Measuring service fairness and its impact on service quality and satisfaction: a study of Indian Banking Services
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ORIGINAL ARTICLE
Measuring service fairness and its impact on service quality and satisfaction: a study of Indian Banking Services Kedar Bhatt1 Revised: 20 January 2020 © Springer Nature Limited 2020
Abstract As very few studies have investigated banking services from fairness perspective and none of the studies have attempted to measure service fairness in Indian retail banking services context, the paper seeks to investigate service fairness in Indian retail banking services context. It attempts to validate the existing four-dimensional service fairness scale and investigates its applicability in the retail banking industry. The conceptual model depicting the relationship between service fairness, service quality and customer satisfaction was tested using SEM. The results established reliability and validity of the scale and the impact of service fairness on service quality and customer satisfaction. The impact of individual fairness dimensions on these two customer evaluation variables is also studied. The paper discusses important implications of the findings and presents valuable insights for the practitioners as well as academia. Keywords Service fairness · Customer satisfaction · Service quality · FAIRSERV · Retail banking · Structural equation modeling
Introduction With the growth in competition and customers’ expectations in Indian retail banking industry, banks are continuously searching ways to attract, satisfy and retain customers. Banks have discovered that lasting and competitive advantage in businesses can be realized through retention of customers, a strategy that may not be easily copied by their competitors (Kaur and Arora 2019). Increasing investment in IT-enabled services, hassle-free delivery of services and focus on customer experience are some of the measures taken by banks to answer the questions raised by changing competitive landscape. While bank administrators are focusing improving convenience and service quality to customers, it is equally important to provide just and equitable services to customers. Because service encounters involve exchange of value between service provider and customers, customers will evaluate equity of these service encounters (Carr 2007). Customers are likely to evaluate their experiences in terms of fairness, and the fairness evaluation significantly * Kedar Bhatt [email protected] 1
Shri Chimanbhai Patel Institute of Management and Research, Ahmedabad, Gujarat, India
influences their perception and overall satisfaction toward the service providers. Since delivery of banking services involves significant customer interaction and involvement, customers are likely to judge the extent of fairness in different tasks performed by bank’s staff and outcomes delivered thereby. Thus, it is important to gauge fairness perception of customers. Scholars have focused on measuring customer perception of banking services in terms of service quality only, and very few studies have investigated banking services from fairness perspective (Narteh 2016). In services,
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