When and why does competitive psychological climate affect employee engagement and burnout?

Managers and scholars now more than ever recognize the importance of emphasizing and urging improved performance among employees. Extant literature and prior work highlight that perceived interpersonal competition in the workplace is influential in determining employees' career outcomes by shaping their job or career development experience (i.e., more or less engagement and burnout at work). However, our current understanding of when and why competitive psychological climate contributes to more or less engagement and burnout at work is limited, particularly from a work-specific, behavioral regulation perspective. Drawing on conservation of resources (COR) theory, and using multisource data collected from 306 employees and 37 supervisors in the retail bank sector, our results show that competitive psychological climate, when supported by contingent reward, facilitates exploratory learning, which in turn leads to more engagement and less burnout at work. In contrast, when aligned with contingent punishment, competitive psychological climate promotes exploitative learning, which in turn contributes to more burnout at work. Our work contributes to vocational theory and practice by specifying the work-specific conditions in which and behavioral processes through which employees respond positively and negatively to competitive psychological climate. Our findings provide managers with novel insights into their influential roles in facilitating the specific type of work behaviors employees adopt in response to competitive psychological climate, and how they subsequently feel at work.