Customer complaints trigger employees’ unethical behaviors: the roles of insomnia and moral disengagement

Purpose Previous studies argued that customer complaints can improve service quality and employee performance. This study challenges this view by distinguishing between unreasonable complaints and service failure complaints and finds that both can prompt unethical behavior. This study aims to investigate the psychological process mechanisms and identify strategies that can reduce the negative effect of customer complaints on employee behavior. Design/methodology/approach The authors used a mixed-methods design involving inductive thematic analysis of interviews with 45 employees and a four-wave survey of 311 employees from a Chinese hotel chain. The authors conducted structural equation modeling to test the hypothesized model. Findings Results indicate that unreasonable complaints and service failure complaints increase unethical behavior through insomnia and moral disengagement, but the indirect effect of unreasonable complaints is stronger. Conscientiousness amplifies the indirect effect only for unreasonable complaints, and training duration weakens the impact of insomnia on moral disengagement and unethical behavior. Practical implications This study provides valuable insights into mitigating the negative effects of different types of customer complaints. It underscores the need to support highly conscientious employees and highlights the protective role of adequate training in preserving ethical behavior. Originality/value Drawing on resource depletion and moral disengagement theories, the authors challenge the dominant view that customer complaints are beneficial, revealing their potential to foster unethical behavior. It further questions the traditionally protective role of conscientiousness, showing that it exacerbates insomnia and moral disengagement in response to unreasonable complaints. By distinguishing complaint types and uncovering dual mediating and moderating mechanisms, this study extends current understanding of how service interactions shape employee ethics.