Integrating Artificial Intelligence (AI) into service sectors is increasingly prevalent, yet the effects of employee-AI collaboration on service innovation fail to reach a consensus. To bridge this research gap, we conducted two complementary studies by delineating three distinct types of AI in service: mechanical AI for standardization, thinking AI for personalization, and feeling AI for relationalization. The first study, an exploratory experiment with 214 credit card salespeople, examined the impact of employee-AI collaboration on employee innovation. Compared to a no-AI control condition, mechanical AI was found to significantly hinder employee innovation, while thinking AI and feeling AI significantly enhanced innovation. The second study, a confirmatory survey of 246 employees across business and service sectors, integrated role identity theory and social cognitive theory to further uncover the mechanisms and boundary conditions underlying the discovered effects from the first study. Results revealed that mechanical AI undermines innovation through identity deterioration, whereas thinking and feeling AI promote innovation via identity reinforcement. Furthermore, employees’ occupational self-efficacy was shown to significantly strengthen the link between mechanical AI and identity deterioration, and weaken the relationship between thinking AI and identity reinforcement. This study advances research on employee-AI collaboration by elucidating the nuanced effects of distinct types of AI on employee innovation. It also offers practical suggestions for human-centered AI implementation by prioritizing thinking and feeling AI for innovation-driven tasks while limiting mechanical AI to standardized operations, and tailoring AI implementation strategies based on employees’ self-efficacy levels.
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