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Service sector organizations always search for various means to forge and uphold quality while delivering services to customers. In order to defend the long-term interest, the changing focus of service quality from a mere competing instrument to that basic core of service concept in meeting and exceeding customer expectation is an emerging important issue in a service organization (Rahaman, Abdullah, & Rahman, 2011). The banking sector, being very competitive, not only focuses on providing wide product lines to create competitive advantages but also emphasizes the importance of its services, particularly in maintaining service quality (Rakesh, 2012). Service quality can be referred to as the difference between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence, dissatisfaction occurs (Parasuraman, Zeithaml, & Berry, 1985; Lewis & Mitchell, 1990). Juran (1999) argued that service quality is the feature of products which meet customer’s needs and thereby provide customer satisfaction. Grönroos (1984) viewed the perceived quality of service as the difference between customers’ expectation and their perceptions of the actual service received, whereas other researchers viewed perceived service quality as an attitude.
According to Hoffman & Bateson (2001), service quality is the attitude formed by continuous overall evaluation of service performance. Parasuraman, Zeithaml, & Berry (1988) argued that customer’s perceived service quality can be seen as a multi-dimensional construct. The survival of the service organisations mainly depends on the satisfaction of employees and customers. Therefore, a business organisation must concentrate on providing good service quality to achieve customer satisfaction and loyalty. The information technology revolution in the Indian economy has made steady inroads into the banking institutions and has brought about a significant change in many aspects in the form of computerization of transactions and new delivery channels such as internet banking, phone banking, Automated Teller Machines (ATMs), Electronic Data Interchange (EDI), etc. With the migration of traditional paper-based funds movements to quicker and more efficient electronic mode, funds transfers have become easy and efficient to perform.
Employees are the internal customers working within the organisation providing the services as per the requirements of the external customers. The requirements of the customers are considered on a priority and banking industry leans on the technology to be on par with the customer’s requirements (Awan, Khan, & Zhang, 2012). In order to render the services to external customers, the needs of internal customers are to be addressed and their ideas are to be considered for designing a seamless flow of services, especially in this technological era which is pioneering by leaps and bounds (Ali & Kaur, 2015). Thus, the tailored services coupled with personal interaction and a better understanding of the customers’ requirements reaps high-quality services (Najmi, Hashmi, Malik, Rezgui, & Khan, 2015).
The growth of the banking sector has been highly depending on the needs of the customers, cost of service offered, level of income, repaying capacity, the expectation of the customer and the service quality. The banking system is facing challenges with stiff competition and the advancement of technology. It becomes imperative for service providers to meet or exceed the target customer's satisfaction with the quality of services expected by them (Patro, 2015). It is essential to know the perceptions of the employees on service quality management of the public sector banks and plan necessary strategies in improving service quality to satisfy employees as well as customers. Therefore, the research question is What are the perceptions of the employees on the service quality management practices of the public sector banks and how to further improve the quality of service?