THE DUAL ROLE OF PHYSICAL FEATURES OF SERVICE QUALITY TO
CUSTOMERS AND EMPLOYEES SATISFACTION
1. Introduction
It is widely acceptable that when a firm knows how a service will be evaluated by the
customers it shall be able to influence their perceptions to the desirable direction. This need
becomes more imperative today as the global financial crisis makes the clients satisfaction
and their loyalty imperative for every company. On the other hand, in the current economic
conjuncture, the clients become stricter and more demanding; this makes it even more
difficult to satisfy them. Moreover, the financial crisis leads to cuts in the workers wages and
to an employment insecurity thus affecting to a great extent their work satisfaction.
In this context, the paper aims to present a coherent framework on the relationship among
service quality features (interactive and physical), customer satisfaction and employee job
satisfaction. The setting for this empirical study was the passenger port industry of the
Piraeus port (OLP) (Greece). The sample consisted of 168 OLP employees.
2. Conceptual framework and hypotheses
2.1 Service quality and customer satisfaction
Some researchers consider that service quality and customer satisfaction are
synonymous, as it has been found that there is a high degree of correlation between
them (Oliva et al., 1992). Others have found notable distinctions between customer
satisfaction and service quality (Bitner & Hubbert, 1994; Sureshchandar et al., 2002).
Different opinions where also expressed about the antecedents to service quality and customer
satisfaction. Kotler and Levy (1969) reported that customer satisfaction is primarily
connected with the concept of value and price, while service quality is related to
customer needs and expectations. However, more recent research has illustrated an
opposite position, where service quality leads to customer satisfaction. In this case,
service quality is regarded as the independent variable and customer satisfaction is the
dependent variable (Jamal & Naser, 2009; Parker & Mathews, 2001; Ting, 2004).
Hence, the first hypothesis is:
H1: Service-quality features are directly and positively related to satisfaction with
the service provided.
2.2. Service Quality Features
Α number of researchers developed theoretical or mathematical models in order to
interpret and measure service quality. The most widely acknowledged models of academics
and practitioners that were applied in service industries are those of Grönroos (1984, 1990)
and Parasuraman et al. (1985). Grönroos (2001) model highlights the role of physical (what
the business offers) and interactive features of service quality (how the business offers it).
Parasuraman et al. (1988) identify five main service quality dimensions (reliability,
responsiveness, empathy, tangibles and assurance) and create the SERVQUAL scale. In spite
of its high recognition by practitioners and theoreticians, the SERVQUAL was questioned
and raised theoretical and operational criticisms. Some of them refer to the number, the
contextual stability and the interrelationship of its dimensions (Brown et al. 2002; Engelland
et al., 2000).
It is generally accepted that service quality is a multi-construct but there is a
disagreement about how best to conceptualize and operationalize this construct
(Parasuraman et al., 1988). Finn (2004, p.244-245) highlights that “the five
SERVQUAL dimensions are never all distinct; rather there is a single consistent
distinction between a tangibles dimension and an intangibles dimension”.
Pantouvakis et al. (2010) examined the applicability of the SERVQUAL instrument
in the passenger port industry and concluded that the two-factor model seems more
applicable. They also found that the physical, rather than the interactive, features of
services are more important to overall satisfaction. Another survey by Nadir and
Hussain (2005) assessed the hospitality industry in North Cyprus. Their results
supported the concept that service quality consists of two dimensions (tangibles and
intangibles). Previous studies in the tourist field have led to the same conclusion,
that the service quality has two dimensions (Ekinci et al., 2003; Karatepe and Avci,
2002; Oberoi and Hales, 1990). The use of a two-factor structure (tangibles and
intangibles) is also recommended by Reimer and Kuehn (2005), who tested their
model in two service industries (retail banking and restaurants). The interactive
features of service quality “relates to the nature of interaction between the service firm and
its customers and the process by which the core service is delivered” (Bell et al., 2005, p.
172). On the other hand, the physical features of service quality (servicescape) are
comprised of the appearance of the facilities, the equipment, the personnel and the
communication material.
A different opinion was expressed by Bateson (1995), who argued that the
physical elements of an organization form behaviors on the path to the service
encounter. According to Nguyen (2006), servicescape should consider two types of
needs: operations and marketing needs. Operations are important to improve
employee performance, while marketing positively (or negatively) influences
customer beliefs. Hence, the environment affects the interactive features of a service
in two ways: it supports the employees by providing better services and influences
customers by creating the expectation of a high-quality service. Bitner (1992) also
supported the concept that employee and customer responses to the firm environment
influence the social interaction between and among them. Consequently, the second
hypothesis is:
H2: Perceptions of the interactive features of service quality influence the perception
of customer satisfaction, both directly and indirectly, through the physical features
of service quality.
2.3. Employee job satisfaction and service quality
It has been supported that employee job satisfaction has an important
influence on customer satisfaction, as satisfied employees tend to be more
productive, provide better services to customers, and hence, can significantly
enhance business profitability. It is very difficult dissatisfied employees to deliver services
that satisfy their customers (Rogers et al., 1994). Vilares and Cohelo (2000) proposed a
reformulation of the ECSI model, establishing that perceived employee satisfaction, loyalty,
and commitment have an important impact on perceived product quality and perceived
service quality. Apart from the aforementioned studies, there are other empirical studies that
have tested the relationship between employee job satisfaction and customer service quality to
service businesses (Gil et al., 2008; Schlesinger and Zornitsky, 1991).
Nonetheless, it should be pointed out that some studies claim that the measure of
customer satisfaction be based exclusively on the interactive quality, as employees
cannot affect customer satisfaction in regard to physical quality, which is determined
by the administration and budget. More specifically, Snipes et al. (2005) suggested that
some job satisfaction facets, such as satisfaction with customers, satisfaction with benefits and
satisfaction with the work itself, may have a larger effect on service quality than others. Their
study focused on items that represented the employee-related aspects of service quality.
Gazzoli et al. (2010) used two samples (restaurant contact employees and their customers) to
determine the effects of empowerment and job satisfaction on customer perception of service
quality. The physical environment quality dimension was discarded from service quality
measurement, because they supported that employees have little or no control over this
dimension and its sub-dimensions. Therefore, the following hypothesis was formed:
H3: Job satisfaction has a significant positive effect on the interactive features of
service quality
As has already been mentioned, researchers have noticed that the physical environment plays
an important role in the customer evaluations of a provided service (Baker et al., 1988). The
physical features of service quality do not only influence customers, they also influence
employees. Bitner (1992) emphasized the impact of physical surroundings on the behaviors of
both employees and customers. Parish et al. (2008) noticed that as the servicescape for
customers is part of their consumption experience, the working environment is part of the
employee experience. Other previous studies on the cognitive field of organizational behavior
support the influence that a physical setting may have on employee satisfaction, productivity
and motivation (Davis 1984; Sundstrom and Sundstrom 1986; Wineman 1986). As such,
Hypothesis H4 is:
H4: Physical features of service quality have a significant positive effect on
employee job satisfaction
A substantial body of research confirms the positive relationship between employee
job satisfaction and customer satisfaction. More specifically, this assumption is
supported by previous empirical findings in many different sectors, like insurance
(Schlesinger and Zornitsky, 1991), financial services (Ryan et al., 1996), hospitality
(Bernhardt et al., 2000; Chi and Gursoy, 2009), restaurants (Koys, 2001) security
(Schmit and Allscheid, 1995), and retailing (Wiley, 1991). These observations are explored in
Hypothesis H5.
H5: Employee job satisfaction has a significant positive effect on customer
satisfaction
Based on the above hypotheses, the following conceptual framework is formed (Figure I).
Customer
satisfaction
Employee job
satisfaction
Physical quality
Interactive quality
Figure I: Conceptual framework of the study
3. METHODOLOGICAL FRAME
3.1. Sample
The setting for this empirical study is the passenger port industry of Piraeus Port (OLP)
(Greece). OLP is the largest passenger port in Europe and one of the largest in the
world. The sample of the current survey consisted of 168 OLP employees, which
accounts for 15.6% of the total population. In line with Ramseook-Munhurrun et al. (2009)
and Vella and Gountas (2009), this research adopts review that it frequently offers service
perception of employees and customers tend to merge. Along with the questionnaire, a
cover letter was sent to all sample members explaining the purpose of this academic study.
Participants were assured of total confidentiality and the preservation of anonymity.
Employees were asked to answer the complete set of questions representing the model
described previously (job satisfaction, customer satisfaction and service quality). The selfadministrated questionnaire also included a series of questions related to the
demographic characteristics. The proportions of male and female respondents were almost
equal.
3.2. Measures
The survey instrument consisted of 12 questions used to measure service quality for
directly measuring the physical features (8 items) and interactive (4 items) of a service, based
on Nordic conceptualization. The instrument was based on a previous measurement tool
developed by Pantouvakis et al. (2010), considered to be appropriate for measuring
service quality in the services industry. The final instrument was highly consistent
(Cronbach’s alpha equal to 0.92). Customer satisfaction was measured with seven
items. The reliability for this construct was 0.90. The measurement of job
satisfaction was based on a Job Satisfaction Survey (JSS) instrument (Spector, 1985).
The reliability of the construct was 0.90. All the questions were answered on a
7-point psychometric Likert scale (anchored on 1= “strongly disagree” through 7=
“strongly agree”).
4. Results and discussion
Following the descriptive analysis of the data, an exploratory factor analysis
(EFA) was carried out to evaluate the pattern of the relationship within the data for
the service quality instrument. The factor analysis was conducted using the method
of principal components analysis to extract the factors. A varimax rotation was used
to improve the interpretation. Prior to feeding the data to the EFA, it was confirmed
that the assumptions of normality, linearity, and homoskedasticity were not violated.
In addition, the data were tested using the Kaiser-Meyer-Olkin index (sampling
adequacy equal to 0.893 for employee perception and 0.875 for customer perception)
and the Bartlett test of sphericity (rendered highly significant results, p=0.000). The
results of both of these tests were considered satisfactory (Hair et al., 2006). Item 8
which is referred to parking services, presented multifactor loadings and was ignored
for the rest of the analysis. As illustrated in Appendix I, EFA revealed two factors.
None had eigenvalues less than one. The factors arrived at explained 67.7 percent of
the variance, a satisfactory result in the context of social science research (Hair et
al., 2006). According to OLP employees, customers seemed to evaluate the quality of
the services they received by taking into consideration the physical features (factor
one; what the business offers) and the interactive (factor two; how the business
offers it) of service quality These findings are not in line with the five-dimensional
structure of SERVQUAL, presenting an alternative conceptualization of service
quality.
A confirmatory factor analysis (CFA) followed. The AMOS software (Version 5) was
used. Results of the CFA analyses indicated a reasonable fit of the two-factor model
of service quality. It revealed a good fit to the data: x 2 =2.47, p=0.000; CFI=0.95;
TLI=0.93; RMSEA=0.09; RMR=0.12 and AIC=150.9. To test the hypothesized
model, a path analysis was performed. As illustrated in Appendix II, the results
indicate that interactive (t-value=0.52, p=0.000) and physical features (t-value=0.26,
p=0.000) are important predictor factors of customer satisfaction. Hypothesis 1 is
therefore supported. These findings are consistent with previous studies ( Ekinci et
al., 2003; Pantouvakis et al., 2010; Reimer and Kuehn, 2005).
The interactive features were found to influence the perception of customer
satisfaction directly and indirectly through physical features (t-value=0.62, p=0.000),
thus supporting Hypothesis 2. Hypothesis 3 contends that employee job satisfaction
is positively related to interactive quality. This hypothesis is supported at the 0.000
level (t-value=0.37). Physical features were found to directly and significantly
influence employee job satisfaction (t-value=0.42) at the 0.000 level. Finally, job
satisfaction was found to be an important predictor factor of customer satisfaction (t value=0.24, p=0.000).
5. Conclusions
The objective of this study was to empirically test a coherent framework,
referring to the relationship among service quality features, job satisfaction, and
customer satisfaction. Firstly, findings confirm the two-factor model of service quality
(physical and interactive features), thus confirming the findings of previous studies in the
service sector. In addition, it verified the direct and indirect effect of the physical features on
customer satisfaction. This means that the physical features manipulate behaviors before the
service experience, and that negative perceptions of physical features require a higher level of
interactive features to achieve the same level of customer satisfaction. Thus, managers who
wish to improve customer satisfaction should pay sufficient attention to both the physical and
interactive features of service quality, laying particular emphasis on the physical environment,
which affects customer satisfaction directly and indirectly.
Moreover, this research adds to the literature by exploring the role of the physical and
interactive features in employee job satisfaction. Although the relationship between service
quality and employee job satisfaction has been examined previously, no previous study has
explored the link between the features of service quality (physical and interactive) and job
satisfaction. The study showed that employee job satisfaction affects the interactive features
of service quality and that the physical features have an important impact on employee job
satisfaction. This means that employee satisfaction has a positive effect on the quality of the
services they provide to customers. On the other hand, employee satisfaction is affected by
their work environment. This conclusion stresses the importance of servicescape, since it
affects the customer's satisfaction, both directly and indirectly, through employee job
satisfaction. Therefore, managers should lay particular emphasis on the environment, as it
improves employee performance and satisfies marketing needs.
As in any research survey, this study has certain limitations that should be taken into
consideration when interpreting the results. First and foremost, the study was based on data
from a single sector; as a result, a verification of the findings in other industries is clearly
desirable. Secondly, it was limited to employee perceptions. It is preferable to examine
the relationship of the model on dyadic data (e.g., by asking employees and
customers to rate customer satisfaction and service quality).
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Appendix I: Exploratory factor analysis of service quality
Items
Convenience
Sufficiency
equipment
Cleanliness
Accessibility
Safety
Cost of services
Lightness
Courtesy
Promptness
Time of response
Helpfulness
Factor
loadings
1
2
0.782
0.779
0.770
0.752
0.734
0.721
0.706
0.876
0.870
0.815
0.648
Note: Empty cells indicate factor loadings < 0.40; all factor loadings statistically
significant, p<0.01
Appendix II: A Path Diagram of Structural Estimates of Proposed Model
nature of
work
CS1
CS2
CS3
CS4
CS5
CS6
supervision
CS7
pro motion
Convenience
Sufficiency
equip ment
Customer
satisfaction
operating
procedures
Employee job
satisfaction
contingent
rewards
Cleanliness
pay
Access ibility
Physical quality
Interactive quality
communication
Safety
co-workers
Cost of
services
Lightness
Courtesy
Promptness
Time of
response
Goodness of Fit Measures:
Chi-square =1.870, df=280
GFI=0.82;AGFI=0.77; CFI=0.92; RMR=0.12
Helpfulness