<p>As organizations increasingly adopt service-sales ambidexterity (SSA) to enhance performance and customer satisfaction, understanding its impact on employees has become crucial. While SSA has demonstrated organizational benefits, its influence mechanisms at the individual level remain underexplored. This study employed a cross-sectional design and used purposive sampling to collect data from 379 frontline employees in the healthcare, tourism, and education sectors in China’s Pearl River Delta. Using partial least squares structural equation modeling (PLS-SEM), we examined how SSA influences employee performance through stress appraisals and regulatory focus. The findings reveal two distinct psychological pathways. When SSA is perceived as a challenge, it enhances performance by increasing motivation and proactive behavior. Conversely, when seen as a hindrance, it induces stress and role conflict, reducing performance. The positive influences of challenge stress appraisal outweigh the negative influences of hindrance stress appraisal. Moreover, employees with a promotion focus are more likely to interpret SSA as a challenge, amplifying its positive influences. In contrast, those with a prevention focus are more sensitive to risks, intensifying the negative influences of hindrance stress. The findings provide valuable insights into the complex interplay between individual psychological factors and employee performance in service-sales environments.</p>