Abstract

Over the last two decades, performance management systems (PMSs) have been the focus of increasing attention. However, scant research has examined the link between individual‐ and organizational‐level performance in the context of cross‐border mergers and acquisitions. Employee withdrawal adversely affects organizations, and has thus been associated with negative consequences for organizations and regarded as a counterproductive work behavior. Our article presents an empirical investigation of determinants and consequences of employee withdrawal, and its impact on willingness to share tacit knowledge, knowledge transfer, and cross‐border acquisition performance in the context of Chinese acquisitions in the UK. Based on a cross‐sectional survey of 103 employees of an UK subsidiary and Chinese acquiring firm, we found that trust in the acquiring firm significantly reduces acquired firm employee withdrawal behaviors. Moreover, our findings indicate that employee withdrawal behaviors negatively impact employee willingness to share tacit knowledge. The findings further confirm that such willingness positively influences knowledge transfer, which, in turn, has a positive effect on cross border acquisition performance. Our article contributes to the PMS literature by enhancing the understanding of the process through which human resource management systems affect outcomes at different levels of analysis in the context of the cross‐border acquisitions.