Job Satisfaction

Topics: Human resource management, Human resources, Performance appraisal Pages: 19 (5406 words) Published: January 25, 2013

Chapter – 2

Literature Review


esearch has indicated that service quality has been increasingly recognized as a critical factor in the success of any business

(Parasuraman et al., 1988) and the banking sector in this case is not exceptional. Service quality has been widely used to evaluate the performance of banking services (Cowling and Newman, 1995). The banks understand that customers will be loyal if they receive greater value than from competitors (Dawes and Swailes, 1999) and on the other hand, banks can earn high profits if they are able to position themselves better than their competitors within a specific market (Davies et al., 1995). Therefore, banks need focus on service quality as a core competitive strategy (Chaoprasert and Elsey, 2004). Moreover, banks all over the world offer similar kinds of services, and try to quickly match their competitors’ innovations. It can be noted that customers can perceive differences in the quality of service (Chaoprasert and Elsey, 2004). Moreover, customers evaluate banks’ performance mainly on the basis of their personal contact and interaction (Gronroos, 1990). Defining service quality and its components in a form that is actionable in the workplace is an important endeavor that any business company cannot take lightly. Moreover, many scholars agree that service quality can be decomposed into two major dimensions (Gronroos, 1984; Lehtinen and Lehtinen, 1982). The first is referred to by Zeithaml et al. (1985) as “outcome quality” and the second by Gronroos (1984) as “technical quality”. However, the first dimension is concerned with what the service delivers and on the other hand; the second dimension is concerned with how the service is delivered: the


Chapter – 2

Literature Review

process that the customer went through to get to the outcome of the service. The topic of measuring service quality has been studied extensively in the past15 years. The study of McCleary and Weaver (1982) indicated that good service is defined on the basis of identification of measurement behaviours that are important to customers. Zemke and Albrecht (1985) suggested that service plays an important role in defining a restaurant’s competitive strategies and identified systems and strategies for managing service. Both the service management and the marketing literatures suggest that there is strong theoretical underpinning among customer satisfaction, customer loyalty, and profitability (Hollowell, 1996). The study of Newman and Cowling (1996) reports that two British banks used the SERVQUAL model and this model improved quality of service, as well as both banks enjoying substantial increases in profit. Moreover, Zeithaml (2000) also found evidence about the influences of service quality on profits and Heskett et al. (1997) argued that a “direct and strong” relationship exists among service quality, customer satisfaction and profitability.Vimi and Mohd (2008) undertook a study of the determinants of performance in the Indian retail banking industry based on perception of customer satisfaction. The finding of the study reinforces that customer satisfaction is linked with performance of the banks. Berry (1980) along with Booms and Bitner (1981) argue that, due to intangible nature of services, customer use elements associated with the physical environment when evaluating service quality. Levitt (1981) proposes that customers use appearances to make judgements about realities. Hostage (1975) believes that a service firm’s contact personnel comprise the major determinants of service quality, while Lewis and Booms (1983) propose that service quality resides in the ability of the service firm to satisfy its customer needs i.e. customer satisfaction. Fisk et al., (1993) in tracking the extensive literature on service quality, stated that “The single most researched area in services marketing to date is service quality. The interest in

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