Empowerment versus pressure: How strict ‘up-or-out’ policy undermines distributed leadership's stimulation of faculty innovation in universities?

Given that the practical impact of the ‘up-or-out’ tenure-track reform adopted in China's higher education remains contested, this study explores its complex effect among distributed leadership, psychological empowerment and faculty innovation. Conducting a questionnaire survey from university faculty, the study indicated that distributed leadership significantly enhanced innovative work behaviour both directly and indirectly by fostering psychological empowerment, specifically through its all sub-dimensions (including self-determination, impact, meaning and competence). However, the tenure-track reform introduced a critical moderating condition: while tenure-track status itself showed no significant moderating effect, the strict ‘up-or-out’ contracts could weaken the positive effect of distributed leadership on faculty innovative work behaviour. This finding calls for balancing managerial accountability with professional autonomy within the ‘up-or-out’ tenure-track reform to foster a sustainable environment for faculty innovation.