Unpacking the Polarizing Effect of Artificial Intelligence Orientation on Employee Relations

This study investigates the polarizing effects of a firm’s artificial intelligence (AI) orientation on employee treatment and workplace relations. Drawing on the “automation-augmentation” paradox and social exchange theory, we argue that a greater AI orientation indicates the firm’s heightened need and emphasis on high-skilled employees, which in turn confer them a greater bargaining power against the firm, thus boosting the firm’s employee treatment strengths. Meanwhile, a greater AI orientation likely induces the marginalization of low-skilled employees, thus stimulating their adversarial responses in the workplace and then leading to exacerbated employer-employee conflicts. We further identify two boundary conditions moderating the AI orientation’s polarizing effects: one is the firm’s high-tech status, which may amplify the positive effect of AI orientation on employee treatment strengths and its deteriorating effect on employer-employee conflicts; the other is the firm’s employer reputation, which may weaken the positive effect of AI orientation on employee treatment strengths but accentuate its impact on employer-employee conflicts. Using a sample of Chinese listed firms from 2012 to 2021, we find strong support for our hypotheses. Our study contributes to extant research on AI orientation, employee relations, and workplace inequality. © Academy of Management Proceedings