The impact of AI service failure on human employee behavior and customer service performance

Purpose This study aims to investigate how and when artificial intelligence (AI) service failure stimulates employees’ differentiated work behaviors. Design/methodology/approach A multi-wave, multi-source survey involving 284 employee-supervisor pairs was conducted across 15 four-star and five-star hotels in Guangzhou, China. Hierarchical multiple regression analysis was used to test the hypotheses. Findings Findings suggest that AI service failure induces schadenfreude toward the organization among employees with low perceived insider status, which then leads to procrastination behavior; however, it triggers sympathy toward the organization among employees with high perceived insider status, which further results in proactive customer service performance (PCSP). Practical implications Their work offers practical insights for tourism and hospitality companies on promoting PCSP and reducing procrastination behaviors among service employees in response to AI service failures. Originality/value By incorporating perceived insider status as a moderator, and examining the mediating roles of schadenfreude and sympathy toward the organization, this research enhances the theoretical understanding of AI service failure and its consequences from the employee perspective.