climate mediates the relationship between partner-
ship practices and employees’ job satisfaction.
Hypothesis 3c: Labor relations climate mediates the relationship between partner-
ship practices and employees’ turnover intention.

Method
Procedure and Participants
We used questionnaires to collect data from enterprises in Jiangsu,
Shandong, Fujian, and Guangdong provinces and in Tianjin City during
2012. All locations are on the east coast of China where the economy and
enterprises are relatively well developed. To ensure the reliability and qual-
ity of data, we collaborated with a local government agency to conduct the
survey. We sent questionnaires to local agencies by mail and sought their
help in collecting the data from individual companies. We selected compa-
nies from lists available in the local government systems. A human resource
(HR) manager of each company was identified, and employees were ran-
domly picked by HR managers to participate in our study.
We sent 2,800 employee questionnaires and 350 HR questionnaires to
350 enterprises, collecting 2,196 employee samples and 315 HR manager
samples from 315 enterprises. To determine the usable sample, we applied
three standards. First, a company should have an established union, as part-
nership theory and labor relations climate were developed under the con-
text of unions. Companies without a union were excluded. Second, the
employee response rate of each company must reach at least 30%. Third, if
the scores rated by an employee in the questionnaire were the same, for
example, if all scores were ‘‘7’’ or ‘‘1,’’ we deleted the response. After apply-
ing these standards, the participants numbered 1,265 employees and 190
HR managers from 190 different enterprises. The total effective response
rate of employees was 57.6%, and there were 6.7 employee responses on
average from each enterprise.
We show the characteristics of the samples in Table 1.
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 9

Table 1. Characteristics of Samples

In terms of 1,265 employees Among 190 enterprises

Gender (%) Types

Male 51.9 Stated-owned 53
Female 48.1 Joint ventures 16
Average age by year 30.4 Foreign 21
Private 81
Education (%) Others 19
Middle school or below 18.1 Industry
Junior college 32.4 Manufacturers 73
Bachelor degree 41.2 Nonmanufacturers 117
Master degree or above 6.3 Numbers of employees
Tenure by month Less than 50 16
Mean 73.56 51–100 26
Minimum 1 101–500 84
Maximum 398 501–2,000 22
Income by month (%) More than 2,000 42
Less than 2,000 Yuan 9.2 Organization age
2,001–2,999 33.0 Less than 5 13
3,000–3,999 24.3 5–10 40
4,000–4,999 14.2 11–20 62
More than 5,000 17.7 More than 20 75

Measures
Partnership Practices
The theory of partnership, and partnership practices developed and
applied in the West, is limited in terms of its capacity to explain and solve
Chinese managerial problems (Zheng, Jia, You, and Cai 2013; Barkema
et al. 2015). To identify a set of practices of partnership that can be applied
in the Chinese context, we followed the procedures recommended by Yang
and Diefendorff (2009) to scale partnership practices. First, we created a
pool of partnership practices from existing scales in previous studies
(Walton 1985; Kochan and Osterman 1994; Delery and Doty 1996; Guest
and Peccei 2001; Rubinstein and Kochan 2001; Rubinstein and Heckscher
2003; Roche 2007, 2009; Guest, Brown, Peccei, and Huxley 2008; Li and
Chen 2008), including selection, training and development, cooperation,
employee participation, flexible job design, teamwork, job security, flexible
compensation, performance management, benefit/risk sharing, two-way
communication, information sharing, participation by employee representa-
tives, employment security, mutual trust, and so on (Appendix Table A.1).
Next, we conducted six semi-structured interviews with three managers of
human resources management departments and nine employees from
three different enterprises (one HR manager or three employees per inter-
view). Our research team selected three large-sized companies in Nanjing
City, namely a foreign company, a state-owned company, and a private com-
pany, to conduct the interviews.
10 ILR REVIEW

In the interviews, we explained to participants that we were studying the

practices of partnership in enterprises in China. To help participants under-
stand the partnership practices, we briefly provided information on back-
ground, definition, principles, and the development of the partnership
theory. Then we asked HR managers to recall some customs related to part-
nership practices or according to the principles of partnership that the
companies had implemented. We also asked the HR managers to clarify the
specific contents of the practices. Next, we had prepared a list of partner-
ship practices in advance, and we asked the HR managers to select from the
list the practices implemented in their companies. Each interview with a
HR manager lasted about one hour. The purpose of the interview with
employees was to confirm the practices of partnership proposed and
selected by HR managers. We asked them whether they could think of
other practices that HR managers had not identified. The interviews with
employees lasted about 30 minutes.
Based on the observations made during our interviews, we identified eight
partnership dimensions with 22 practices of partnership in Chinese enter-
prises. The dimensions were employee participation, participation by
employee representatives, flexible compensation, two-way communication, job
security, training, employment security, and benefit sharing (Appendix B).
To confirm partnership practices’ eight-factor structure, we utilized
LISREL 8.80 to conduct confirmatory factor analyses (CFA). Using our data,
we compared the fundamental eight-factor model with two, seven-factor
models that combined two of eight factors, such as employee participation
and participation by employee representatives, and flexible compensation
and training, respectively, in accordance with the correlation coefficients of
eight practices in Table 2. The fundamental model fitted the data well, with
x2 (182) = 1257.12; RMSEA = 0.068; CFI = 0.98; IFI = 0.98; NNFI = 0.97. The
seven-factor models combined employee participation with participation by
employee representatives, with x2 (189) = 1719.62; RMSEA = 0.080; CFI =
0.97; IFI = 0.97; NNFI = 0.96; and flexible compensation with training, with
x2 (189) = 1632.65; RMSEA = 0.078; CFI = 0.97; IFI = 0.97; NNFI = 0.96 also
fitted the data well. A comparison of the three models using the Chi-square
difference test (Dx2 (7) = 462.50, p \ 0.001; Dx2 (7) = 375.53, p \ 0.001)
indicated that the basic model, an eight-factor model, fitted the data better
than the two, seven-factor models. These findings support the eight dimen-
sions of partnership practices, and the average internal consistency reliabil-
ities were 0.89, 0.93, 0.85, 0.93, 0.89, 0.92, 0.91, and 1, respectively. These
partnership practices will be more readily adapted to the Chinese context
than those used to analyze Western firms.

Labor Relations Climate

The scale used to measure labor relations climate was developed from
Dastmalchian et al. (1989). The initial scale had five dimensions: harmony,
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 11

Table 2. Correlation Coefficients of Partnership Practices

Practices Mean SD 1 2 3 4 5 6 7

1. Employee participation 3.97 1.03

2. Participation by employee 4.27 1.04 .78**
representatives
3. Flexible compensation 5.14 0.89 .50** .55**
4. Two-way communication 4.51 1.06 .63** .63** .66**
5. Job security 5.56 0.96 .38** .41** .60** .43**
6. Training 4.78 0.95 .60** .61** .74** .75** .57**
7. Employment security 5.21 0.92 .36** .47** .59** .50** .67** .58**
8. Benefit sharing 4.07 1.32 .61** .53** .49** .62** .33** .53** .36**

Notes: N = 190.
**p \ .01 (2-tailed).

openness, hostility, apathy, and promptness. Consistent with Deery and

Iverson (2005), we used harmonious labor relations climate with 10 items to
test climate in one enterprise. A sample item is ‘‘union and management
work together to make this organization a better place in which to work.’’
The internal consistency reliability of labor relations climate was 0.97.

Affective Commitment
The scale employed to measure affective commitment was developed from
Allen and Meyer (1997) with eight items. A sample item is ‘‘I would be very
happy to spend the rest of my career with this company.’’ The internal con-
sistency reliability of affective commitment was 0.91.

Job Satisfaction
We utilized the scale from Takeuchi et al. (2009) to measure employees’
job satisfaction. A sample item is ‘‘All in all, I am satisfied with my job.’’ The
internal consistency reliability of job satisfaction was 0.83.

Turnover Intention
The items to measure turnover intention were developed by Wang, Law,
and Chen (2002). A sample item is ‘‘I often think of quitting my present
job.’’ The internal consistency reliability of turnover intention was 0.92.

Control Variables
We employed two sets of control variables in this study. First, we controlled
for individual demographic characteristics including employee age, gender,
education, and tenure. Second, we controlled for an enterprise’s type (man-
ufacturer and nonmanufacturer) and scale (small- and medium-sized and
large-sized).
12 ILR REVIEW

Table 3. Rwg, ICC (1), and ICC (2) of Partnership Practices and
Labor Relations Climate

Variable Rwg ICC (1) ICC (2)

Practices of partnership
Employee participation 0.72 0.39 0.81
Participation by employee representatives 0.72 0.38 0.80
Flexible compensation 0.74 0.36 0.79
Two-way communication 0.75 0.40 0.82
Job security 0.78 0.47 0.86
Training 0.76 0.40 0.82
Employment security 0.78 0.41 0.82
Benefit sharing 0.83 0.36 0.79
Labor relations climate 0.92 0.45 0.85

Notes: N = 190. Rwg, Within-group rating consistency; ICC, Intra-class correlation.

Analytical Approach
Considering that we collected data from two levels (individual and organiza-
tional), we employed hierarchical linear modeling (HLM 6.0 [Raudenbush
and Bryk 2002]) to test our hypotheses. In this study, partnership practices
and labor relations climate were at the organizational level (Level 2), and
employees’ affective commitment, job satisfaction, and turnover intention
were at the individual level (Level 1). Following the methods of Baron and
Kenny (1986) and Nandkeolyar et al. (2014), we tested all hypothesized
models incrementally.

Results
Aggregation Test
Partnership practices and labor relations climate were aggregated from the
data on employees’ perceived partnership practices and the labor relations cli-
mate. To confirm the validity of the aggregation, we employed within-group
rating consistency (Rwg) and intra-class correlation (ICC (1) and ICC (2)). As
seen in Table 3, the means of Rwg of partnership practices and labor relations
climate were all larger than 0.7; ICC (1) and ICC (2) of partnership practices
and labor relations climate were all larger than 0.05 and 0.5, respectively.
These observations show that the Rwg, ICC (1), and ICC (2) of partnership
practices and the labor relations climate are robust (James 1982; George and
Bettenhausen 1990). Thus, perceived practices of partnership and perceived
labor relations climate by employees can be aggregated into high-level part-
nership practices and the labor relations climate.

Correlation Analysis
Table 4 reports the mean value, standard deviations, and correlations associ-
ated with all main and control variables. Note that at an individual level,
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 13

Table 4. Means, Standard Deviation, and Correlations of Variables

Variable Mean SD 1 2 3 4 5 6 7

Individual level
1. Employee gender 1.48 0.50
2. Employee age 30.43 7.01 –.16**
3. Employee education 2.36 0.86 .05 –.16**
4. Employee tenure 66.81 73.56 –.10** .70** –.11**
5. Employee income 2.99 1.25 –.14** .21** .44** .18**
6. AC 4.79 1.17 .02 –.05 .03 –.06* .10**
7. JS 5.10 1.15 .00 .01 –.03 .00 .04 .59**
8. TI 2.62 1.44 –.06* –.11** .01 –.12** –.11** –.35** –.39**
Organizational level
1. Type 2.98 1.43
2. Industry 0.38 0.49 .11
3. Scale 3.25 1.19 –.38** .09
4. Age 3.05 0.94 –.13 –.01 .44**
5. PP 4.69 0.80 –.00 –.12 –.15* –.04
6. LRC 4.89 0.96 –.02 –.11 –.12 –.03 .67**

Notes: Individual level, n = 1,265; Organizational level, n = 190; male = 1, female = 2. AC, Affective
commitment; JS, Job satisfaction; LRC, Labor relations climate; PP, Partnership practices; TI, Turnover
intention.
*p \ 0.05, **p \ 0.01, ***p \ 0.001.

employees’ gender and age are negatively related to turnover intention (r =

20.06, p \ .05, r = 20.11, p \ .01, respectively); tenure is negatively related
to affective commitment and turnover intention (r = 20.06, p \ .05; r =
20.12, p \ .01, respectively); and income is positively related to affective
commitment (r = 0.10, p \ .01) and negatively related to turnover intention
(r = 20.11, p \ .01). At the organizational level, the scale of an enterprise
is negatively related to partnership practices (r = 20.15, p \ .01), while
partnership practices are positively related to the labor relations climate (r =
0.67, p \ .01).

Hypotheses Testing
We employed multiple regression analyses to test the influence of partner-
ship practices on the labor relations climate. We also used hierarchical lin-
ear models to test the effects of partnership practices and the prevailing
labor relations climate on employees’ affective commitment, job satisfac-
tion, and turnover intention and to test the mediating effects of labor rela-
tions climate among partnership practices and affective commitment, job
satisfaction, and turnover intention. The results are shown in Tables 5A, 5B,
and 5C. As shown in the column presenting the base model 0 in Tables 5A,
5B, and 5C, the practices of partnership have a positive effect on the labor
relations climate (b = 0.77, p \ .001), which fully support Hypothesis 1.
We followed the testing method (model 2-2-1) proposed by Baron and
Kenny (1986) and Nandkeolyar et al. (2014) to assess the mediating effect
14 ILR REVIEW

Table 5A. HLM Results of Affective Commitment as a Dependent Variable

LRC (SPSS) AC

Variable Model 0 Model 1a Model 2a Model 3a Model 4a Model 5a

INTRCPT (g00) 5.26*** 4.78*** 5.32*** 1.24*** 1.67*** 1.25***

(.21) (.06) (.27) (0.346) (0.312) (0.323)
Level 2
Industry (g01) –0.00 –0.30* –0.19* –0.19* –0.18*
(.07) (.13) (.08) (.08) (.07)
Scale (g02) 0.01 –0.10 –0.01 –0.02 (.03) –0.01
(.03) (.06) (.03) (.03)
PP 0.77*** 0.79*** 0.31***
(.04) (.05) (.09)
LRC 0.68*** 0.46***
(.03) (.08)
Level 1
Gender(g10) 0.08 0.05 0.07 0.06
(.06) (.06) (.06) (.06)
Age(g20) –0.01 –0.01 –0.01 –0.01
(.01) (.01) (.01) (.01)
Tenure(g30) 20.10 20.09 20.07 20.08
(.05) (.04) (.05) (.05)
Income (g40) 0.10** 0.07* 0.07* 0.07*
(.04) (.03) (.03) (.03)
s2 0.83 0.81 0.81 0.81 0.81
t00 0.54 0.50 0.14 0.10 0.09
R2 ICC (1) = 0.396
x2(d.f.) 1012.56 883.41 363.05 314.14 295.15
(189)*** (183)*** (182)*** (182)*** (181)***
Model deviance 3610.84 3246.66 3092.72 3069.19 3062.90

Notes: Level 1, n = 1,265; Level 2, n = 190. AC, Affective commitment; HLM, Hierarchical linear model;
LRC, Labor relations climate; PP, Partnership practices.
*p \ 0.05, **p \ 0.01, ***p \ 0.001, all coefficients are final estimation of fixed effects with robust
standard errors.

of labor relations climate on the relationship between partnership practices

and employee attitudes. We first tested the significance of the employee atti-
tudes between group variance (namely null model; see model 1a in Table
5A, model 1b in Table 5B, and model 1c in Table 5C). Taking affective
commitment as an example, results show that between-group variance of
employees’ affective commitment accounts for 39.6% of the total variance,
while 60.4% is from within-group variance (ICC (1) = 0.40, s2 = 0.83, t 00 =
0.54, x2(189) = 1012.56, p \ .001). It is clear that employees’ affective com-
mitment has a significant between-group variance. Similarly, employees’ job
satisfaction and turnover intention have significant between-group var-
iances. Therefore, we further explored the factors affecting employee atti-
tudes at the organizational level and derived an empirical basis for
subsequent analyses. Second, we tested the significant influence of partner-
ship practices on employee attitudes (see model 3a in Table 5A, model 3b
in Table 5B, and model 3c in Table 5C). Results show that partnership
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 15

Table 5B. HLM Results of Job Satisfaction as a Dependent Variable

LRC(SPSS) JS

Variable Model 0 Model 1b Model 2b Model 3b Model 4b Model 5b

INTRCPT(g00) 5.26*** 5.11*** 5.31*** 2.47*** 2.64*** 2.496***

(.21) (.05) (.27) (.52) (.51) (0.537)
Level 2
Industry (g01) –0.00 –0.18 –0.13 –0.12 –0.122
(.07) (.12) (.10) (.10) (0.099)
Scale (g02) 0.01 –0.05 0.02 0.02 0.018
(.03) (.06) (.04) (.04) (0.036)
PP 0.77*** 0.56*** 0.105
(.04) (.08) (0.11)
LRC 0.51*** 0.431***
(.07) (0.1)
Level 1
Gender (g10) 0.02 0.00 0.02 0.013
(.07) (.07) (.07) (0.067)
Age (g20) –0.00 0.00 0.00 0.001
(.01) (.01) (.01) (0.005)
Tenure (g30) –0.07 –0.08 –0.08 –0.076
(.05) (.05) (.05) (0.045)
Income (g40) 0.09** 0.05 0.05 0.049
(.03) (.03) (.03) (0.033)
s2 0.91 0.89 0.89 0.89 0.886
t 00 0.41 0.43 0.24 0.20 0.203
R2 ICC (1) = 0.31
x2 (d.f.) 764.81 741.75 487.76 438.67 435.34
(189)*** (183)*** (182)*** (182)*** (181)***
Model deviance 3712.23 3336.93 3273.37 3254.22 3254.04

Notes: Level 1, n = 1,265; Level 2, n = 190. HLM, Hierarchical linear model; JS, Job satisfaction; LRC,
Labor relations climate; PP, Partnership practices.
*p \ 0.05, **p \ 0.01, ***p \ 0.001, all coefficients are final estimation of fixed effects with robust
standard errors.

practices have positive and significant effects on employees’ affective com-

mitment (b = 0.79, p \ .001) and job satisfaction (b = 0.56, p \ .001), and
have a negative and significant effect on employees’ turnover intention (b =
20.44, p \ .001). Last, we tested the influence of partnership practices and
labor relations climate on employee attitudes, and the mediating effects of
the labor relation climate (see model 5a in Table 5A, model 5b in Table 5B,
and model 5c in Table 5C). Results show that the labor relations climate
has positive and significant effects on affective commitment (b = 0.46, p \
.001) and job satisfaction (b = 0.43, p \ .001), and a negative and signifi-
cant effect on turnover intention (b = 20.56, p \ .001). At the same time,
the regression coefficient of partnership practices on affective commitment
is lower, but still significant (see model 5a in Table 5A, b = 0.31, p \ .001).
This finding suggests that labor relations climate partially mediates the rela-
tionship between practices of partnership and affective commitment.
16 ILR REVIEW

Table 5C. HLM Results of Turnover Intention as a Dependent Variable

LRC(SPSS) TI

Variable Model 0 Model 1c Model 2c Model 3c Model 4c Model 5c

INTRCPT (g00) 5.26*** 2.61*** 2.90*** 5.15*** 5.53*** 5.147***

(.21) (.07) (.34) (.58) (.57) (0.599)
Level 2
Industry (g01) –0.00 0.19 0.13 0.11 0.118
(.07) (.15) (.14) (.14) (0.136)
Scale (g02) 0.01 0.04 –0.00 –0.01 0.0
(.03) (.07) (.06) (.06) (0.058)
PP 0.77*** –0.44*** 0.155
(.04) (.09) (0.145)
LRC –0.45*** –0.557***
(.08) (0.129)
Level 1
Gender (g10) –0.22** –0.21** –0.21** –0.222**
(.07) (.07) (.07) (0.073)
Age (g20) –0.01 –0.01 –0.01 –0.01
(.01) (.01) (.01) (0.007)
Tenure (g30) 0.10 0.10 0.10 0.097
(.06) (.06) (.06) (0.059)
Income (g40) –0.08 –0.07 –0.07 –0.067
(.05) (.05) (.05) (0.045)
s2 1.28 1.25 1.25 1.25 1.247
t00 0.80 0.73 0.62 0.56 0.558
R2 ICC (1)=0.39
x2 (d.f.) 975.81 840.86 740.10 686.57 685.071
(189)*** (183)*** (182)*** (182)*** (181)***
Model deviance 4188.78 3759.58 3737.64 3722.92 3725.63

Notes: Level 1, n = 1,265; Level 2, n = 190. HLM, Hierarchical linear model; LRC, Labor relations
climate; PP, Partnership practices; TI, Turnover intention.
*p \ 0.05, **p \ 0.01, ***p \ 0.001, all coefficients are final estimation of fixed effects with robust
standard errors.

Moreover, practices of partnership have no significant effects on job satisfac-

tion (see model 5b in Table 5B, b = 0.11, p . .05) and turnover intention
(see model 5c in Table 5C, b = 0.16, p . .05), which suggests that the labor
relations climate fully mediates the relationships among partnership prac-
tices, job satisfaction, and turnover intention. Thus, Hypotheses 2a, 2b, 2c
and Hypotheses 3a, 3b, 3c are fully supported.
According to model 4a in Table 5A, model 4b in Table 5B, and model 4c
in Table 5C, the labor relations climate has a significant influence on
employee attitudes. Specifically, labor relations climate has positive effects on
affective commitment (b = 0.68, p \ .001) and job satisfaction (b = 0.51, p \
0.001), and a negative effect on turnover intention (b = 20.45, p \ .001).

Discussion and Conclusion

In this study, we developed a Chinese enterprise-specific scale of partner-
ship practices and tested their effectiveness and influence on the labor
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 17

relations climate and employee attitudes in the Chinese context. Our find-
ings show that partnership practices suited to Chinese enterprises consisted
of employee participation, participation by employee representatives, flex-
ible compensation, two-way communication, job security, training, employ-
ment security, and benefit sharing. Also, our results manifest the positive
effects of partnership practices on improving labor relations climate and
employee attitudes. Specifically, partnership practices have significant and
positive effects on the labor relations climate, employees’ affective commit-
ment, and job satisfaction but a negative effect on employees’ turnover
intention. In addition, the labor relations climate partially mediates the rela-
tionship between partnership practices and employees’ affective commit-
ment but fully mediates the relationships between partnership practices and
employees’ job satisfaction as well as turnover intention.
The environment and internal contexts that Chinese enterprises con-
front differ from those of Western enterprises (Barkema et al. 2015).
Therefore, we empirically test whether Western management theories offer
meaningful explanations for Chinese management problems and, where
appropriate, develop theories of Chinese management in the Chinese con-
text (Chen, Jia, and Li 2006). According to the context-emic model pro-
posed by Jia et al. (2012), our article contributes to research on partnership
theory in the Chinese context by emphasizing the what and how of contex-
tualization. Specifically, the operationalization of the concept of partner-
ship, in terms of modifying a new set of partnership practices, represents a
conceptual contribution. A refined set of partnership practices was devel-
oped to address the core question as to whether partnership practices
existed in Chinese enterprises, which had been left unanswered by previous
scholars. Our new scale of partnership practices applied to Chinese enter-
prises had eight dimensions with 22 items, which differed only slightly from
the scales utilized by Kochan and Osterman (1994), Guest and Peccei
(2001); Guest et al. (2008), and Roche (2007, 2009) in Western contexts.
Our study also provides a feasible and solid foundation for future research
on partnership in Chinese firms.
In addition, our article contributes to partnership theory by introducing
the mediating role of labor relations climate and thereby addressing the
how dimension of contextualization. According to Jia et al. (2012: 178), this
means ‘‘describing an article’s contextualization by changing relationships
among existing constructs within a context or by introducing new relation-
ships of constructs [will] help deepen context meanings.’’ In this respect,
we tested the mediating role of labor relations climate in influencing the
relationship between partnership practices and employee attitudes in the
Chinese context. The findings not only contribute to the external validity
and generalization of partnership theory in different contexts but also sup-
port the effectiveness of partnership theory and partnership practices in the
context of Chinese enterprise from an empirical perspective.
18 ILR REVIEW

Finally, by showing the mediated association between partnership prac-

tices and employees attitudes, the findings of the present study go beyond
those of the existing literature. Several studies have indicated that partner-
ship practices predict positive employee commitment to an organization,
high job satisfaction, and low turnover intention (Kochan and Osterman
1994; Guest and Peccei 2001; Geary and Trif 2011) but without addressing
the role of labor relations climate. Overall, our findings show that partner-
ship theory and partnership practices have a significant potential to foster
harmonious labor relations climates, and that both partnership practices
and harmonious labor relations climate are conducive to improving
employee attitudes in the Chinese context. The finding has significant
implications for both practitioners and policymakers.
We note certain limitations of this present study. First, since the study
used a cross-sectional survey method, the causal-effect associations among
partnership practices, labor relations climate, and employees’ attitudes can-
not be inferred. Although our empirical results are consistent with our
hypotheses, we cannot rule out other possible factors that affect the rela-
tionships among these variables. Future research should further explore the
causal relationship and interactions by employing a longitudinal-design
investigation method or by adopting the case study approach. Second, our
research has not been able to directly address the relationship between
partnership approaches and practices and labor disputes. To our knowl-
edge, however, no firm-level measure exists of the scale of labor disputes or
conflicts (Xi and Zhao 2014). In addition, grievances are often used as a
measure of conflict and disputes in Western labor relations studies, but
Western-style grievance procedures have not been applied on a large scale
in the Chinese context (Su and Wright 2012). Accordingly, the develop-
ment of a scale capable of reflecting the severity of labor disputes or identi-
fying employees’ grievances would be most valuable. Finally, employee or
union participation plays an extremely important role in partnership prac-
tices. We did not explore how employees and unions participate in the part-
nership, however, which is something that has also been neglected by other
scholars working in the partnership domain (Guest and Peccei 2001; Roche
2007, 2009). Thus, further research is called for to examine this issue.
 Appendix A

Table A.1. The Pool of Partnership Practices

Walton Kochan and Guest and Rubinstein and Rubinstein and Roche Guest, Brown, Peccei,
Dimensions (1985) Osterman (1994) Peccei (2001) Kochan (2001) Heckscher (2003) (2007, 2009) and Huxley (2008)

Selection, training, and development O O O

Cooperation O O
Employee participation O O O O
Flexible job design O O O
Teamwork O O O
Job security O O O
Flexible compensation O O O O
Performance management O O O
Benefit/risk sharing O O O
Two-way communication O O O
Information sharing O O O
Participation by employee representatives O O O
Employment security O O O
Mutual trust O O O
20 ILR REVIEW

Appendix B
Scale of Partnership Practices in Chinese Context
Employee participation

1. Employees can directly participate in decisions about their own work.

2. Employees can directly participate in decisions about their own interests.
3. Employees can directly participate in decisions about organization-related
issues.

Participation by employee representatives

4. Union can participate in decisions about employee’s interests.

5. Union plays an important role in maintaining employees’ legal rights and
interests.
6. Union can participate in decisions about organization-related issues.

Flexible compensation

7. The company makes regular appraisals at least annually.

8. Employees are covered by individual performance-related pay.
9. Employees are covered by some system of group- or team-based rewards.

Two-way communication

10. The company conducts regular surveys about employees’ attitudes.

11. The company collects employees’ opinions regularly and gives feedback.
12. The company has unobstructed channels of complaints and appeals.

Job security

13. All employees enjoy vacations, retirement, and other kinds of subsidies.
14. All employees have health insurance.
15. The workplace is safe, with no risk.

Training

16. The company provides plenty of training courses for employees.

17. The company provides relevant training for new employees to help them
perform their job.
18. The company provides training to help employees merit a promotion in the
enterprise.

Employment security

19. An employee can work in the company as long as he or she is willing to stay.
20. The company will not easily dismiss any employee.
21. The company provides stable job security for all employees.
 PARTNERSHIP, LABOR RELATIONS CLIMATE, AND EMPLOYEE ATTITUDES 21

Benefit sharing

22. An employee in the company receives bonuses based on the profit of the
organization.

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