Service Quality Literature Review

2.0 Introduction to Service Quality

Over the past few decades the topic of service quality has been an important focus for practitioners, researchers and managers due to its clear associations with business performance, customer satisfaction, customer loyalty and profitability.

Within the last two decades service quality has been a topic in which a great deal of research and attention has been dedicated with relation to its effect on business performance (Lehtinen and Lehtinen, 1982; Gronroos, 1982, 1984; Parasuraman et al, 1985, 1988; Cronin & Taylor, 1992; Spreng & Mackoy, 1996; Frost and Kumar, 2000). A subject matter such as this which encompasses such an impressive breadth of research is likely to bear some degree of contrary debate; service quality literature makes no exception.

2.1 Reviewing Service Quality Models

Throughout the body of literature scholars continually make reference to the original work by Parasuraman et al. (1985):

‘One of the issues which has attracted a lot of interest has been the definition and measurement of service quality in terms of customer expectations of the service they are anticipating and their subsequent perceptions of the service which materialised’ (Reynoso, and Moores, 1995, p.64).

Although this concept may seem relatively straight forward, the way in which customer responses relating to their service encounter are measured, has been adapted using service tools by a variety of different researchers. This provokes an inquiry into discovering which method is most appropriate for producing internal service quality information. Evidence from the literature emphasises the importance for businesses to generate service quality data for the purpose of business productivity, linking to increased customer satisfaction and loyalty (Bolton & Drew, 1991).

Chapter II- A Review of Current Literature

For the purpose of the literature review, the vast academic references that discuss the body of work conducted by Parasuraman, Zeithaml, and Berry (1985) will act at the starting point for exploration. They devised a tool that puts into operation the five dimensions and gaps model of service quality. In addition this was followed up in their 1988 paper with a survey tool named the SERVQUAL, in order to measure the fifth gap of ‘perceived service quality’ (Carman, 1990, p.34) . The tool is divided into five key categories and labelled according to the five dimensions of service quality determined by Parasuraman et al, (1985).

Acknowledging that their independent research has identified five dimensions of service quality is important when choosing to explore customer perceptions, particularly as these variables can be put into practice when delivering a new service quality initiative to customers.

Thus, it remains clear from the literature that the SERVQUAL has been widely used within service industries to understand the perception of the target market, providing a measurement of the service quality of the organization.

Furthermore it supplements key aspects of the study which aims to understand the employee’s perceptions towards internal service quality with the objective of suggesting areas of improvement.

However, the model has endured criticism as some argue the fact that it would be considered unfeasible to ask customers to report on their expectations during the service encounter. Carman (1990, p.47) supports this conjecture proclaiming:

‘Can a retailer really expect a customer to complete an expectations battery when coming through the door and then complete the perception battery at the end of the service encounter? We think not and were unable to find a service setting where this was practical.’

It would be a fair assumption to anticipate that the customer would experience some increased level of pressure to give the most desired answer, thus resulting in bias results.

Chapter II- A Review of Current Literature

Acknowledging that the plan for research is to be conducted within in a retail store, it would have to be negotiated that customers could be interviewed before they experience the newly devised service quality initiative for results to be totally accurate. However, this may be considered impractical in a busy retail service setting and as a result may act as a limitation.

Nevertheless Carman (1990, p.48) provides a solution to the dilemma as he suggests that data which relates to the perception expectation difference be answered ‘directly’ rather than to ask questions about them separately’. He further elaborates that this method is particularly useful when performed in retail settings ‘where norms for expectations are well formulated in the respondent’s mind from past experience with similar services’

This method is important to keep in perspective as the plans for research are to be conducted in a well known mobile phone retailer. There is a possibility that research participants will have past experience with other mobile phone suppliers and will already have substantial expectations of service quality concerning this environment.

On the grounds that research performed by Parasuraman et al (1985) was conducted in four different service sectors it is expected that this service tool will successfully act as a template to highlight areas of focus for companies in order to attract and retain customers.

Nonetheless, a crucial point to illustrate here is that because the research was conducted twenty one years ago in only four service sectors this questions validity of generic application of service quality dimensions across all service sectors:

‘…it may be more appropriate as a next step to do more replication and testing of the SERVQUAL dimensions and measures before accepting it as a valid generic measure of perceived service quality that can be used in any retailing or service situation.’ (Carman, 1990, p.34)

As a result this would imply that any future research conducted into what has the most impact on customer perceptions may need to delve further to discover if there are other new variables which prove more significant.

Chapter II- A Review of Current Literature

This argument is supported by Woo and Ennew (2005) who also found that in business service markets the dimensions were entirely dissimilar. Thus, what may have constituted as significant twenty one years ago may not be entirely relevant with today’s customers.

2.2 Service Quality and Employees

Service quality literature is predominantly concerned with the customer’s perspective; there is a scarcity in the amount of research concerning the staff’s perspective:

‘…there is something of a paucity of published research on the support staff’s perspective’ (Reynoso, and Moores 1995, p.65).

What is significant here is that this perspective continues to become a reoccurring trend within the literature regarding the service encounter, dismissing the many discussions that have emphasized the importance of the employee or ‘internal customer’ ( Berry, 1984; Conduit and Mavondo, 2001; Grönroos,1985; Rosenbluth, 1991).

This could imply that as more and more business strive to hit targets and pressure increases as a result of ‘customers becoming more sophisticated, they become less willing to accept poor quality goods and services’ (Woodruffe, 2003, p.290). Thus, employers may fail to recognise the significance of striving to ensure that their staff’ perception of service quality corresponds with the customers they are aiming to satisfy. Unquestionably, this is cause for further exploration. Reynoso and Moores (1995, p.65) citing Stershic (1990) makes a valuable contribution to this debate, proposing that knowledge of the employee perspective leads to increased customer content with the service:

‘As obvious as it may seem to recognise employees as the critical link in delivering service quality and customer satisfaction, rarely are they the focus of such research. Obtaining and understanding the employee perspective is a critical tool in managing customer satisfaction’.

Chapter II- A Review of Current Literature

Subsequently, this suggests a need for further investigation, particularly if businesses wish to ensure high levels of service quality, and ultimately increased customer satisfaction. This concept is particularly essential for management to be aware of as it encourages them to devise some method of engaging with their employees, accepting and interpreting their staff’s attitudes and objectives in order to improve performance.

Furthermore, Oliva and Sterman, (2001, p.900) emphasises the importance of ensuring that employee’s perspectives are understood:

‘…each agent involved in the service-delivery process- employees and customers- are assumed to have an internal standard for the service level that ought to be delivered’.

This statement supports the previously mentioned concept that customers use past experiences to formulate expectations, which has been mentioned previously by various practitioners (See Bolton and Drew, 1991 for examples). In addition it emphasises the need to ensure that employees are aware of what is expected. Therefore a cause has been identified in order to investigate to what extend the internal service level of the staff corresponds with the companies service quality objectives.

Validity of this supposition is questionable; there lacks confirmation which confirms this is truly representative of every employee in each service setting. Suppose only some majority of employees have a pre-conceived notion of what is expected in order to perform the service quality level desired by the company. This concept could be further developed with an exploration as to how customer feedback for example, could affect the proposed internal standard of service the employee holds. Threat of decreased pay, lost incentives, coupled with a poor handling of service quality performance data could drastically affect their service performance, jeopardising customer satisfaction.

Chapter II- A Review of Current Literature

2.3 Employees and Internal Service Quality Information

The literature suggests that employees will endure more pressure and develop greater loyalty to the organization if they perceive that they deliver a high- quality service (Schneider, 1991; Schneider et al. 1980). Moreover, Oliva and Sterman (2001, p.900) states that ‘when employees perceive quality is low, the average duration of employment falls’.

This reemphasises the importance of how service quality information is used internally. What you can deduce from this is that if results from customer feedback are distributed in the wrong way, or has validation concerns this could ruin employee performance, lower morale and in worst case scenario cause them to terminate their employment. This draws attention to the idea of treating employees as customers, uncovering their perceptions and responding to them correctly for the benefit of service quality.