Turning adversity into opportunity: Managerial interventions and employee responses to observed customer mistreatment

Customer mistreatment is a pervasive challenge in hospitality settings, affecting not only directly targeted employees but also those who witness encounters. Prior research has conceptualized observed customer mistreatment (OCM) through stress and deontic justice lenses, centering on observers’ withdrawal or interpersonal reactions. We shift this perspective by conceptualizing OCM as a service safety incident following which some observers report learning-oriented responses. Study 1 employs the critical incident technique to examine employee and manager accounts and identifies spontaneous observer learning and instances of manager-facilitated reflection. Integrating these findings abductively with cognitive appraisal theory and self-efficacy research, Study 2 tests whether a manager-led post-incident learning/debriefing intervention enhances service self-efficacy, a belief about one’s capability to handle demanding customers, and whether this belief is associated with anticipated responses in a subsequent service encounter. The intervention increased service self-efficacy, which in turn was associated with stronger intended proactive customer service behavior and lower anticipated surface acting. These findings point to the potential value of manager-led post-incident interventions after witnessed mistreatment.