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Archives of Business Research – Vol. 11, No. 8

Publication Date: August 25, 2023

DOI:10.14738/abr.118.15049.

Alhazemi, A. A. (2023). Impact of Employee Competence and Behaviour on Banking Customer Trust: Empirical Study in Saudi Arabia.

Archives of Business Research, 11(8). 71-81.

Services for Science and Education – United Kingdom

Impact of Employee Competence and Behaviour on Banking

Customer Trust: Empirical Study in Saudi Arabia

Abdulrahm A. Alhazemi

College of Business and Administration, Jazan University, Saudi Arabia

ABSTRACT

The main purpose of the study was to find out the impact of employee competence

and employee behaviour on banking customers’ attitude towards banking and trust

in the banking system. 300 responses were collected from banking customers by

administering structured questionnaire developed for the purpose and translated

into arabic language. The results of the study showed that employee competence

positive relationship with employee behaviour, and customer attitudes, however it

has no significant relationship with the banking customer trust. Employee

behaviour has statistically significant relationship with attitude and trust.

Customer’s attitude influence trust of the banking customer. The study makes

significant contribution to the literature. The findings of the study are important for

the banks to improve and enhance banking customer’s attitudes and trust through

employee competence and behaviour.

Keywords: Employee Behaviour, Employee Competence, Trust, Attitude, Saudi Arabia

INTRODUCTION

Employee behaviors can become important in-service settings, because service customers

often weigh the service process heavily in their quality evaluations (Parasuraman, Zeithaml,

and Berry 1985) banking industry is no exception to this. The behavior of the employees within

a service company connects an association with its customers (Gronroos, 1990). Objective of

such activities is to maintain customer trustworthiness by fulfilling the promises made to the

customer (Berry, 1995). These activities are a critical factor in developing effective working

relationships with customers (Gwinner et al., 1998). The employees of an organization are

therefore essential for ensuring success in this area, because they are the persons ultimately

responsible for providing a quality service that fulfills the expectations of customers (Boulding

et al., 1993; Parasuraman et al.,1991; Zeithaml et al., 1996). Their skills, their attitudes, and the

equipment and other support available to them in providing the service, are all determinant

precursors of customer loyalty (Reichheld, 1993; Bitner, 1995). Research on learning theory

suggests that a focus on behavioral criteria in employee evaluations is ideally suited to

reinforcing desirable employee behaviors (Bolles 1979). Previous studies have found a strong

relationship between the use of behavior-based evaluation and customer-oriented employee

behaviors.

Behavior-based evaluation has been linked to increases in employee competence (Cravens et

al. 1993), confidence (Gist and Mitchell1992), job satisfaction (Oliver and Anderson 1994), and

adaptability (Scott and Bruce 1994). Zeithaml, et al. (1988), argues that behavior-based

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Archives of Business Research (ABR) Vol. 11, Issue 8, August-2023

Services for Science and Education – United Kingdom

evaluation encourages employee performance that is consistent with customer expectations of

quality service. Service firms that adopt customer- oriented strategies are particularly

interested in encouraging customer-oriented behaviors among customer contact employees.

Employees embody the service brand in the consumer’s eyes since in many cases the service

staff is the only point of contact for the consumer. Since in services, the service encounter and

its dependence on staff attitudes is central and has a direct effect on the service standards

delivered to customers there is a need to achieve a greater degree of consistency in delivering

the service experience (Papasolomou & Vrontis, 2006). In many cases, customer contact

employees are the first and only representation of a service firm like banking institutions.

Therefore, customers often base their impressions of the firm largely on the service received

from customer contact employees. A sample of service executives claimed that frontline service

employees are pivotal in forming a customer’s level of perceived service quality (Parasuraman,

Zeithaml, and Berry 1985). Thus, it is crucial that frontline customer contact employees stay

focused on customers’ needs (Kelley 1992). In this study the researcher investigated the impact

of employee behaviour and employee competence on the customer attitude towards banking

services and their trust towards banking services.

REVIEW OF LITERATURE

Researches carried out in this area agree that employee behavior and attitude in the “critical

moments” of interaction with customers have a significant effect on customers’ perception of

the quality-of-service delivery (Bitner, 1990; Bitner et al., 1994). A review of the pertinent

literature identifies different attitudinal and behavioral responses of employees that can have

positive and negative effects on customers’ perceptions of quality of service. These attitudes

and behaviors include conflict, ambiguity, job satisfaction, commitment to the company, and

organizational citizenship behaviors (Castro et al., 2004). According to Hansemark and

Albinsson (2004), satisfaction is an overall customer attitude towards a service provider, or an

emotional reaction to the difference between what customers anticipate and what they receive,

regarding the fulfillment of some need, goal or desire. Kotler (1997) defined satisfaction as a

person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived

performance (or outcome) in relation to his or her expectations. Further customer satisfaction

is a collective outcome of perception, evaluation and psychological reaction to the consumption

experience with a product or service. Boulding et al., 1993 in turn, showed that satisfaction has

a significant effect on purchase intention. For instance, if customers are satisfied with a

particular service offering after its use, they are likely to engage in repeat purchase and try in

building line extensions (East, 1997).

Prabhakaran (2003) revealed that the customer is the king. High customer satisfaction is

important in maintaining a loyal customer base. Customer satisfaction is one of the important

outcomes of marketing activity. In the competitive banking industry, customer satisfaction is

considered as the essence of success (Oliver, 1980; Surprenant and Churchill, 1982; Spreng et

al, 1996; Mick and Fournier, 1999). Kumar et al (2009) stated that high quality of service will

result in high customer satisfaction and increases customer loyalty. Heskettet al (1997) argued

that profit and growth are stimulated primarily by customer loyalty and loyalty is a direct result

of customer satisfaction. Parasuramanet al (1988) and Naeem and Saif (2009) found that

customer satisfaction is the outcome of service quality. Scholars have long studied basic

personality traits as predictors of human behavior (Wiggins 1996). Researchers such as Costa