FACTORS AFFECTING THE QUALITY OF CUSTOMER SERVICE IN …
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FACTORS AFFECTING THE QUALITY OF CUSTOMER SERVICE IN THE BANKING INDUSTRY IN KENYA: A CASE OF ECOBANK KENYA, NAIROBI REGION BY MERCY MOSE N. SALIM UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA SUMMER 2016
Transcript of FACTORS AFFECTING THE QUALITY OF CUSTOMER SERVICE IN …
FACTORS AFFECTING THE QUALITY OF CUSTOMER
SERVICE IN THE BANKING INDUSTRY IN KENYA: A
CASE OF ECOBANK KENYA, NAIROBI REGION
BY
MERCY MOSE N. SALIM
UNITED STATES INTERNATIONAL UNIVERSITY –
AFRICA
SUMMER 2016
FACTORS AFFECTING THE QUALITY OF CUSTOMER
SERVICE IN THE BANKING INDUSTRY IN KENYA: A
CASE OF ECOBANK KENYA, NAIROBI REGION
BY
MERCY MOSE N. SALIM
A Research Project Report Submitted to the Chandaria School of Business in Partial
Fulfillment of the Requirement for the Degree of Masters in Business
Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY –
AFRICA
SUMMER 2016
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STUDENT’S DECLARATION
I, the undersigned, declare that this research proposal is my original work and has not
been submitted to any other college, institution, or university for academic credit other
than United States International University – Africa, Nairobi, Kenya.
Signed:____________________________ Date:_____________________________
Mercy Mose N. Salim (ID 642941 )
This research project has been presented for examination with my approval as the
appointed supervisor.
Signed:_____________________________ Date:____________________________
Fred Newa
Signed:___________________________ Date:___________________________
Dean, Chandaria School of Business
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COPYRIGHT
All rights reserved. No part of this project report should be reproduced in any form or by
any means including photocopying, recording without prior written authorization from
the author.
Mercy Mose N. Salim © 2016
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ABSTRACT
The purpose of the study was to establish the factors that affect the quality of customer
service in the Nairobi Region Branches of Ecobank Kenya. The study specifically sought
to determine the extent to which training of staff affect the quality of customer service in
the Nairobi Region Branches of Ecobank Kenya, the extent to which staff attitude affect
the quality of customer service in the Nairobi Region Branches of Ecobank Kenya, the
effects of Ecobank Kenya’s internal processes on the quality of customer service within
its Nairobi region branches,
The study adopted a descriptive research design. The study applied stratified random
sampling technique to select the sample size of the study where the population was
grouped into stratus. From each stratum the study took a 10% sample to give a sample
size of 45 respondents. Primary data was used for the study and it was collected using a
questionnaire. A pilot test was conducted to test for validity and reliability. The study
used both personal administration and drop and pick later method to collect the data. The
quantitative data was analyzed using descriptive statistics which included frequency
distribution tables, mean and standard deviation while the qualitative data was be
analyzed in prose form. Data will be presented using tables, charts and graphs for ease of
understanding the results.
The study concluded that there was a strong positive correlation between quality of
customer service and staff training, staff attitude and internal processes. The study
established that there was a positive correlation between the quality of customer service
and the internal processes. When the influence of all the three factors, Staff training, staff
attitude and internal processes, on quality of customer service are considered together,
internal processes appears to have the highest impact.
The study recommends that Ecobank should ensures its internal processes are clearly
designed and documented to guide employees in providing quality customer service.
Considering that, a satisfied customer and employee are of important value to the
organization; it therefore, becomes the duty of the management to put in place a system
that would ultimately generate either satisfaction, or dissatisfaction from their customers
and employees. Ecobank should also re-think their customer service strategies since the
employees have a major role to play in determining, whether a customer would enjoy the
experience or turn to their competitors for better solutions.
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ACKNOWLEDGEMENT
First I want to thank God Almighty for the gift of life and provision to the achievement of
this worthy goal.
My supervisor, Fred Newa for his academic insight and guidance throughout this project
My appreciation also goes to my loving husband Thomas and our amazing children
Amanda and Alvin for their patience, support and understanding during the course and
always.
Special thanks go to the USIU- Africa community, facilities and conducive environment
which enabled my successful completion of this course.
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TABLE OF CONTENTS
STUDENT’S DECLARATION ........................................................................................ ii
COPYRIGHT ................................................................................................................... iii
ABSTRACT ...................................................................................................................... iv
ACKNOWLEDGEMENT .................................................................................................v
LIST OF TABLES ......................................................................................................... viii
CHAPTER ONE ................................................................................................................1
1.0 INTRODUCTION........................................................................................................1
1.1 Background of the Problem ........................................................................................... 1
1.2 Statement of the Problem ............................................................................................... 6
1.3 Purpose of the Study ...................................................................................................... 8
1.4 Research Questions ........................................................................................................ 8
1.5 Importance of the Study ................................................................................................. 8
1.6 Scope of the Study ....................................................................................................... 10
1.7 Definitions of Terms .................................................................................................... 10
1.8 Chapter Summary ........................................................................................................11
CHAPTER TWO .............................................................................................................12
2.0 LITERATURE REVIEW .........................................................................................12
2.1 Introduction .................................................................................................................. 12
2.2. Effects of Internal Processes on Quality of Customer Service ................................... 12
2.3 Staff Attitude and Quality of Customer Service .........................................................19
2.4. Training of Staff and Quality of Customer Service ....................................................23
2. 5 Chapter Summary ....................................................................................................... 27
CHAPTER THREE .........................................................................................................28
3.0 RESEARCH METHODOLOGY .............................................................................28
3.1 Introduction .................................................................................................................. 28
3.2 Research Design........................................................................................................... 28
3.3 Population and Sampling Design ................................................................................. 28
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3.4 Data Collection Methods ............................................................................................. 30
3.5 Research Procedures .................................................................................................... 31
3.6 Data Analysis Methods ................................................................................................ 31
3.7 Chapter Summary ........................................................................................................ 32
CHAPTER FOUR ............................................................................................................33
4.0 DATA ANALYSIS AND INTERPRETATION ......................................................33
4.1 Introduction ..................................................................................................................33
4.2 General Information .....................................................................................................33
4.3 Effects of Internal Processes on Quality of Customer Service ....................................36
4.4 Staff Attitude and Quality of Customer Service ..........................................................39
4.5 Training of Staff and Quality of Customer Service .....................................................42
4.6 Chapter Summary ........................................................................................................45
CHAPTER FIVE .............................................................................................................46
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS ..........................46
5.1 Introduction ..................................................................................................................46
5.2 Summary ......................................................................................................................46
5.3 Discussion ....................................................................................................................47
5.4 Conclusions ..................................................................................................................51
5.5 Recommendations ........................................................................................................52
REFERENCES .................................................................................................................54
APPENDICES ..................................................................................................................57
APPENDIX I: COVER LETTER ..................................................................................57
APPENDIX II: QUESTIONNAIRE ..............................................................................58
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LIST OF TABLES
Table 3.1Distribution of Sample Size ................................................................................ 30
Table 4.1 Response Rate .................................................................................................... 33
Table 4.2:Respondents Ecobank Branches ........................................................................ 34
Table 4.3 Respondents Gender .......................................................................................... 34
Table 4.4 Respondents Age ............................................................................................... 35
Table 4.5 Level of Education ............................................................................................. 35
Table 4.6 Years Worked .................................................................................................... 35
Table 4.7 Respondents Departments.................................................................................. 36
Table 4.8 Effects of Internal Processes on Quality of Customer Service .......................... 36
Table 4.9 Correlations ........................................................................................................ 37
Table 4.10 Model Summary .............................................................................................. 37
Table 4.11 Coefficient ....................................................................................................... 38
Table 4.12 model Summary ............................................................................................... 38
Table 4.13 Multiple regression .......................................................................................... 39
Table 4.14 Staff attitude and Quality of Customer service ................................................ 39
Table 4.15 Correlations ...................................................................................................... 40
Table 4.16 Model Summary .............................................................................................. 39
Table 4.17 Coefficients ...................................................................................................... 42
Table 4.18 Quality of Customer Service............................................................................ 42
Table 4.19 Training of Staff and Quality of Customer Service ......................................... 43
Table 4.20. Correlations ..................................................................................................... 44
Table 4.21. Model Summary ............................................................................................. 44
Table 4.22 Coefficients ...................................................................................................... 45
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CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Problem
Service quality and customer satisfaction are very important concepts that companies
must understand if they want to remain competitive and grow. In today’s competitive
environment delivering high quality service is the key for a sustainable competitive
advantage (Angelova and Zekiri, 2011). More companies are recognizing the importance
of satisfying and retaining customers; many businesses such as banks, insurance
companies, and other service providers realize the importance of quality customer service
and its potential to help them acquire new customers, retain existing ones and maximize
their lifetime value (Onut, Erdem and Hosver, 2011).
Customer service is the ability to identify the needs of customers and meeting those needs
beyond their expectation within the shortest possible time. Customer service varies by
product, industry and customer. It however, assume important dimension in service
delivery. This is because service firms such as banks have to retain their customers and
win new ones if they are to remain in the market (Addai-Minkah, 2011). Customer
service has evolved though the years from a simple interaction between a company’s
employees and its existing customers to a more complex interaction that involves
experiences of customers with every touch point of an organization; from retails service
delivery and branding, online presence, self-service technologies and advertising. Firms
have heavily invested in developing cutting edge customer experience strategies however
implementation has continued to fall short in emerging markets (Verhoef, Lemon,
Parasuraman, Roggeveen, Tsiros, and Schlesinger, 2009).
Businesses around the globe have embraced the concept of customer service
management, with many incorporating the notion into their mission statements (Verhoef
et al., 2009). For example, Valero Energy Corporation is committed to ensuring a positive
retail experience for customers by focusing on convenience, value and quality. Dell
computers focus on delivering the best customer experience in the markets the firm
serves, while Toyota’s mission statement is to sustain profitable growth by providing the
best customer experience and dealer support. Similarly, it has been argued that the
success of Starbucks is based on creating a distinctive customer experience for their
customer (Michelli, 2007). An IBM report also identifies customer service as a key factor
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for companies to use in building loyalty to brands, channels and services (Badgett, Boyce
and Kleinberger, 2007).
Customer service has become so vital and significant to consider especially in the
financial business sector globally (Khondaker and Mir, 2011). As the global world has
suffered from financial depression in recent years, it is essential for banks to establish a
sturdy and solid loyal customer base to weather tougher economies and more intense
competition. The practice of excellent service quality integrated with consumer products
is a powerful generator to cater to customers’ needs and engage with them. Considering
that many banks offer undifferentiated products in a rival marketplace, banks are paying
more attention to service quality in order to gain a competitive advantage. Banks that
master service quality can gain a competitive edge in terms of higher revenue, customer
loyalty and customer retention (Kumar et al., 2010).
Banks play an important and active role in the financial and economic development of a
country. An effective banking system greatly influences the growth of a country in
various sectors of the economy. Practitioners in the banking industry face a large number
of complex challenges in the global marketplace (Lau et al., 2013). As most banks offer
similar products and services, improving customer satisfaction and loyalty is the most
important factor in maintaining as well as increasing market share for these organizations.
Customer Satisfaction has become an important aspect of measuring performance,
particularly for the banking and finance industry (Khondaker and Mir, 2011). A vast
number of studies for instance Yoon and Suh (2004); Lau et al. (2013); have identified
the significance of service quality. Good service quality is generally regarded as a way to
retain existing customers and acquire new ones, reduce costs, enhance corporate image,
generate positive word-of-mouth recommendation, and improve profitability. Service
quality is regarded as a critical success factor for organizations to differentiate from
competitors (Lau et al., 2013).
In Africa, it is perceived that the bank customer of late is more knowledgeable,
demanding, analytical and aware of his rights and as such would not like to be treated
anyhow or given substandard service (Asante and Kwasi, 2012). For instance, in the
banking industry in Ghana; the intense competition in the past years due to new entrants
into the industry both local and foreign and enforcement of Bank of Ghana regulations
has demanded the need to offer high service quality to differentiate offerings in the
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market place. This is in a bid to attract and retain customers and increase customer
confidence (Amoako, 2012). According to (Moller, 2008) customers of retail banks in
Africa are clearly seeking a responsive service, with a high level of staff efficiency. This
would suggest that efforts to increase speed of processing information and customers are
likely to have an important and positive effect on customer satisfaction. Addressing this
issue through regular staff training should improve service quality. Shorter queues,
service reliability and convenient locations are also considered to be very important by
customers. For retail banks in Africa wanting to enhance customer satisfaction, these
would be key areas for improvement.
In Kenya, the level of competition and high customer expectations is fiercer in the service
industry. Kenya’s service industry is the largest contributor to its gross domestic product.
It accounts for around 63 percent of its GDP (World Bank, 2008). The banking sector in
Kenya is regulated and supervised by the Central Bank of Kenya. The sector has grown
tremendously over the years; it currently has 43 licensed commercial banks and 1
mortgage finance company. Out of the 44 financial institutions, 31 are locally owned
while 13 are foreign owned. The locally owned financial institutions comprise 3 banks
with significant shareholding by the Government and State Corporations, 27 commercial
and 1 mortgage finance institution. By 2012 the sector had 8 deposit taking microfinance
institutions, 7 representative offices of foreign banks, 108 foreign exchange bureaus and 2
credit reference bureaus (Central Bank of Kenya, 2015). Traditional ways of banking
through brick and mortar branch network have evolved to alternate channels to include
debit and credit cards, internet banking and mobile phone transactions.
Ecobank Transnational Incorporated (ETI), a public limited liability company, was
established as a bank holding company in 1985 under a private sector initiative
spearheaded by the Federation of West African Chambers of Commerce and Industry
with the support of ECOWAS. In the early 1980’s the banking industry in West Africa
was dominated by foreign and state-owned banks. There were hardly any commercial
banks in West Africa owned and managed by the African private sector. ETI was founded
with the objective of filling this vacuum (Ecobank, 2014).The report continues to state
that the Federation of West African Chambers of Commerce promoted and initiated a
project for the creation of a private regional banking institution in West Africa. In 1984,
Eco promotions S.A. was incorporated. Its founding shareholders raised the seed capital
for the feasibility studies and the promotional activities leading to the creation of ETI. In
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October 1985, ETI was incorporated with an authorized capital of US$100 million. The
initial paid up capital of US$32 million was raised from over 1,500 individuals and
institutions from West African countries.
The largest shareholder was the ECOWAS Fund for Cooperation, Compensation and
Development (ECOWAS Fund), the development finance arm of ECOWAS.
A Headquarters’ Agreement was signed with the government of Togo in 1985 which
granted ETI the status of an international organization with the rights and privileges
necessary for it to operate as a regional institution, including the status of a non-resident
financial institution.
ETI commenced operations with its first subsidiary in Togo in March 1988. Today,
Ecobank is the leading pan-African bank with operations in 36 countries across the
continent, more than any other bank in the world. It currently operates in countries in
West, Central , East and Southern Africa, namely Angola, Benin, Burkina Faso, Burundi,
Cape Verde, Cameroon, Central African Republic, Chad, Congo Brazzaville, Democratic
Republic of Congo, Côte d'Ivoire, Equatorial Guinea, Ethiopia, Gabon, Ghana, The
Gambia, Guinea, Guinea Bissau, Kenya, Liberia, Malawi, Mali, Mozambique, Niger,
Nigeria, Rwanda, Sao Tome & Principe, Senegal, Sierra Leone, South Africa, South
Sudan, Tanzania, Togo, Uganda, Zambia and Zimbabwe. The Group also has a licensed
operation in Paris and representative offices in Beijing, Dubai, Johannesburg, London and
Luanda. The Ecobank Group is a full-service bank focused on Middle Africa. It provides
wholesale, retail, investment and transactional banking services to governments, financial
institutions, multinationals, local companies, SMES and individual services are delivered
by three customer-focused business segments; Corporate Bank, Domestic Bank and
Ecobank Capital. (Ipek Kuran 2008)
Ecobank Transnational Incorporated (ETI) entered the Kenyan market in 2008 as a
strategic move in its expansion plans. The entry mode was through acquisition of 75%
stake of East Africa Building Society (EABS), making it the 43rd commercial bank in
Kenya. EABS was founded in 1959 by the Pandit family who were the single largest
shareholders. After the purchase of East African Building Society, Ecobank Transnational
Incorporated changed EABS’ name to Ecobank Kenya Limited. (MicroCapital,June
2008)
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Ecobank Kenya currently has 29 branches around the country, it offers wholesale, retail,
commercial and investment banking services to individual and corporate customers both
private and public. Ecobank Kenya recently launched its banc assurance services through
its wholly owned subsidiary called Eco Insurance Agency Limited (Ecobank Kenya,
2014). In a bid to improve the quality of customer service, the bank has restructured the
customer service department and elevated the Head of Client Engagement to report
directly to the MD and become a member of executive committee. This is to ensure that
customer service issues get a deeper consideration at top management. The number of
line managers who report directly to the head of department was increased from one to
three while customer service officers at branches have a dotted reporting line to the head
of client engagement. The bank is also investing in increasing capacity of the department
in a bid to offer efficient customer service which is core to the bank’s operations.
The increased competition in the Kenyan banking industry and the need to increase
customer satisfaction calls for quality service in order to attract and retain the current
customers thus the need for the institutions to be innovative and creative to win the
customer’s trust and loyalty (Kimando and Njogu, 2012). Ecobank Kenya has continued
to experience customer service challenges as evidenced in the confidential internal
monthly Customer Service reports. The reports indicated an increase in customer churn as
demonstrated in account closure letters and general customer attrition. Frustration due to
system malfunction was also a key dissatisfaction area and gave rise to law suits. An
online customer satisfaction survey conducted in 2015 by Ecobank Group Customer
Service team indicated lack of customer satisfaction on some services and lack of
feedback to customers. Lack of feedback to customers is an indicator of poor customer
service which would negatively impact on the customer satisfaction, customer loyalty,
and retention in organization performance.
As most banks in Kenya offer similar products and services, improving customer
satisfaction and loyalty is key. Service quality is the only way that banks can to
differentiate their offerings in the market place (Amoako, 2012). It is against this
background therefore that the study seeks to investigate the factors affecting the quality of
Customer Service at Ecobank Kenya Limited with key focus on service delivery by staff
at the branch. Despite the extensive customer service strategies employed by Ecobank
Kenya Limited
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1.2 Statement of the Problem
In today’s rapidly challenging business environment due to technological advancement
coupled with high competition within industry players and outside businesses, there is a
greater need to improve on customer experience in the banking industry. Customers are
willing to extend their loyalty to business that can offer superior value relative to the
offers by competition (Yang and Peterson, 2004). Today’s customers are sophisticated
and technology savvy, they want their service when and where they need it; they are also
spoilt for choice in terms of quality and pricing. For this reason, the pressure to meet
shareholders’ expectations, manage costs and grow profits is very high within
organizations (Chen and Quester, 2006). The modern customer expects to be treated as an
equal partner with courtesy and efficiency thus need of organization to make customers
feel the value of using its products or services is greater than the price the customer is
paying (Addai-Minkah, 2011).
Customer service is a basis which customers use for differentiating between competing
services, second only to market share (Gale, 2007). Therefore, with increasing
competition in the service industry, banks included there are need to refocus service
delivery objectives. Relative quality is a key contributor to bottom line profit
performance. Quality can only be defined by customers (Payne 2008). Despite the
extensive customer service strategies employed by Ecobank, the bank has continued to
face service delivery challenges as evidenced in internal monthly customer service reports
for Nairobi region branches which highlighted delays in transaction processing, high
churn rate, non-active accounts and long pending complaints. The customer satisfaction
survey of 2015 also pointed out the main customer pain points as lack of feedback in loan
application, indifference attitude from staff, weak product knowledge and system
downtime.
Examination of the above service data from Nairobi region branches against service
standards as set out in the customer experience policy it would appear that service
delivery may be affected by customer facing staff due to factors such as staff training and
motivation, Schneider, Gunnarson and Niles-Jolly (1994) assert that employees observe
what happens to them and around them, and draw conclusions about the organization's
priorities. Some researchers (Julian and Ramaseshan 1994) claim that since service
organization employees have face-to-face contact with customers, their work seems to
result in increased stress and strain because employees try to meet conflicting demands
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from management and customers. (Schneider and Bowen 1995) contend that management
can potentially manage employee stress by establishing an environment in which
employees' desires to give good services are made easier and encouraged.
Though service loyalty is one of the most important structures in service marketing, as a
result of its final effect on customers’ repeated purchases, in fact, those loyal customers
who purchase repeatedly have been considered as the base of any business (Caruana,
2002) Service environment created in an organization, including how the service is
delivered, is critical for the service unit's effectiveness. Furthermore, since one aspect of
service quality is the delivery, the interaction between the service deliverer and the
consumer may determine service quality for the consumer. Organizations can only
indirectly control the interaction or "service encounter" because of the simultaneous
nature of production and consumption. In order to explore the relationship between
service orientation and service quality.
Internal processes that guide execution often provide a bone of contention to the customer
facing staff between meeting the needs of customers while also adhering to set standards
and procedures that are sanction backed.
In emerging economies, the banking business has been revolutionized with the banking
business now built on the platform of quality of service. In Bangladesh, (Siddiqi, 2010)
examined the applicability of service quality of retail banking industry and found that
service quality is positively correlated with customer satisfaction; empathy had the
highest positive correlation with customer satisfaction, followed by assurance and
tangibility. In Malaysia, Lo, Osman, Ramayah and Rahim (2010) found that empathy and
assurance had the highest influence on customer satisfaction in the Malaysian retail
banking industry. In Greece, (Arasli, Smadi and Katircioglu 2005) found that reliability
had the highest impact on customer satisfaction. A number of studies have identified the
dimensions of service quality as the antecedents of customer satisfaction.
Staff responsiveness to customers needs affects quality of service and ultimately
cusyomer satisfaction. Responsiveness is the readiness to provide assistance and speedy
service to customer (Parasuraman, 1999). Responsiveness dilly-dallies the willingness of
employees to avail a service in a way that it will send a transaction slip instantly, speedy
mortgage conformation, and updating an account in a timely manner (Buteele, 1996).
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These are the difference perception of bank’s customers about dealing with machines or
employees (Munusamy , 2010).
It is against this back ground that this study seeks to examine factors affecting the quality
of customer service delivery at Ecobank Kenya Limited.
1.3 Purpose of the Study
The purpose of the study is to establish the factors that affect the quality of customer
service in the Nairobi Region Branches of Ecobank Kenya.
1.4 Research Questions
1.4.1 What are the effects of Ecobank Kenya’s internal processes and procedures on the
quality of customer service within its Nairobi region branches?
1.4.2 To what extent does staff attitude affect the quality of customer service in the
Nairobi Region Branches of Ecobank Kenya?
1.4.3 To what extent does training of staff affect the quality of customer service in the
Nairobi Region Branches of Ecobank Kenya?
1.5 Importance of the Study
1.5.1 ECOBANK Kenya Management
The study will provide the management of Ecobank Kenya with practical information on
what the factors affecting the quality of customer service within its Nairobi region are.
This study will also assist the bank in more focused implementation of customer service
strategies due to the information that will be provided. The findings of this study will
assist Ecobank Kenya employees to appreciate their interdependence and cohesion in
service delivery.
1.5.2 ECOBANK Kenya Client Engagement Department
The client engagement department will benefit from this study through the practical
findings which will assist in re-aligning the department’s objectives to effectively meet
and exceed customer’s expectations.
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1.5.3 ECOBANK Kenya Employees
Customer facing employees at the branch will find these findings useful through the
recommendations for training and process review. These will ensure they are well trained
and equipped to apply processes that are customer centric. The study will clearly indicator
the factors affecting quality of customer service which will inform branch staff behavior
change objectives.
1.5.4 ECOBANK Kenya Customers
As key stakeholders in the banking sector, customers will benefit from improved and
better service delivery due to the recommendations of this study. The advantages will
include delightful customer experiences characterized by prompt, effective and delightful
service delivery.
1.5.5 Central Bank of Kenya (CBK)
As a regulator of the banking sector in Kenya, CBK will find the results of this study
useful in terms of providing insights to policy making as appertains customer protection
and advocacy
1.5.6 Kenya Bankers Association
The study will prove useful to Kenya Bankers Association (KBA) whose mandate is to
promote the development and growth of the banking industry in Kenya by engaging the
government and the Central Bank of Kenya (CBK). The study outcome will provide a
valuable opportunity for KBA to understand the factors that affect the quality of customer
service in the banking sector even as KBA strives to support Kenyans who entrust their
financial resources with its member banks.
1.5.7 Banking Institutions
This study can provide practical understanding of factors affecting the quality of customer
service among banking institutions. This study will also provide practical information and
knowledge for management decision making in service delivery to customers as well as
indicate service bench marks.
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1.5.8 Researchers and Academicians
The findings and recommendations of this study will contribute to the body of knowledge
in the area of customer service delivery within the banking industry. Other researchers
and academicians will borrow ideas from this study as a point of reference. It will provide
a source of information for future research in the area of customer service and
recommend areas that need to be explored in this area.
1.6 Scope of the Study
This study will be carried out within the Nairobi branch network and head office of
Ecobank Kenya. The population scope will consist of both management and junior staff.
The study will be conducted between the months of June 2015 to April 2016.
In conducting this study, the foreseeable limitations include the unwillingness of
respondents to provide information for fear of sanctions by the bank. The bank will need
to see the value of the study to its performance plus confidentiality of information
provided. Another possible challenge will be how to ensure quality of information
collected. Mitigation strategies that will be employed include issuing a written
introductory letter to the management stating the value of the study to the bank, the
purpose which is academic and guaranteeing confidentially. A written authority from the
Head of Human Resources to conduct the study will be sought while quality checkers will
be employed to ensure completeness of data collected.
1.7 Definitions of Terms
1.7.1 Customer Service
Customer service is a series of activities designed to enhance the level of customer
satisfaction creating a feeling that a product or service has met the customers’
expectations (Turban et al, 2002).
1.7.2 Customer Satisfaction
It is a concept that refers to how customers perceive the performance of a product or
service in relation to their needs and expectations; delivering superior value over
competitors to the target customers (Schiffman and Kanuk, 2007)
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1.7.3 Service Quality
Service quality is a global cognitive judgment or attitude relating to a particular service;
the customer's overall impression of the relative inferiority or superiority of the
organization and its services (Fogli, 2006).
1.7.4 Customer Loyalty
Customer loyalty is the development of a positive state of mind by the customer towards
the organization (Asante and Kwasi, 2012).
1.8 Chapter Summary
This chapter provided an introduction to the area of study and a background of the
statement of the problem. It stated the main objective of study which is to investigate the
factors that affect the quality of customer service within Ecobank Kenya’s branches,
Nairobi region. The chapter further gave an introduction on the state of customer service
in Ecobank Kenya; it illustrated the existing gaps from the available information. It went
ahead to outline the purpose, importance and scope of the study.
In chapter two, the study will endeavor to conduct literature review of various sources of
information. The chapter will further explore the information available on the area of the
study. The research questions will guide the literature review chapter. Chapter three
describes the methods and procedures that were used to carry out the study. Chapter four
focuses on analysis of the results and findings of the research data. Finally, a summary of
the study, conclusions drawn and recommendations for further study have been discussed
in Chapter five.
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CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter covers the review of existing literature on the factors that affect the quality
of customer service. The chapter will be guided by the study’s objectives which are to
investigate the extent to which training of staff influence, staff attitude, internal processes
and procedures, evaluation and monitoring, staff’s knowledge of product and services
affect the quality of customer service in commercial banks. The chapter ends with a
summary.
2.2. Effects of Internal Processes on Quality of Customer Service
The quality of customer service is the key differentiator between good, bad and
indifferent companies. Good quality customer service keeps customers coming back; bad
customer service drives customers away, taking their friends, family and workmates with
them. The following subsection provides the effects of internal processes on quality of
customer service.
2.2.1 Internal Processes
Davenport (1993) defines a (business) process as a structured, measured set of activities
designed to produce a specific output for a particular customer or market. A process is
thus a specific ordering of work activities across time and space, with a beginning and an
end, and clearly defined inputs and outputs: a structure for action. They continue to argue
that Taking a process approach implies adopting the customer’s point of view and that
processes are the structure by which an organization does what is necessary to produce
value for its customers. On the other hand Hammer and Champy’s (1993) define a process
as a collection of activities that takes one or more kinds of input and creates an output that
is of value to the customer. Rummler and Brache (1995) distinguish in their definition that
clearly two types of processes, primary and support processes, depending on whether a
process is directly involved in the creation of customer value, or concerned with the
organization’s internal activities. Their works build on Porter’s value chain
13
2.2.2 Quality and Customer Service
Service quality from the provider’s perspective means the degree to which the service’s
features conform to the organization’s specifications and requirements; from the
customer’s perspective it means how well the service meets or exceeds expectations
(Fisk,004) Service quality as the subjective comparison that customers make between the
quality of the service they want to receive and what they actually get (Gefan, 2002).
An acceptable outcome is an absolute necessity for good perceived quality, but an
excellent service process creates a distinct and sustainable competitive edge”, (Gronroos,
2005 p.15) Service quality is determined by the differences between customer’s
expectation of the service’s provider’s performance and their evaluation of the services
they received (Parasuraman,1988).Service quality can be defined as the difference
between customer’s expectations for service performance prior to the service encounter
and their perceptions of the service received (Asubonteng et al,1996).
Depending on whether we are a provider or a user, we have many different ways of
defining service quality In this study, Fisk’s definition is used. A key distinction between
the provider-based and customer-based definitions of quality is that the latter definition
recognizes that for the same level of product performance, different customer will
perceive different levels of quality. Thus service quality is more appropriately termed
perceived service quality and defined as the level of service delivery that meets or
exceeds customer expectations (Fisk, 2004)
Quality creates a chain reaction with regard to loyalty and customer inclination to
establish enduring relationships with service providers. The greater the level of customer
satisfaction, the stronger the link between the provider and the customer. Satisfied
customers are loyal and form strong relationships with service organizations (Fisk, 2004).
Previous studies found that in order to determine customer’s perceptions of the overall
banking service quality, banking service product quality plays an important role (Jun and
Cai 2001). There are eight dimensions in banking service quality according to
Parasuraman (1985) and they are reliability, responsiveness, competence, courtesy,
credibility, access, communication and understanding the customer. Reliability refers to
correct service, keeping service promise, accurate records and keep promise as advertised.
14
Responsiveness refers to prompt service quickly, quick problem solving and convenient
service. Competence means ability to solve problems and knowledge to answer questions.
Courtesy is handling complaints in a friendly manner and consistently courteous.
Credibility means confidence in the bank’s service good reputation. Access includes
availability for help, ATM access, phone access, email access and account access when
abroad. Communication means clear answers, informing customer of important
information, availability of status of transactions. Understanding the customers means
personalized attention. Two additional dimensions were added with the advent of internet
banking and these are collaboration and continuous improvement (Jun and Cai, 2001).
2.2.3 Processes and Service Quality in Organizations
Gronroos (2001) argues that because of the complexity of the characteristics of most
services, their quality has to be complex too, as compared to the quality of goods. In the
case of goods, the outcome or end result of the process is transferred to the customer.
However, in services, the way employees perform their tasks, what they say, and how
they do it also influences the customer’s view of the service and their experience. Other
factors that could affect service are:
According to Caruana (2002), the attitudes of other customers consuming the service and
the atmosphere of the buyer- seller interactions can positively and negatively affect a
customer. The way the customer receives the service also influences his view of the
quality of the service, the way he experiences the simultaneous production and
consumption of the service is quality dimension. The quality of services can be classified
into two parts based on how the customer receives the service and what the customer
receives. “The WHAT and HOW”.
According to Caruana (2002), service quality is split into two terms, first the technical
quality and functional quality. Technical quality is what the customer receives and how
he receives it, the outcome of the process. Functional or process quality is how the
services encounter is taken care of and how the service provider functions.
15
Figure 1: The Service Quality Dimensions (Gronroos, 2001 P.65)
The third or additional dimension of service quality that research suggests is that of the
physical environment of the service encounter, which is the WHERE of the service
quality perception. However according to Zethami et al (2006), service quality is the
customers’ perception of the service component of a product and a critical determinant of
customer satisfaction more so, that service quality focuses specifically on dimensions of
service, and is a dimension of customer satisfaction even though the two of them tend to
be used interchangeably.
2.2.4 Impact of Processes on Quality Customer Service
An acceptable outcome is an absolute necessity for good perceived quality, but an
excellent service process creates a distinct and sustainable competitive edge”, (Gronroos,
2005 p.15) Service quality is determined by the differences between customer’s
expectation of the service’s provider’s performance and their evaluation of the services
they received (Parasuraman,1988).Service quality can be defined as the difference
between customer’s expectations for service performance prior to the service encounter
and their perceptions of the service received (Asubonteng et al,1996).
Service quality from the provider’s perspective means the degree to which the service’s
features conform to the organization’s specifications and requirements; from the
Total Quality
Image (Corporate/ Local)
Functional quality of the
service process (HOW)
Technical quality of
the outcome (WHAT)
16
customer’s perspective it means how well the service meets or exceeds expectations (R.P
Fisk,004) Service quality as the subjective comparison that customers make between the
quality of the service they want to receive and what they actually get (Gefan, 2002).
This study uses Fisk’s (2004). definition of service quality. Depending on whether we are
a provider or a user, we have many different ways of defining service quality. A key
distinction between the provider-based and customer-based definitions of quality is that
the latter definition recognizes that for the same level of product performance, different
customer will perceive different levels of quality. Thus service quality is more
appropriately termed perceived service quality and defined as the level of service delivery
that meets or exceeds customer expectations (Fisk, 2004)
Quality creates a chain reaction with regard to loyalty and customer inclination to
establish enduring relationships with service providers. The greater the level of customer
satisfaction, the stronger the link between the provider and the customer. Satisfied
customers are loyal and form strong relationships with service organizations (Fisk, 2004).
Previous studies found that in order to determine customer’s perceptions of the overall
banking service quality, banking service product quality plays an important role (Jun and
Cai 2001). There are eight dimensions in banking service quality according to
Parasuraman (1985) and they are reliability, responsiveness, competence, courtesy,
credibility, access, communication and understanding the customer. Reliability refers to
correct service, keeping service promise, accurate records and keep promise as advertised.
Responsiveness refers to prompt service quickly, quick problem solving and convenient
service. Competence means ability to solve problems and knowledge to answer questions.
Courtesy is handling complaints in a friendly manner and consistently courteous.
Credibility means confidence in the bank’s service good reputation. Access includes
availability for help, ATM access, phone access, email access and account access when
abroad. Communication means clear answers, informing customer of important
information, availability of status of transactions. Understanding the customers means
personalized attention. Two additional dimensions were added with the advent of internet
banking and these are collaboration and continuous improvement (Jun and Cai, 2001).
17
2.2.4 Relation of Service Quality to Customer Satisfaction
Service quality has a positive effect on the bottom-line of a firm and thereby on the
competitive advantages that could be gained from an improvement in the quality of
service offering, so the perceived service exceeds the service level desired by customers
(Caruana, 2002; Chumpitaz, 2004). The literature relating to service management has
argued that customer satisfaction is the result of a customers’ perception of value received
(Hallowel, 1996). Perceived value is considered a construct that captures any benefit
sacrifice discrepancy in the same way that disconfirmation does for variations between
expectation and perceived performance. As clearly explained, perceived service quality
and perceived value has approximately the same meaning.
Fisk (2004) says that three links connect the customer and provider: the service delivery
link, the customer satisfaction link and the customer–provider link. The service delivery
link represents the interactive nature of the service and is strengthened through satisfying
service encounters. The customer satisfaction link represents the connection between the
customer’s level of satisfaction and the degree of loyalty to the service provider. The
customer-provider link represents the mutually rewarding relationship between the
customer and the service provider, resulting in the customer’s commitment to that service
provider. These links connect activities that fall into three domains, or wheels,
representing the domains of the customer, the provider and the service encounter
respectively. The service quality cycle is driven by three wheels connected by three links.
When customers repeatedly enjoy satisfactory service encounters, that is, when the
encounters meet or exceed their expectations for all the service attributes, they perceive
the service quality as high and are likely to remain loyal to the service provider. Figure 2
illustrates the Service quality Cycle which is driven by three wheels connected by three
links as seen below. The term cycle is used to denote that service quality involves
important links between the service organization and the customer in a recurring series of
activities.
18
Figure 2: The service quality Cycle (R.P Fisk, 2004 p. 154)
Loyal customers provide positive word-of-mouth communications about the service
organization feel a sense of belonging and commit to relationships with the service
provider. As loyalty is further nurtured by ongoing satisfying encounters, the customer-
provider relationship becomes mutually rewarding and customers feel even more
committed to the service organization. It is then in the best customer’s best interest to
help the service provider improve its service offerings. With continual improvements, the
service offering will more closely match customer needs. The interactive nature of
services also fosters provider-customer familiarity, which in turn enables the customer to
receive a more personalized service. The cycle is complete when these process
Frontline
Commitment
to customer
Customer
Commitment
to Process
Improvement
Service
Offering
Improvements
Service Provider Wheel
Customer
Relationship
Word of
Mouth
Customer
Loyalty
Attribute and
Encounter
Satisfaction
Service Customer Wheel
Customer
Satisfaction
Overall
Service
Quality
Perception
Service Encounter Wheel
Customer Satisfaction Link
Customer
Provider
Link
Service
Delivery
Link
19
improvements lead to even better and more satisfying service encounters and overall
customer satisfaction, (Fisk, 2004).
In large service organizations, the same logic applies whereby satisfactory service
encounters lead to continued customer satisfaction and loyalty accompanied by positive
referrals. The strength of the customer-provider relationship fosters a mutual desire to
continually improve the quality of the service encounters and discourages customers from
switching to other service providers. Service quality’s critical influence on service
organization success makes it important for us to understand how the customer evaluates
it and what factors enhance perceived service quality (Fisk 2004).
2.3 Staff Attitude and Quality of Customer Service
Robbins (2003) defined attitudes as evaluative statements and they can be either favorable
or unfavorable-concerning objects, people, or events. Therefore, they reflect how one
feels about something. The favorable statements may provide positive effects regarding
the concerned object, person or event whereas unfavorable statement may provide
negative effects. An attitude is a positive or negative feeling or mental state of readiness,
learned and organized through experience that exerts specific influence on a person’s
response to people, objects and situations. This definition of attitude has certain
implications for managers. First, attitudes are learned. Second, attitudes define one’s
predispositions toward given aspects of the world. Third, attitudes provide emotional
basis of one’s interpersonal relations and identification with others. And fourth, attitudes
are organized and are closed to the core of personality. Some attitudes are persistent and
enduring; yet, like each of the psychological variables, attitudes are subject to change
(Fishbein and Ajzen, 1975; Hettiararchchi and Jayarathn, 2014).
Business environment has become very dynamic, competition continues to intensify, and
customers are increasingly sophisticated in their needs so much that to continue to be
successful, businesses have to be able to see around the corner and be fleet of foot in
order to be able to meet customer needs and most importantly to retain customers. This
requires a strong organisational culture to underpin the business strategy; this is the ways
in which employees behave and the ways in which they work. Line managers have the
responsibility to influence employee attitude and behaviour in order to build this culture
and thereby impact employee performance; and HR impact on the business must be to
20
partner line managers to acquire the skills and capabilities required to perform this role
effectively (Consult, 2013)
2.3.1. Effect of Staff Attitude in an Organization
The first factor subject to employee attitudes is engagement. Employees that have a
negative attitude toward their company are far more likely to be disengaged, fulfilling
their jobs with the least amount of work possible and at the lowest quality level. This
attitude of disengagement, disconnection and lack of concern for the company's well-
being is costly to employers by way of lost productivity. Employees with the same
competencies and skill levels are likely to be many times more productive if they have a
positive attitude toward work, and feel connected, committed and invested in the success
of the company (Gallup, 2012).
Based on their attitudes toward work, employees feel more or less committed to the job.
Those with a generally negative outlook at their work situation have no reason to feel
invested in a future with the company. They can leave at any time and might just be
waiting for the right opportunity. High employee turnover is significantly costly to
business in a number of ways, including training, hiring resources and work left undone.
By contrast, employees with positive attitudes toward the job are more likely to develop a
sense of commitment to the business and stay for the long haul, lowering turnover costs
and increasing productivity through experience, reports (Moran, 2011).
Workplace attitudes, both positive and negative, are infectious and can easily spread to
co-workers. Negative employee attitudes can have a ripple effect. Decreased trust and
goodwill toward co-worker’s harms collaboration, decreasing productivity. A negative
social environment isolates individual employees and creates incentives to avoid or leave
the job. By contrast, positive attitudes make interaction and collaboration more pleasant
and productive. The encouraging social atmosphere that results from good attitudes
creates incentives to be part of the team and gives employees a sense of belonging and
emotional investment with the success of the company (Ray, 2015).
Not all employees interact directly with customers and clients, but when they do, their
attitude is a reliable predictor of customer satisfaction. Even the employees who don't
have direct contact with clients can influence through their attitudes the level of care and
customer service. A negative attitude is likely to manifest in disengagement from
customers and lack of concern for their needs. Customers are an annoyance and an
21
inconvenience to employees with a bad attitude. On the other hand, a positive and
engaged attitude is likely to result in courtesy, emotional engagement and a real concern
for the well-being and satisfaction of the customer (Ray, 2015).
2.3.2. Effect of Staff Attitude on Quality of Customer Service
The attitudes of employees in the workplace can have a significant effect on the business
as a whole. Attitude is one of the hidden, hard-to-measure factors that ends up being
crucial to the success of a company. Whether for better or for worse, employee attitudes
tend to have a drastic impact on the productivity of a business, both directly and through
the effect on other job-related factors (Bartel, Freeman, Ichniowski and Kleiner, 2011).
Employees’ empowerment is one of the aspects that change their attitude. According to
Ellinger, Elmadag and Ellinger (2007), empowered employees have control over their
work and how the work is done. They also have a great deal of task autonomy and
identify which are desirable job characteristics that improve morale and job satisfaction.
Empowerment also enhances employee commitment towards the organization by
allowing them to make on-the-spot decisions. By empowering employees, management is
demonstrating its commitment to service quality by giving them the authority and
responsibility to deliver excellent service delivery.
A study by Pritchett (2007) established the effects of an upbeat and positive attitude in
customer service interactions. The study involved experiments and examination of case
studies. The experiment revealed that dealers, who engaged customers with a positive
attitude, earned more in tipped income. In a series of case studies, service surveys were
taken from customers that experienced a normal wait for service at counter service areas
and in receiving beverage service. Those customers who experienced a normal wait, but
received service from an upbeat and positive employee, rated the interaction better than or
equal to service received in a timely manner. It is therefore clear when customer service
employees perform their duties with a positive attitude, have the ability to affect certain
aspects of customer service interactions.
Susskind, Kacmar and Borchgrevink (2013) also sought to establish the relationship
between customer service providers’ attitudes relating to customer service and customer
satisfaction in the customer - server exchange. Results indicated that the perception of
having standards for service delivery in an organization is strongly related to line-level
employees’ perceptions of support from coworkers and supervisors. Perceived support
22
from coworkers was significantly related to service providers’ customer orientation,
whereas perceived support from supervisors showed a weaker relationship to a customer
orientation. Ultimately, service providers’ customer orientation was strongly related to
customers’ satisfaction with service.
A study by Ashill, Rod and Carruthers (2008) tested a model of behavioral job outcomes
grounded in Bagozzi’s (1992) reformulation of attitude theory. The study targeted the
Frontline employees who played a crucial role in service delivery and building
relationships with customers. Results suggest there is a significant influence of
management commitment to service quality on job attitudes, which in turn influence
customer service performance and turnover intentions. Yazdanifard et al. (2011) also
asserts that there is a strong association between employee attitudes about their jobs and
their conducts with customer service which in turn influence customer retention and more
persistent customer comments about a product or services to others. Customers who feel
they were poorly treated by employee of the organization will tell numerous people,
friends, relatives, and neighbors about their experience each of this individual, in turn,
will tell others what the dissatisfaction customer told them.
Litwin and Stringer (1968) identified organizational standards as a key influence on
individuals’ behavior in organizations and defined standards as consisting of
organizational members’ per-ceptions of organizational goals and objectives, managerial
expectations for job performance, and the implicit importance placed on those goals,
objectives, and performance demands. Because managers of service-based organizations
typically have less direct interaction with their customers than they do with their front-
line employees (Schneider & Bowen, 1993), front-line employees tend to be the direct
link between an organization’s goals and operational mission and the consumers they
serve (Grisaffe,2000). Because front-line service providers are a key element in the
service delivery process, the standards dimension presented in this article represents the
extent to which these employees believe that they are viewed as an important part of the
service delivery process (Lewis, 1989) and that standards exist to guide, direct, and
monitor the service delivery behaviors of both management and line-level employees.
Standards represent an important part of an organization’s mission as they provide
guidelines for how products or services are produced, delivered, and evaluated. Grisaffe
(2000) indicated that managerial philosophies and values influence and business
practices, which, in turn, influence employee and customer interactions and behaviors.
23
Armeli, Eisenberger, Fasolo and Lynch (1998) described this contention from a social
exchange framework (Blau, 1964), suggesting that perceptions of organizational support
are likely to be stronger when employees believe they are acting consistently with
organizational standards. Schmitand Allscheid (1995) also identified service standards as
a key part of an organization’s service climate because they positively influence service
delivery
2.4. Training of Staff and Quality of Customer Service
2.4.1 Training of Staff
Training refers to the acquisition of knowledge, skills, and competencies as a result of the
teaching of vocational or practical skills and knowledge that relate to specific useful
competencies. Training has specific goals of improving one's capability, capacity and
performance at the work place or off the place (Singh, 2012). On the other hand, customer
service is the practice of providing customers with a positive helpful experience when
they enter a business, throughout the time they stay at the business, and even after the
customer leaves, should they have additional questions or products to return (Thompson
and Kolsky, 2004). Dealing with customers involves the appreciation of the time of
customers and tolerating their behaviors. The provider must always convey to the
customer that he or she appreciates the time it takes them to do business with the
company. Respecting the customer ‘s time implies that members of an organization
should always work at peak efficiency and stay focused on the customer. Respecting the
customer ‘s time by not imposing bad or negative mood on anyone else, recognizing
regular customers, avoiding destructive remarks and showing initiative are tips to creating
challenging customers (Thompson and Kolsky, 2004).
2.4.2. Effect of Staff Training on Quality of Customer Service
Padi (2012) conducted a study on the effect of training on customer service delivery; the
study was based on a contextual analysis of a limited number of training sessions held for
staff of Barclays bank, Ghana. The study revealed that all the staff had special training
towards improving customer service delivery and majority of the bank ‘s customers
perceived its service delivery as good. The study concluded that training received by bank
staff on improving customer service delivery resulted in improving the performance of
staff which resulted in improving the performance of staff which was perceived as good
24
by the customers of the bank. It is recommended that the human resources department of
Barclays Bank Ghana Ltd should train their staff on how to meet customer expectations,
increase assertiveness, and deal with stress and how to maintain good customer service
delivery.
Dhar (2014) also examined how training of employees influence service quality. The
author analyzed the perception of training opportunities and the impact of such training
on the service provided to guests in small and medium size tourist hotels operating in
Uttarakhand, India. The findings of the study revealed a strong relationship between
employee training and the quality of services offered by employees in tourist hotels.
The relationship between various perceptions of training and its impact on service quality
may be mediated by the organizational commitment level displayed by employees.
Employees may show a dramatic improvement in the quality of services they offer to
customers if they are trained in problem solving and technical skills (Yavas and Babakus,
2010). This kind of training not only improves employee competency but also creates a
feeling of obligation for them to repay it, which takes the form of displaying a higher
level of commitment toward the organization. Employees who feel that the organization
supports them by offering them relevant training programs, provide faster and better
solutions to customer issues (Yavas and Babakus, 2010). Such beliefs about the
organization encourage employees to go beyond their role boundaries and demonstrate
extra role performance. The findings concur with Malhotra et al. (2013) who revealed that
employees who are committed to an organization and use discretionary efforts are prone
to excel in achieving quality customer service; the study highlights a direct relationship
between organizational commitment through training and customer service quality.
Any business that is keen to survive and prosper in this present day diverse and turbulent
economy has found it imperative to invest in ongoing training and development to
improve proficiencies in service delivery as well as to acquire the greatest return in
investment of human capital (Knoke & Kalleberg, 1994). Although this area of training
effectiveness seems paramount, and although training is an integral part of the employer–
employee relationship, Knoke and Kalleberg (1994) suggest direct evidence about
company training practices based on representative samples of diverse employing
organizations is almost non-existent. Furthermore, several authors have suggested that
training is most extensive only in establishments which operate in complex market
25
environments (Rowden & Conine, 2005; Sahinidis & Bouris, 2008). In addition, Rowden
and Conine (2005) indicate that there is limited research on human resource development
in small and midsized businesses. According to these authors, most people believe that
small businesses do little, if any, development of their workers. Moreover, Rowden and
Conine cite Training Magazine, which annually conducts research on the training industry
in the United States, as not even attempting to contact businesses with fewer than 100
employees. In addition, in their annual research sample, only 16% consisted of companies
between 100 and 500 workers. In general, little human resource development occurs in
small businesses (Hill & Stewart, 1999). In summary, a slowly growing number of
authors are currently doing more research in the areas of training and development and its
effects on employees that we have not seen in past literature.
2.4.2.1 Effects Staff’s Knowledge of Product and Services on Quality of Customer
Service
Employees in a service organization and particularly, those who have frequent contacts
with the customer usually serve as representatives of both the organization and their
products or services to the customer at contact point. The quality of the service and the
satisfaction the customer may derive will be an assessment of the entire service
experience. Employees who are empowered in an organization can either portray a
positive or negative picture to the customers. Considering that, a satisfied customer and
employee are of important value to the organization; it therefore, becomes the duty of the
management to put in place a system that would ultimately generate either satisfaction, or
dissatisfaction from their customers and employees. Since the employees have a major
role to play in determining, whether a customer would enjoy the experience or turn to
their competitors for better solutions. This forces organizations to re-think their strategy
(Baruch, 2008). Companies today recognize that they can compete more effectively by
distinguishing themselves with respect to service quality and improved customer
satisfaction (Zeithaml et al. 2006).
2.4.3. Benefits of Staff Training to the Organization
According to Al Emadi and Marquardt (2007) training program benefits can be looked at
from three different perspectives: personal benefits, job related benefits, and career
benefits. Personal benefits refer to the benefits that an employee attending the training
program can expect to achieve in terms of improving their job performance, developing
26
their network, and attaining personal growth and development. Job related benefits lead to
the development of better relationships with customers, colleagues and managers and
gives a break from the daily work routine. Career benefits can be considered an outcome
of employee participation in training programs, as it helps them achieve their career
objectives and pursue new paths to extend and develop their careers (Al Emadi and
Marquardt 2007).
A study by Brunetto, Farr-Wharton and Shacklock (2012) have shown that giving
employees an opportunity to learn develops a higher level of commitment among
employees, compared to job security, monetary benefits, and job satisfaction. Further, it
has been found that employee commitment levels are high when they are given training
opportunities and, hence, they display a higher rate of training participation (Bartlett,
2001). Bartlett and Kang (2004) further revealed that firms who have fair accessibility to
training programs are more likely to have a greater number of committed employees in
their organization. A training program that is effective may also lead to employees
forming an opinion that their organization demonstrates a willingness to invest in them,
since the organization cares about them. This encourages a higher level of commitment
among employees toward their organization (Teck-Hong and Yong-Kean, 2012).
Higher degree of training also increases employee satisfaction and loyalty towards the
firm (Choo and Bowley, 2007). A study by Stephen and Bowley (2007) shows that
training is associated with employee’s productivity which further leads toward improved
employee and customer satisfaction. However, Choo and Bowley (2007) asserts that
while considering a training process its essential to explore who is taking part in trainings,
style and design of training and all about the main objectivity of the trainings being
achieved or not.
Employee commitment levels can be evaluated in the manner in which they welcome
their customers, attend to their issues, and, hence, support and fulfill the objectives of an
organization. Employees who feel part of an organization and agree to the targets
stipulated by the management perform their duties and responsibilities with sincerity,
unlike employees who stay with the organization just for the sake of duty or merely under
obligation (Malhotra, Mavondo, Avinandan, and Hooley, 2013).
27
2. 5 Chapter Summary
This chapter discusses the literature review based on the research objectives of the study.
These are: to investigate extent to which training of staff affect quality of customer
service; to establish extent to which staff attitude affect quality of customer service;
effects of internal processes and procedures on the quality of customer service; to
establish the extent to which monitoring and evaluation affect quality of customer service;
and the effect of staff’s knowledge of product and services on quality of customer service.
28
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter describes the research design and methodology for the study. It specifically
provides for the design adopted followed by the target population and sampling frame,
sampling design and sample size for the study, the sampling procedure to be used in
conducting the study, methods of data collection, instrumentation issues with regard to
validity and reliability, operational definition of variables, method of data analysis to be
used in conducting the research and finally the summary of the chapter.
3.2 Research Design
Cooper and Schindler (2008) defines a research design as the scheme, outline or plan that
is used to generate answers to research problems. Creswell (2007), similarly notes that a
research design is the structure of the research that holds all the elements in a research
project together. The research design adopted for this research is descriptive quantitative
study. According to Colin (2002), descriptive research design involves fact finding and
enquiries of different types. It explains a state of affairs as it exists currently. Descriptive
study will help address research objectives through empirical assessment that involve
numerical quantitative measure. Quantitative numerical data collected will make
statistical analysis of findings feasible. The methodology adopted in this study will be
carried out using a questionnaire survey. According to Cox and Hassard (2005) a survey
is method of carrying out research using structured questionnaire that are given to a
sample of a population and designed to elicit specific information from the respondents.
The survey questions are designed to gather information on such things as attitudes,
intentions, awareness, behaviors and motivations
3.3 Population and Sampling Design
3.3.1 Population
Mugenda and Mugenda (2008) define population as the entire group of individual’s,
events or objects having a common observable characteristic. On the other hand, he
defines target population as that population the study studies, and whose findings are used
to generalize the entire population (Mugenda and Mugenda, 2008). The research will
29
target all the Ecobank franchises in Kenya with a population of 450 regional staff. The
research will be looking mainly at the factors affecting the quality of customer service in
the banking industry in Kenya: A case of Ecobank Kenya, Nairobi region.
3.3.2 Sampling Design
3.3.2.1 Sampling Frame
The sampling frame refers to the listing of all population elements from which the sample
will be drawn and is closely related to the population (Cooper and Schindler, 2011). They
suggest that ideally, it is a complete and correct list of population members only. The
sampling frame for this study will be a listing of all the 450 regional staff of Ecobank
franchises in Kenya. The list will be obtained from the Ecobank’s Human Resources
manager.
3.3.2.2 Sampling Technique
Sampling is the process of selecting a number of individuals for a study in such a way
that the individual selected represents the large group from which they are selected from
Mugenda et., (2003). Sampling procedure may be defined as a systematic process of
individuals for a study to represent the larger group from which they are selected (Cooper
and Schindler, 2008). They all define sample as method of selecting a portion of the
population for conducting a study in order to represent the population adequately since it
is impossible to take the entire population because of time, financial factors and errors
which can discourage the researcher and lead him to surrender the study. This study will
utilize a multiple methodology to achieve optimum representative sample. The mix
consists of Stratified sampling, and simple random sampling.
3.3.2.3 Sample Size
A sample size refers to the collection of elements selected in the population (Cooper and
Schindler, 2011). In their earlier work Cooper and Schindler (2008), describe the sample
size as a smaller set of the larger population. Mugenda (2003) argues that the choice of
sample size is governed by the confidence you need to have in your data, level of
certainty, the accuracy you require for any estimates made in your sample, the type of
analysis you are going to undertake and finally the size of total population from which
your sample is drawn. This study selected an equal number of employees from the
30
Ecobank Nairobi region. This will comprise of the customer service manager and
customer service officer from each branch in the Nairobi region and all the 20 employees
of the Customer engagement department.
Table 3.1: Distribution of Sample Size
Ecobank Branch(Nairobi) Population Sample
Client engagement 20 20
Ecobank Towers 10 2
Chambers 8 2
Industrial Area 7 2
Gikomba 5 2
Embakasi 5 2
Karen 6 2
Plaza 2000 7 2
Thika Road Mall 5 2
Ongata Rongai 5 2
Kitengela 5 2
Total 83 40
3.4 Data Collection Methods
Data collection is the process of gathering and measuring information on variables of
interest, in an established systematic fashion that enables one to answer stated research
questions, test hypotheses, and evaluate outcomes (Cooper and Schindler, 2008). Primary
data will be sourced from the questionnaires by the respondents and secondary data will
be sourced from existing publications on the subject of study. The questionnaire will
incorporate a Likert scale of 5 measurements. The questionnaire had four sections,
Section ‘A’ formed demographic questions, Section ‘B’ had questions under research
question 1, section ‘C’ had questions under research question 2, while section ‘D’ had
questions under research question 3. Glaser and Strauss (2009) explains that
questionnaires are an important instrument for research as a tool for data collection. The
use of questionnaires was justified to the extent that questionnaires are effective way of
collecting information from a large literate sample in a short span of time and at a reduced
cost than other methods. The questionnaires were made use of closed ended questions to
ensure consistency, easy coding, and data analysis.
31
3.5 Research Procedures
This data collection instrument will be pilot tested with 5 respondents. The pilot test was
conducted to detect weaknesses in design and instrumentation and to provide proxy data
for selection of probability sample, it therefore draws subject from the target population
and simulate the procedures and protocols that have been designated for data collection
(Cooper and Schindler, 2008). According to Saunders et al., (2009) a complete account
of the research process including pilot testing, scheduling of the subjects and collection of
the data collection instruments has to be conducted.
The problems encountered during piloting testing of the data collection instrument will
addressed by making necessary adjustments to the data collection instrument before
administering it on the whole study sample. A number of methods will be used to
administer the questionnaires. The researcher with the help of one research assistant who
will be trained on communication and interviewing technics will administer the
questionnaires They will use the drop and pick method by delivering the 6 questionnaires
to each of the Nairobi region branches and pick them the day after by which time it’s
expected that all the respondents will have filled them.
3.6 Data Analysis Methods
Data analysis involves reducing accumulated data to a manageable size, developing
summaries, looking for patterns, and applying statistical techniques (Cooper and
Schindler, 2008). The quantitative data was analyzed using both descriptive and
inferential statistics. Descriptive statistics was utilized for measures of central tendencies
(Mean, Median and Mode), and measures of dispersion (Variance, Standard deviation,
Standard Error, and Percentiles). On the other hand, inferential statistics was utilized for
correlations, and multiple regression. The analysis process will entail transforming a mass
of raw data into tables, charts, with frequency distribution and percentages to provide key
answers to the research questions. Data will be analyzed using Statistical Package for
Social Sciences (SPSS) program and presented using descriptive statistics especially
frequency tables and figures
32
3.7 Chapter Summary
This chapter has presented the research methodology that was adopted to conduct this
study. This study adopted a descriptive research design. The study population comprised
60 employees of Ecobank Nairobi region. The study relied mostly on primary data which
was collected from the respondents using a tailor-made self-administered questionnaire.
This data collection instrument was pilot tested on 5 respondents. Statistical methods that
is, descriptive statistics and inferential statistics were used to analyze the data.
The next chapter will present the results and findings of this study.
33
CHAPTER FOUR
4.0 DATA ANALYSIS AND INTERPRETATION
4.1 Introduction
This chapter presents the data analysis, interpretation and presentation. The study
sampled 40 Ecobank Kenya staff from Nairobi. The data was interpreted as per the
research questions. The analysis was done through descriptive and inferential statistics.
The findings were presented in form of figures and tables. The data was analysed using
statistical package software, SPSS (Statistical Package for Social Sciences) as was
proposed in the previous chapter. The analysed data was presented according to the study
objectives.
4.2 General Information
4.2.1 Response Rate
Koltler (1997) defines the response rate as the extent to which the final set of data
includes all sample members and it is calculated as from the number of people with
whom interviews are completed divided by the total number of people in the entire
sample, including those who refused to participate and those who were unavailable. So
the researcher examined a sample of 40 respondents from whom dully filled
questionnaires were collected a proportion of 88.89% which is a reliable response rate for
data analysis as Babbie (2002) posited that any response of 50% and above is adequate
for analysis.
Table 4. 1: Response Rate
Ecobank Branch(Nairobi) Sample Response Rate%
Client engagement 20 12
Ecobank Towers 8 8 100
Westminster 8 8 100
Westlands 4 4 100
Chambers 2 2
Industrial Area 2 0 0
Gikomba 2 2 100
Embakasi 2 0 0
Karen 2 0 0
Plaza 2000 2 0 0
Thika Road Mall 2 2 100
Ongata Rongai 2 2 100
Kitengela 2 0 0
Total 58 40
34
4.2.2 Respondents Department
A total of 40 respondents were interviewed for this study and all responded. Figure 4.3
indicates that 30% of the respondents were from the headquarters; followed by Ecotowers
branch and Westminster with 20% (8) each. Westlands was fourth with 10% and
Chambers, Thika road Mall, Gikomba and Ongata Rongai all were fifth with 5%(2)
respondents each.
Table 4. 2: Respondents Ecobank Branches
Frequency Percent
Valid Ecotowers 8 20.0
Westminister 8 20.0
Westlands 4 10.0
Chambers 2 5.0
Gikomba 2 5.0
Ongata Rongai 2 5.0
Thika road Mall 2 5.0
H/Q Client Engagement 12 30.0
Total 40 100.0
4.2.3 Respondents Gender
of the 40 respondents interviewed for this study, 60% were female and 35% were male.
5% of the respondents did not indicate their gender as shown in Table 4.3
Table 4. 3: Respondents Gender
Frequency Percent
Valid 2 5.0
Male 14 35.0
Female 24 60.0
Total 40 100.0
4.2.4 Respondents Age
The study wanted to establish the age of the Ecobank employee. Most (55%) of the
respondents interviewed as shown in Table 4.5 were 26 -33 years old. This was followed
by 18 to 25 years old who were 20% , 34-41 who were 15% and the least were 42-49 year
olds who were only 5%.
35
Table 4.4 Respondents Age
Frequency Percent
Valid 18-25 years 10 25.0
26-33 years 22 55.0
34-41 years 6 15.0
42-49 years 2 5.0
Total 40 100.0
4.2.4 Respondents Level of Education
According to the findings, 45% of the Ecobank employees interviewed had undergraduate
degrees followed by 25% who had diplomas. The least 15 % had certificates same as the
ones with post graduate degrees as shown in Table 4.5.
Table 4.5 Level of Education
Frequency Percent
Valid Certificate 6 15.0
Diploma 10 25.0
Undergraduate 18 45.0
Postgraduate 6 15.0
Total 40 100.0
4.2.5 Years Worked for Ecobank
According to the Table 4.6, most 40% of the employees interviewed had worked for
Ecobank for less than 1 year. This was followed by 25 % who had worked for 1-2 years,
25% who had worked for 2-3 years and the least 10% who had worked for more than 4
years.
Table 4.6 Years Worked
Frequency Percent
Valid Less than 1 year 16 40.0
1-2 years 10 25.0
3-4 Years 10 25.0
Above 5 years 4 10.0
Total 40 100.0
36
4.2.6 Respondents Departments
According to the findings, 55% of the Ecobank employees interviewed worked in the
Client Engagement department, followed by 50% who worked in the operations
department. The trade services department which had only 10% and the legal department
with the least 5% as shown in Table 4.7.
Table 4.7 Respondents Departments
Frequency Percent
Valid Client Engagement 22 55.0
Trade services 4 10.0
Operations 12 30.0
Legal 2 5.0
Total 40 100.0
4.3 Effects of Internal Processes on Quality of Customer Service
To get an idea of the influence of Internal processes on quality of customer service,
respondents were asked to answer questions on processes related to customer service in
the bank. All the respondents confirmed that internal processes influenced quality of
service as shown on Table 4.8. These findings show that, Our CS processes help us serve
our customers better was the most dominant factor with a mean of 4.28, followed by We
have diverse products and services that meets our clients’ needs (mean = 4.25); We have
clear process to deal with complaints from customers (mean = 4.22). the least is Our
processes ensure quality customer services and We have SOP on consultations with
customers both with a mean of 4.89.
Table 4.8 Effects of Internal Processes on Quality of Customer Service
Descriptive Statistics
N Mean
Std.
Deviation Variance
Our processes ensure quality customer services 36 3.89 1.063 1.130
Our processes are written and clearly articulated 36 3.94 .984 .968
We have clear process to receive complaints from
customers 36 3.94 .924 .854
We have clear process to deal with complaints from
customers 36 4.22 .989 .978
We have SOP on consultations with customers 36 3.89 .950 .902
We have diverse products and services that meets our
clients’ needs 32 4.25 .672 .452
Our CS processes are efficient 36 4.17 .971 .943
Our CS processes help us serve our customers better 36 4.28 1.059 1.121
Valid N (listwise) 32
37
4.3.1 Correlations
The study sort to establish the relationship between the quality of customer service and
the internal processes in Ecobank towards their customers. From the correlation Table 4.9
there is a positive correlation between the quality of customer service and the internal
processes (r = .744, p < 0.01).
Table 4.9 Correlations
Qual_CS Int_Processes Attitude Staff_Training
Qual_CS Pearson Correlation 1 .744** .688** .597**
Sig. (2-tailed) .000 .000 .000
N 40 36 36 40
Int_Processes Pearson Correlation .744** 1 .581** .394*
Sig. (2-tailed) .000 .000 .017
N 36 36 36 36
Attitude Pearson Correlation .688** .581** 1 .579**
Sig. (2-tailed) .000 .000 .000
N 36 36 36 36
Staff_Training Pearson Correlation .597** .394* .579** 1
Sig. (2-tailed) .000 .017 .000
N 40 36 36 40
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
4.3.2 Regression
To establish the type relationship between internal processes and quality of customer
service, a simple linear regression was used and the findings are shown in Table 4.10 and
4.11
Table 4.10 Model Summary
Model Summaryb
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .744a .553 .540 .29589
a. Predictors: (Constant), Int_Processes
b. Dependent Variable: Qual_CS
From the model summary table 4.11, the R Square, the coefficient of determination, .553,
is the squared value of the multiple correlation coefficients. It shows that 55.3% of the
38
variation in the dependent variable (Quality of Customer service) is explained by the
model. This therefore means that other factors not studied in this research contribute
64.3% of variance in the dependent variable.
Table 4.11 Coefficient
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 2.376 .261 9.115 .000
Int_Processes .410 .063 .744 6.489 .000
a. Dependent Variable: Qual_CS
This study aimed to determine the type of relationship that exists between the dependant
variable, quality customer service and independent variable internal processes.
From the table 4.18, the regression equation is:
Quality Customer Service = 2.376 + 0.410Internal processes
4.3.3 Multiple Regression Analysis
To establish the type relationship between quality of customer service, Staff training, staff
attitude and internal processes, a Multiple linear regression was used and the findings are
shown in Table 4.12 and 4.13
Table 4.12 model Summary
Model Summaryb
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .837a .701 .673 .24961
a. Predictors: (Constant), Staff_Training, Int_Processes, Attitude
b. Dependent Variable: Qual_CS
From the model summary table 4.19, the R Square, the coefficient of determination, .701,
is the squared value of the multiple correlation coefficients. It shows that 70.1% of the
variation in the dependent variable (Quality of Customer service) is explained by the
three independent variables.
39
Table 4.13 Multiple regression
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.045 .403 2.594 .014
Int_Processes .273 .066 .496 4.156 .000
Attitude .224 .124 .243 1.808 .080
Staff_Training .227 .100 .271 2.280 .029
a. Dependent Variable: Qual_CS
The study aimed to determine the type of relationship that exists between the dependant
variable, quality customer service and independent variable staff training, staff attitude
and internal processes.
From the table 4.13, the regression equation is:
Quality Customer Service = 1.045 + 0.273Internal processes + 0.224Staff Attitude +
0.227staff Training,
This means that together the three independent variable have nearly the same influence on
quality customer service when considered together, but internal processes with a
coefficient of 0.273 has the highest influence.
4.4 Staff Attitude and Quality of Customer Service
In order to determine the impact of Staff Attitude on Quality of Customer Service, the
respondents were requested to indicate their level of agreement on the extent to which a
number of issues related to attitude. From the findings shown in Table 4.14, We respect
our customers with a mean of 4.72 is the most dominant factor followed by we don’t
discriminate our customers (mean = 4.61) ; Customers can easily reach us even when the
bank is closed (mean = 4.56) ; we treat our customers in a friendly and courteous
manner(Mean = 4.44). the least is Customers like our opening hours (mean = 3.39)
followed by Banking queues are short and manageable (mean 3.56)
40
Table 4.14 Staff attitude and Quality of Customer service
Descriptive Statistics
N Mean
Std.
Deviation Variance
We are positive and upbeat when serving our customers 36 4.33 .756 .571
We value our customers 36 4.39 .766 .587
we don’t discriminate our customers 36 4.61 .688 .473
We respect our customers 36 4.72 .454 .206
We spend enough time with our customers 36 3.83 1.082 1.171
Banking queues are short and manageable 36 3.56 1.229 1.511
Customers like our opening hours 36 3.39 .903 .816
Customers have easy access to our services 36 3.89 .820 .673
Customers find it easy to get appointments with our
managers 36 3.56 1.319 1.740
Customers can easily reach us even when the bank is
closed 36 4.56 .773 .597
Customers don’t wait for long to be served 34 4.12 1.200 1.440
There is a good relationship among employees in our
branch 36 4.39 .599 .359
we treat our customers in a friendly and courteous
manner 36 4.44 .607 .368
Valid N (list wise) 34
4.4.1 Correlations
The study sort to establish the relationship between the quality of customer service and
the attitude of Ecobank staff towards their customers. From the correlation Table 4.15
there is a positive correlation between the quality of customer service and the staff
attitude (r = .688, p < 0.01).
Table 4.15 Correlations
Qual_CS Int_Processes Attitude Staff_Training
Qual_CS Pearson Correlation 1 .744** .688** .597**
Sig. (2-tailed) .000 .000 .000
N 40 36 36 40
Int_Processes Pearson Correlation .744** 1 .581** .394*
Sig. (2-tailed) .000 .000 .017
N 36 36 36 36
Attitude Pearson Correlation .688** .581** 1 .579**
Sig. (2-tailed) .000 .000 .000
N 36 36 36 36
Staff_Training Pearson Correlation .597** .394* .579** 1
Sig. (2-tailed) .000 .017 .000
N 40 36 36 40
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
41
4.4.2. Regression
To establish the type relationship between staff training and quality of customer service, a
simple linear regression was used and the findings are shown in Table 4.15 and 4.16
Table 4.16 Model Summary
Model Summaryb
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .688a .473 .458 .32122
a. Predictors: (Constant), Attitude
b. Dependent Variable: Qual_CS
From the model summary table 4.15, the R Square, the coefficient of determination, .473,
is the squared value of the multiple correlation coefficients. It shows that 47.3% of the
variation in the dependent variable (Quality of Customer service) is explained by the
model. This therefore means that other factors not studied in this research contribute
64.3% of variance in the dependent variable.
Table 4.17 Coefficients
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.414 .477 2.963 .006
Attitude .634 .115 .688 5.529 .000
a. Dependent Variable: Qual_CS
This study aimed to determine the type of relationship that exists between the dependant
variable, quality customer service and independent variable staff attitude.
From the table 4.16, the regression equation is:
Quality Customer Service = 1.414 + 0.634Staff Attitude
42
4.5. Training of Staff and Quality of Customer Service
4.5.1. Quality of Customer Service
The study sought to find out the effect of Training of Staff and Quality of Customer
Service. The respondents were interviewed on various statements in order to establish the
relationship. To measure the level of perceive quality of service the Ecobank employees
offer their customers, the respondents were asked the extent they agreed with statements
related to quality customer service. The responses were rated on a five point Likert scale
where: 1-strongly disagree, 2-disagree, 3-neutral, 4-agree, 5-strongly agree. Table 4.18
below illustrates the study findings.
Most of the respondents agreed with most of the statements with all having a mean of
more 3. I am confident when serving my clients (Mean 4.55) was the highest followed by
We talk to our customers clearly and enthusiastically (Mean = 4.45); Our customers like
our Customer services (Mean = 4.45); We have competent CS personnel (Mean = 4.30) ;
We receive positive feedback on our services (Mean =4.25). The least was We receive
very few complaints from our customers (Mean =2.85) followed by Our customers are
happy with fees we charge for services (Mean = 3.20)
Table 4.18 Quality of Customer Service
N Mean
Std.
Deviation Variance
Our customers like our Products and services 40 4.05 .932 .869
Our customers like our Customer services 40 4.45 .597 .356
We have diverse products and services 38 4.05 1.293 1.673
We receive very few complaints from our customers 40 2.85 1.075 1.156
We give adequate time during consultation with our
customers 40 3.90 .900 .810
Our services are designed to satisfy customers 38 4.21 .843 .711
We receive positive feedback on our services 40 4.25 .776 .603
We have competent CS personnel 40 4.30 .853 .728
I am confident when serving my clients 40 4.55 .815 .664
We confirm every details of products and services
before engaging clients 40 4.20 .992 .985
We are keen to listen to my clients 40 4.15 .921 .849
We talk to our customers clearly and enthusiastically 40 4.45 .815 .664
Our customers are happy with fees we charge for
services 40 3.20 1.265 1.600
We are happy with the remuneration we receive from
the bank 40 3.45 1.218 1.485
43
4.5.2. Effect of Staff Training on Quality of Customer Service,
To further establish the effect of staff training on the quality of customer service the,
respondents were asked the extent they agreed with selected statements. From the study
findings shown on table 4.19, the majority of the respondents agreed that; they treat
customers in a friendly and courteous manner (Mean=4.44), followed by we have good
knowledge of the products and services we offer (Mean=4.40), We have good knowledge
of CS processes (Mean=4.40), We have received CS training (Mean=4.42), Our
employees have requisite qualification to do their jobs (Mean=4.30), We are trained
whenever a new product or service is introduced (Mean = 3.85) was the least followed by
We have refresher courses (Mean= 3,90).
Table 4.19 Training of Staff and Quality of Customer Service
Descriptive Statistics
N Mean Std. Deviation Variance
Our employees have requisite qualification to
do their jobs 40 4.30 .648 .421
We receive training and induction for the job
we do 40 4.20 .939 .882
we have good knowledge of the products and
services we offer 40 4.40 .744 .554
We have good knowledge of CS processes 40 4.40 .744 .554
We know how to respond to disgruntled
customers 40 4.10 .778 .605
We have refresher courses 40 3.90 .841 .708
We have received CS training 38 4.42 .889 .791
we treat our customers in a friendly and
courteous manner 36 4.44 .607 .368
There is a good relationship among
employees in our branch 36 4.39 .599 .359
40 3.85 1.406 1.977
Valid N (listwise) 34
4.5.4. Correlation
To establish the relationship between staff training and quality of customer service,
Pearson’s bivariate correlation was used and the findings are shown in Table 4.20.
44
Table 4.20. Correlations
Correlations
Qual_CS Int_Processes Attitude Staff_Training
Qual_CS Pearson Correlation 1 .744** .688** .597**
Sig. (2-tailed) .000 .000 .000
N 40 36 36 40
Int_Processes Pearson Correlation .744** 1 .581** .394*
Sig. (2-tailed) .000 .000 .017
N 36 36 36 36
Attitude Pearson Correlation .688** .581** 1 .579**
Sig. (2-tailed) .000 .000 .000
N 36 36 36 36
Staff_Training Pearson Correlation .597** .394* .579** 1
Sig. (2-tailed) .000 .017 .000
N 40 36 36 40
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
From the findings, there was a strong positive correlation between quality of customer
service and staff training (r=0.597, p > .01). There was also a strong positive correlation
between staff training and staff attitude (r= 0.579, p>0.01) and a positive correlation
between staff training and internal processes (r=.394, p>0.01)
4.5.5. Regression
To establish the type relationship between staff training and quality of customer service, a
simple linear regression was used and the findings are shown in Table 4.21 and 4.22
4.21. Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .597a .357 .340 .35559
a. Predictors: (Constant), Staff Training
b. Dependent Variable: Qual_CS
From the model summary table the R Square, the coefficient of determination, .357, is the
squared value of the multiple correlation coefficients. It shows that 35.7% of the
variation in the dependent variable (Quality of Customer service) is explained by the
model. This therefore means that other factors not studied in this research contribute
64.3% of variance in the dependent variable.
45
Table 4.22 Coefficients
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.820 .479 3.800 .001
Staff_Training .520 .113 .597 4.589 .000
a. Dependent Variable: Qual_CS
This study aimed to determine the type of relationship that exists between the dependant
variable, quality customer service and independent variable staff training.
The general form of the regression equation is: Y = a + bX
Where:
Y’ is the predicted value of the Y variable for a selected X value.
a is the Y-intercept. It is the estimated value of Y when X = 0. In other words it is the
estimated value of Y where the regression line crosses the Y-axis when X is zero.
b is the slope of the line, or the average change in Y’ for each change of one unit (either
increase or decrease) in the independent variable X.
For this case:
Quality Customer Service =1.82+0.52 Staff Training
4.6 Chapter Summary
In this chapter, the researcher provided the findings with respect to the information
collected from the respondents. The first section provided the study findings based on
general information on the response rate, respondents’ distribution across the organization
and their respective demographics. This was followed by findings on the three variables
presented on the research questions. The correlation between quality of customer service
and Staff training, Internal Processes and Staff attitude. The next chapter provides the
summary, discussion as well as conclusion and recommendations.
46
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
In this section, the researcher provides a discussion on the findings of the research as
compared to the findings in the literature review, the summary of the study and
recommendations for further improvement on identifying the factors affecting the quality
of Customer Service in the Banking Industry in Kenya; A Case study of Ecobank Kenya,
Nairobi Region. The research is concluded on the basis of the conclusions drawn from the
research questions.
5.2 Summary
The purpose of the study is to establish the factors that affect the quality of customer
service in the Nairobi Region Branches of Ecobank Kenya. The study was guided by the
following questions. To what extent does training of staff affect the quality of customer
service in the Nairobi Region Branches of Ecobank Kenya? To what extent does staff
Attitude affect the quality of customer service in the Nairobi Region Branches of
Ecobank Kenya? What are the effects of Ecobank Kenya’s internal processes and
procedures on the quality of customer service within its Nairobi region branches?
The methodology adopted during the study was in form of a descriptive design whereby
the respondents were asked their opinions on different aspects of customer service. The
target population of this study consisted of 60 employees of Ecobank in the Nairobi
region. It had a response rate of 40. The respondents were from the headquarters,
Ecotowers branch, Westminster branch, Westlands, Chambers, Thika Road Mall,
Gikomba and Ongata Rongai branches. Data was collected by conducting structured
questionnaires to explore all relevant issues. The data was then analyzed using
descriptive statistics and the variables described by means. Correlation and simple and
multiple regression analysis was used. The main data analysis tools used in this study was
the Statistical Package for Social Sciences (SPSS).
The findings indicated that, there was a strong positive correlation between quality of
customer service and staff training (r=0.597, p > .01). There was also a strong positive
correlation between staff training and staff attitude (r= 0.579, p>0.01) and a positive
correlation between staff training and internal processes (r=.394, p>0.01)
47
The findings also established that there is a positive correlation between the quality of
customer service and the staff attitude (r = .688, p < 0.01). Respect for customers with a
mean of 4.72 is the most dominant factor with the least factor being customers like our
opening hours (mean = 3.39)
The findings established that the most of the respondents agreed that internal processes
plays a key role on its ability to offer quality customer services. The study established that
there was a positive correlation between the quality of customer service and the internal
processes (r = .744, p < 0.01). The study also determined that together the three
independent variable have nearly the same influence on quality customer service when
considered together, but internal processes with a coefficient of 0.273 has the highest
influence.
5.3 Discussion
5.3.1. Effects of Internal Processes on Quality of Customer Service
The study sort to establish the relationship between the quality of customer service and
the internal processes in Ecobank towards their customers. To get an idea of the influence
of Internal processes on quality of customer service, respondents were asked to answer
questions on processes related to customer service in the bank. All the respondents
confirmed that internal processes influenced quality of service. These findings showed
that, customer service processes helped the employees serve their customers better and
that Ecobank has diverse products and services that meets our clients’ needs This agrees
with, Zeithaml et al. (2006) which implies that companies today recognize that they can
compete more effectively by distinguishing themselves with respect to service quality and
improved customer satisfaction processes.
The findings showed that although Ecobank has a clear process to deal with complaints
from customers, it needs to be improved to meet the customers’ expectations. the bank’s
processes ensured quality customer services and further showed that the need to use
standard operating procedures on consultations with customers.
The findings showed that there was a positive correlation between the quality of customer
service and the internal processes (r = .744, p < 0.01).
48
From the model summary showed that nearly a half of the variation in the dependent
variable Quality of Customer service is explained by the internal process model. The type
of relationship that exists between the dependent variable, quality customer service and
independent variable internal processes was captured by the regression equation:
Quality Customer Service = 2.376 + 0.410Internal processes
This findings agree with Stem’s, (2005) works which argues that effective service
delivery requires that; the principles , objectives, indicators, inputs, outputs, outcomes ,
impact and implementation strategies are well structured. Gronroos, (2005) has also
argued that although acceptable outcome is an absolute necessity for good perceived
quality service, an excellent service process creates a distinct and sustainable competitive
edge.
A Multiple linear regression was used to establish the type relationship between quality of
customer service, Staff training, staff attitude and internal processes. The finding showed
that 70.1% of the variation in the dependent variable (Quality of Customer service) is
explained by the three independent variables. The regression equation relating was:
Quality Customer Service = 1.045 + 0.273Internal processes + 0.224Staff Attitude +
0.227staff Training,
This means that together the three independent variable have nearly the same influence on
quality customer service when considered together, but internal processes with a
coefficient of 0.273 had the highest influence. Susskind, Kacmar and Borchgrevink
(2013) found that the relationship between customer service providers’ attitudes relating
to customer service and customer satisfaction in the customer was most critical which is
different from the study’s findings.
It can be argued that the quality of the service and the satisfaction the customer may
derive will be an assessment of the entire service experience. Employees who are
empowered with clear processes and training in an organization can either portray a
positive or negative picture to the customers. Considering that, a satisfied customer and
employee are of important value to the organization; it therefore, becomes the duty of the
management to put in place a system that would ultimately generate either satisfaction, or
dissatisfaction from their customers and employees. And as Baruch, (2008), organizations
to re-think their customer service strategies since the employees have a major role to play
49
in determining, whether a customer would enjoy the experience or turn to their
competitors for better solutions.
5.3.2. Staff Attitude and Quality of Customer Service
This study wanted to establish the effect of Staff Attitude on Quality of Customer
Service. First, its important note that attitudes are learned and provide emotional basis of
one’s interpersonal relations and identification with others. (Fishbein and Ajzen, 1975;
Hettiararchchi and Jayarathn, 2014). From the study respect for customers was the most
dominant factor followed by non-discrimination of their customers; which is
understandable because respected customers will tend to build trust on the organization.
From the findings, there is a positive correlation between the quality of customer service
and the staff attitude (r = 0.688, p < 0.01). This agrees with a number of authors like
Gallup (2012), Moran (2011), Pritchett (2007) which established the effects of an upbeat
and positive attitude in customer service interactions. Susskind, Kacmar and
Borchgrevink (2013) also found that there was a relationship between customer service
providers’ attitudes relating to customer service and customer satisfaction in the
customer. As Hettiararchchi and Jayarathn, (2014) attitudes are organized and are closed
to the core of personality and some attitudes are persistent and enduring; yet, like each of
the psychological variables, attitudes are subject to change. Ecobank should strive to
positively influence its employee’s attitude to ensure quality service provision.
The least favorable factor from the study, was that customers like our opening hours
followed by banking queues are short and manageable. These two are negative aspect of
the service Ecobank offers which the bank should address to enable the employees offer
quality services. Empowering of the employees by facilitating the jobs with resources,
quick and supportive decision is one of the aspects that can change their attitude.
According to Ellinger, Elmadag and Ellinger (2007), empowered employees have control
over their work and how the work is done.
From the study the type of relationship that exists between the dependent variable, quality
customer service and independent variable staff attitude was captured in the regression
equation:
50
Quality Customer Service = 1.414 + 0.634Staff Attitude
This reinforces the findings of many studies like Moran (2011), and Ray (2015), which
show a strong positive relationship between the employee’s attitude and quality of service
rendered.
Workplace attitudes, both positive and negative, are infectious and can easily spread and
can have a ripple effect on the work force. Ray (2015) argues that positive attitudes make
interaction and collaboration more pleasant and productive and encourages organizations
to create social atmosphere that results from good attitudes creates incentives and gives
employees a sense of belonging and emotional investment for the success of the
company.
5.3.3 Training of Staff and Quality of Customer Service
The study sought to find out the effect of Training of Staff and Quality of Customer
Service. Most of the respondents agreed that Ecobank offers quality customer service.
The finding also showed that the employees felt that the customers like Ecobank’s
Customer services. This is illustrated by the fact that they receive positive feedback on
our services from the employees.
Training employees encourages a higher level of commitment among employees toward
their organization (Teck-Hong & Yong-Kean, 2012). This is reflected in the study where
employees who have been trained seem to committed to the organization’s objectives of
offering quality customer service
They expressed confidence when serving their clients and talked to our customers clearly
and enthusiastically. This could be because they were competent or felt that they were
backed by competent customer service personnel.
This study sort to establish the effect of staff training on the quality of customer service.
From the findings, the majority of the respondents agreed that treating their customers in
a friendly and courteous manner was the most important factor. This agrees with Bartlett
and Kang (2004) who argue that firms who have fair accessibility to training programs
are more likely to have a greater number of committed employees in their organization.
Training also empowers the employees as the offer services to the customers as reflected
in the respondents’ view that they have a good knowledge of the products and services
51
Ecobank offers. According to Bartlett and Kang (2004) a training program that is
effective may also lead to employees forming an opinion that their organization
demonstrates a willingness to invest in them, since the organization cares about them.
This would be a good recommendation to Ecobank as the employees score training
whenever a new product or service is introduced the least factor followed offering of
refresher courses.
From the findings, there was a strong positive correlation between quality of customer
service and staff training (r=0.597, p > .01). There was also a strong positive correlation
between staff training and staff attitude (r= 0.579, p>0.01) and a positive correlation
between staff training and internal processes (r=.394, p>0.01). This agreed with Padi
(2012) study conducted on the effect of training on customer service delivery; which was
based on a contextual analysis of a limited number of training sessions held for staff of
Barclays bank, Ghana a comparable economy to Kenya. The study revealed that all the
staff had special training towards improving customer service delivery and majority of the
bank ‘s customers perceived its service delivery as good which is in line with the findings
of this study.
The regression model summary showed that only about a third of the variation in Quality
of Customer service is explained by staff training. The regression equation from the linear
regression indicates that: Quality Customer Service =1.82 + 0.52 Staff Training
This is to show Ecobank that they need to address other issues in conjunction with the
training.
Although quite positive about the services they gave the findings showed that there were
complaints from customers and that customers were not happy with fees Ecobank charges
for services. This could be as a result of what other banks offer in the market.
5.4 Conclusions
5.4.1. Effects of Internal Processes on Quality of Customer Service
The study sort to establish the relationship between the quality of customer service and
the internal processes in Ecobank towards their customers. The findings showed that there
was a positive correlation between the quality of customer service and the internal
processes. Organizations need to ensure that they create excellent internal service
52
processes that will enable them create a distinct and sustainable competitive edge. When
the influence of all the three factors, Staff training, staff attitude and internal processes,
on quality of customer service are considered together, internal processes appears to have
the highest impact.
5.4.2. Effects of Staff Attitude on Quality of Customer Service
This study wanted to establish the effect of Staff Attitude on Quality of Customer
Service. There is a positive correlation between staff attitude and Quality of Customer
Service. There is also a strong positive correlation between attitude, training, and internal
processes within organizations. The actions of employees in providing quality customer
services should not be viewed or expected to have desirable effect in isolation, an
organization must ensure it provides quality products and services that meet their
customers’ needs.
5.4.3. Effect of Staff Training on Quality of Customer Service
The study sought to find out the effect of Training of Staff on Quality of Customer
Service. From the findings and discussion, it’s clear that training has an influence on the
quality of service offered by Ecobank. The training received by Ecobank bank staff on
improving customer service delivery can result in improved the performance of staff
which resulted in improving the performance of staff which was perceived as good by the
customers of the bank
5.5 Recommendations
5.5.1 Recommendation for Improvement
5.5.1.1 Effects of Internal Processes on Quality of Customer Service
The study recommends that Ecobank should ensure its internal processes are designed
and clearly documented to help the employees provide quality customer services.
Considering that, a satisfied customer and employee are of important value to the
organization; it therefore, becomes the duty of the management to put in place a system
that would ultimately generate either satisfaction, or dissatisfaction from their customers
and employees. Ecobank should also re-think their customer service strategies since the
employees have a major role to play in determining, whether a customer would enjoy the
experience or turn to their competitors for better solutions.
53
5.5.1.2 Effects of Staff Attitude on Quality of Customer Service
It is recommended that the Ecobank Kenya should increase the training they offer their
employees especially on new products and on how to meet customer expectations,
increase assertiveness, and deal with stress and how to maintain good customer service
delivery. They need to incorporate refresher courses to keep them abreast with
developments in the industry.
5.5.1.3 Effect of Staff Training on Quality of Customer Service
It is recommended that the Ecobank Kenya should increase the training they offer their
employees especially on new products and on how to meet customer expectations,
increase assertiveness, and deal with stress and how to maintain good customer service
delivery. They need to incorporate refresher courses to keep them abreast with
developments in the industry.
5.5.2 Recommendations for Further Studies
This study only involved the employees yet the customers who are the recipients of the
services were not involved. There is need to enhance the study’s findings by involving the
customers. A national and international study could also be done for a better and clearer
view of the impact of Staff training, staff attitude and internal processes, on quality of
customer service in the Ecobank. There is a possibility that other factors could have
significant impact on the quality of customer service.
54
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APPENDICES
APPENDIX I: COVER LETTER
Mercy Mose,
P.O Box 22807 – 00100,
Nairobi.
Dear Respondent,
RE: REQUEST FOR YOUR PARTICIPATION IN MY RESEARCH PROPOSAL
I am the above student currently pursuing a course towards conferment of Master of
Business Administration (MBA) from United States International University – Africa.
In partial fulfillment of the requirements of the award of the degree, I am conducting
research proposal to determine factors effecting the quality of customer service at
Ecobank Kenya. You have been randomly selected to participate in this study.
Participation is voluntary and I will spare a few minutes of your time to fill in the blanks
of the attached list of questions to the best of your knowledge. Kindly complete all
sections of the questionnaire to enable me complete the study. Please note that the
information you provide will be treated as confidential, and will only be used for purpose
of this research.
The findings of this study will inform the Ecobank to enable them adopt the findings into
their operations and facilitate further research.
Your participation in this study will be highly appreciated.
Yours Sincerely,
Mercy Mose
58
APPENDIX II: QUESTIONNAIRE
Section 1: Background information
1. Ecobank Branch …………………………………………………………
2. Gender
Male ( ) Female ( )
3. Age
18-25 years ( ) 26-33 years ( )
34-41 years ( ) 42-49 years ( )
Above 50 years ( )
4. Education ( ) High School ( )
Certificate ( ) Undergraduate ( )
Diploma ( )
Postgraduate ( )
5. How long have you worked for Ecobank
Less than 1yr ( ) 1-2 years ( )
3-4 years ( ) 4-5 years ( )
Above 5 years ( )
6. Department…………………………………….
59
Section 2: Quality of Customer Service
The following factors relate to the quality of Ecobank customer service. Please rate to
what extent you agree or disagree with the following statements. 1=Strongly Disagree,
2=disagree, 3=Neutral, 4=Agree and 5=Strongly Agree
Factors 1 2 3 4 5
Our product and services
Our customers say the like our products and services
Our customers say they like our customer services
We have diverse products and services
General Satisfaction
We receive very few complaints from our customers
we give adequate time during consultations with our customers
Our services are made to ensure customer are satisfied
We receive a lot of positive feedback on our services
Technical capacity
We have competent customer service personnel
I am confident when serving my clients
We confirm all details of product and services before engaging our
customers
Communication
we make am keen to listen to my clients
we talk to our customers clearly and enthusiastically
Financial
Our customers are happy with the fees we charge for our services
We are happy with the remuneration we receive from the bank
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Section 3: Effect of Internal Processes on Quality of Customer Service
Processes 1 2 3 4 5
We have processes that ensure quality customers services
Our processes are written and clearly articulated
We have a clear process to receive complaints from our customers
We have a clear process to deal with complaints from our
customers
we have SOP on consultations with our customers
we have a diverse products &services that meets our clients’ needs
Our customer service processes are efficient
Our customer service processes help us serve our customers better
Section 4: Staff Attitude and Quality of Customer Service
1 2 3 4 5
attitude
We are positive and upbeat when serving our employees
We value our customers
We don’t discriminate our customers
We respect our customers
Time spent with client
We usually spend enough time with customers
Banking ques are short and manageable
Our customers like our opening hours
Accessibility and Convenience
Customers have easy access to our services
customers find it easy to get appointments with our managers
Our customers can easily reach us even when the bank is closed
Our customers don’t wait for too long to get served
Interpersonal manner
There is a good working relationship among employees in our branch
we treat our customers in a friendly and courteous manner
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Section 4: Staff Training and Quality of Customer Service
1 2 3 4 5
Qualifications
Our employees have the requisite qualification to do their job
We receive training and induction for the jobs we do
we have good knowledge of the products and services we offer
We have good knowledge of the customer service processes
We know how to respond to disgruntled customers
We have refresher courses
we have received customer service training
We are trained whenever a new product or service is introduced
Thank you very much for taking your time to fill in the form and to take part in this
research.
