Unethical behavior erodes trust, and also negatively affects cooperation in organizations.

Against this background, the current study develops a research model where TiO mediates the impact of ETL on absenteeism, social loafing behavior, and service recovery performance (SRP). That is, our paper assesses (a) the impact of ETL on TiO, absenteeism, social loafing behavior, and SRP; (b) the effect of TiO on absenteeism, social loafing behavior, and SRP; and (c) TiO as a mediator in the aforementioned linkages.

SRP, which denotes “…frontline service employees’ perceptions of their own abilities and actions to resolve a service failure to the satisfaction of the customer” (Babakus et al., 2003, p. 274), is considered one of the performance outcomes of ETL and TiO. This is important because SRP is an important tool to convert aggrieved customers into a state of satisfaction and a valuable source of positive word-of-mouth communication (Babakus et al., 2003). Absenteeism is one of the nonattendance behaviors eroding service workers’ morale and hindering effective service delivery (Chang et al., 2020, Ozturk and Karatepe, 2019). Social loafing behavior, which is defined as “… the tendency for individuals to expend less effort when working collectively than when working individually” (Karau and Williams, 1993, p. 681), is a non-role performance outcome. Employees are more inclined to exhibit social loafing behavior as a result of their dissatisfaction with managerial practices in the organization (Luo et al., 2013).

The present study seeks to address at least three gaps by developing and empirically testing a research model of ETL and employee reactions. First, hospitality managerial or non-managerial employees often exhibit unethical behaviors (Teng et al., 2020). Giving unfair treatment to customers, overcharging customers, providing misleading information, engaging in food fraud, and showing service sabotage are among these behaviors (Dimitriou and Schwepker, 2019, Schwepker and Dimitriou, 2021, Yan et al., 2021). ETL which enables leaders to create an environment where employees are expected to display appropriate behavior can be a remedy to the prevention of said behaviors. In such an environment, leaders do not only emphasize more directive and normative behavior but also cares for their followers, shows integrity, and serves the good of the whole (Van Dierendonck, 2011). It has been reported that ETL mitigates hotel employees’ ethical ambiguity (Schwepker and Dimitriou, 2021). Though ETL has been linked to several behavioral consequences such as organizational citizenship behavior, counterproductive work behavior, and task performance, Ng and Feldman’s (2015) and Bedi et al. (2016) meta-analytic studies as well as empirical investigations in the extant literature do not delineate any evidence regarding the association between ETL and three critical employee outcomes such as absenteeism, social loafing behavior, and SRP.

The abovementioned gap is apparent in the current hospitality and tourism research, which delineates empirical studies about ETL (e.g., Dimitriou and Schwepker, 2019; Garba et al., 2018; Wang and Xu, 2021). Such void has also been denoted in Myung’s (2018) review. Lack of evidence regarding the impact of ETL on employees’ performance and non-role performance outcomes and absenteeism is surprising because the customer service experience is highly influenced by the ethical values and CCEs’ behaviors (Dimitriou and Schwepker, 2019, Yesiltas and Tuna, 2018). With this realization, the current paper tests absenteeism, social loafing behavior, and SRP as the three critical outcomes of ETL (e.g., Dai et al., 2020; Hewagama et al., 2019; Liden et al., 2004). In a workplace where hotel managers have begun to pay particular attention to employees’ ethical behaviors and beliefs (Teng and Cheng, 2021), testing the abovementioned relationships is relevant and significant.

Second, recent studies investigated the mediating role of trust in leader (TIL) in the association between ETL and behavioral consequences (e.g., Javed et al., 2018; Mo and Shi, 2017; Mary and Ozturen, 2019). To the best of authors’ knowledge, there is only one empirical paper that has examined the direct effect of ETL on TiO so far. Specifically, Xu et al. (2016) disclosed that TiO partly mediated the influence of ETL on procedural and distributive justice. As argued by Xu et al. (2016), ethical leaders’ actions should provide a base for fostering TiO if they are the unique moral agents of the company. In addition, Wood et al. (2021) indicated that corporate social responsibility completely mediated the association between ETL and organizational trust. Considering the abovementioned dearth of evidence, this paper uses TiO as the mediating construct relating ETL to absenteeism, social loafing behavior, and SRP.

Third, the relevant literature delineates a number of leaderships styles such as servant, authentic, transformational, empathetic and engaging leadership (Gui et al., 2020, Kaya and Karatepe, 2020, Kock et al., 2019, Schaufeli, 2021). Servant and authentic leadership are among the promising leadership styles (Brownell, 2010, Kaya and Karatepe, 2020). However, we focus on ETL and its consequences in a country, which has been suffering from unethical practices for years. Specifically, it is well-documented that the global hospitality industry is beset with a number of unethical practices such as service sabotage, sexual harassment, and over charging (Dimitriou and Schwepker, 2019, Teng et al., 2020). As a developing sub-Saharan African country, Nigeria is plagued with a number of problems such as corruption and political instability (Karatepe and Magaji, 2008). This is also evident in the corruption perception index (Transparency International, 2021). As Marquette (2012) states, “…regardless of religion, people who live in highly corrupt countries tend to condemn corruption. However, they also may feel that their own corrupt behavior is justified given the systemic nature of the corruption.” (p. 15). Accordingly, it is of great importance to ascertaining the potential outcomes of ETL in a global hospitality market environment where there are unethical practices, and in a country (i.e., Nigeria) where corruption is one of the major problems facing the society. By doing so, the findings of our paper would provide a number of implications how ETL can be injected in the company and TiO can be established. In short, our paper enhances current knowledge by assessing the previously mentioned linkages via data collected from hotel CCEs in Nigeria.