ISSN 0798 1015

Vol. 39 (Number 33) Year 2018 • Page 3

Relationship analysis between emotional intelligence and service quality with special evidences from Indian banking sector

Análisis de las relaciones entre la inteligencia emocional y la calidad del servicio con evidencias especiales del sector bancario de la India

Smrita JAIN 1; Vibhor JAIN 2; Subhankar DAS 3

Received: 02/03/2018 • Approved: 16/04/2018

Content

1. Introduction

2. Review of literature

3. Objectives & research methodology

4. Results & its analysis

5. Conclusion

Bibliographic references

1. Introduction

There has been a drastic change in the nature of working after the liberalization began from the 1990's in the Indian Financial sector. Main reasons responsible for this drastic and sudden change are the impact of privatization on  Indian economy, which follows through acquisitions, mergers  and strategic alliances. In order to compete in this competitive environment, a flexible workforce is required in terms of skills and mental capabilities. In terms of industries, the requirement of customers regarding service quality is changing significantly, which brings continuous changes in the functions and skills of the employees. The demand for emotionally intelligent employees is increasing who can easily understand the needs and demands of the customers and provide them better services. Moreover, working hours are increasing in all occupations consequently increasing   pressures and challenges in employees’ work life. Now modern organizations start giving more importance to the inner skills of the employees like character, personality and competence, which can be more precisely understood by the term named as ‘ Emotional Intelligence'. The term  is based on the philosophy  that an employee can get a position on the basis of knowledge and skills, but emotional intelligence is required to understand oneself and the requirement of a customer which can be termed as service quality. Emotional Intelligence increases the ability to cope with uncertainties present in the working environment  and demand of the organization to perform  in a better way. When an individual understands the circuit of beliefs, feelings and reaction, then only he can nurture himself into a mature individual. This helps him in handling stressful situations, understanding his strength and to cope up with his weakness. He can become more constructive, productive, creative and effective in his work.( O.Serrat, 2009).

 Nowadays customers are becoming more demanding and their loyalties are diffused. They have multiple choices in today's competitive environment, the wallet share of every organization is reducing and  the demand for customization of services  is increasing which ultimately increases the service quality within the organization. With the advent of  liberalization in the Indian financial sector , gives rise to the low switching costs and customer retention becomes an important issue for banking sector in India .Earlier designing of services is a complex task and it requires the combination of core and supplementary  services  and  now  in today's competitive environment  the delivery of services and the schedule of delivery creates a value proposition  in terms of market segmentation's and hence service quality plays an important role in today Indian private banking sector. Furthermore, it's been shown that a client's perception of a company is made as a result of their interaction across multiple channels and a good or positive consumer experience can increase the company's share in his sector with a simultaneous increase in repeat business ( R. Kumar, 2008)

Customer emotions are determined far more by how the members of the staff treat consumers, than  by  the technical or functional quality of the services. We have moved into a designer phase where ordinary goods are moving into designer territory not through the cost or quality of the product but through the service or experience around them. A great product can be destroyed by an employee if he is not emotionally Intelligent enough to understand the requirement   and a commoditized product can be made great by an employee going beyond the call of duty in pursuit of delivering great customer service, making the customer experience more personal, more positive and more memorable with the use of emotional intelligence.( Kwan,Wayen &T.J Hee, 1994).

2. Review of literature

2.1. Defining Emotional Intelligence (E.I)

It is a skill to understand and analyse our own emotions as well as other's emotions which can be applied in working behavior. These emotions can be derived from what we are feeling and help us to take effective decisions in a particular situation. This skill helps us in making different choices in a particular moment and helps us in gaining more control over ourselves and understanding others in a better way

2.2. Importance of EI

The relevance and significance of emotional intelligence are immense. Leaders of business Era must carry the power of emotional intelligence. Relationship management is more important for business leaders today as any other skill. Relations moreover, need to be developed and sustained for a long  run to provide an edge in business activities. Negative emotions kill trust and relationship and thus emotional intelligence is very important.(John D.Mayer, 1990)

Evolution of the concept of Emotional Intelligence

1931 – E. Thorndite introduced the term “ Social Intelligence”.

1942 –D. Wechsler suggests “ different components of intelligence that are important for success in life.

1951  –A. Maslow Suggest “ How people can develop Emotional strength”.

1975 – H. Gardner introduced “ The concept of Multiple Intelligence”

1985- Wayen Introduced “ Different constructs of Emotional Intelligence”

1987- R.Bar-On  introduced the term “ Emotional Quotient” in the Research work.

1990- Solvey and Mayer introduced “ The framework for Emotional Intelligence”. They proved that  different set of skills of E.I is useful in managing self and others.

1995-D. Goleman popularized the “Termonologies and the concept of Emotional Intelligence “after the publication of his book and subsequent research articles.

2.3. Need for service quality

In all types of services, customer satisfaction is the core area. It is important for every service provider to maintain business's longevity with the client. Again business longevity is based on customer satisfaction which will depend on the fact that how well his expectations are met. In order to understand well how consumer evaluates, select and use the services we have to understand the  consumers requirement with the help of E.I and E.Q (Emotional Quotient).This will directly impact consumer preferences and they will react positively towards the value added offerings. In today's scenario service sector extended a lot, due to which continuous improvement in service quality is required. Service quality has been observed as a strategic tool to enhance operational competences and performances in business. What was once considered 'a great customer experience' becomes a common  customer expectation after some time, the service provider needs to keep that customer loyalty to  the organization by adopting a philosophy of continual service improvement, which will seek to add a little extra to 'beat' customer expectation at each  return visit. (Chris Daffy, 2011) in his book,’ Once a Customer; Always a Customer’, calls these his positives, and  it could be as simple as the garage telling the customer 'we noticed  boot was a bit muddy so we've cleaned it as a service provider' or 'there was a chip on  bonnet that we've touched  in. The whole organization should be involved in the development and ongoing review of customer service quality, developed from a customer perspective, relevant to their area of operation. For maintaining better service quality, we have to concentrate on these three principals

• Identification of customer service issues: there should be systematic identification and management of customer service issues relevant to an organization's operations;

• Feedback systems: effective feedback systems for customers and employees should be developed and maintained;

• Continual improvement: systems should be developed to ensure that the level of customer service is relevant to, or exceeds, current customer expectations.

2.4. Identification of Gaps

Perceived emotional intelligence on service quality as a function of five gaps. These gaps are described below (A. Parasuraman, V.A. Zeithaml and L.L .Berry (1985):

• Consumer expectation– management perception gap: This gap is the result of the differences between what customer expect and what management thinks about it. This gap is generated due to the differences in understanding client’s need by the management. For example- Bank’s management inability to understand what their customers want from them, because of which customer evaluations regarding service quality of bank effected.
• Emotional intelligence on service quality specification gap:

This gap is the result of the distinction between management perceptions towards clients' expectations and therefore the bank managers’ emotional intelligence on service quality specifications, that successively affects emotional intelligence on service quality from the consumers’ view-point. Obviously, this suggests that the existence of this gap is predicated on aspects associated with service style. For example, if a bank notice some of their client’s require some special services, then these services should be provided immediately to reduce this gap.

• Service delivery gap:

This gap is the result of the distinction created between emotional intelligence on service quality conditions and actual service delivery, that influences emotional intelligence on service quality from the consumer’s view-point. The explanations behind this gap is lean support for middle level employees (who are accountable for service delivery), and method issues. For example If banks provided many different services in branches for their clients then it is difficult to provide equal time for every client, which can develop a thinking of poor execution of services and can create service gap. This problem can be solved only by proper training of staff so that they can match their services with service specification decided by the management.

4. External communication gap:

This gap is the result of  the difference between actual service delivered and what is externally communicated about the services that effects emotional intelligence on service quality from client’s view-point.for example in their advertisement all banks promises to give all kind of services like different loan’s to their client but in reality these loans and their limit is decided by different criteria decided by the bank.It Is therefore required that the firms should only promises those services which they can offer in reality otherwise gap increases.

• Between Expected services and perceived services

This gap results as a difference between Expected services and perceived services, it is              generally created as a result of the judgment made by the customer regarding service quality which generally depends on how customer perceive about actual service performance and what are they expecting about it. For example the perception of the male and female client in bank can be different on the same services provided by the bank.

3. Objectives & research methodology

3.1. Objectives

Services providers need to adjust themselves so as to cater the demands of the customers and for that the behavioral patterns of customers must be analyzed. For Judging their perception towards service provided emotional intelligence assists service providers in responding effectively towards the customer needs. The basis of skills like being interpersonal, intrapersonal and technical to deal with diverse customers is emotional intelligence. Banks can enjoy profits only when customers perceive the service quality of the bank, favorably and the customers can be retained for long. Banks which are able to provide best services to their customers can stand in the market for long and serve better than their rivals.

The main objective of this research work is to develop a theoretical framework in order to explain the significance of service quality, emotional intelligence and their impact on service organizations’ with special reference to Indian Banking Sector in UP west region. To achieve these perspectives, it is necessary to: identify and understand the main dimensions of service quality in banks as perceived by consumers; Studying and examining   the relationships between the emotional intelligence and service quality dimensions.

3.2. Research Methodology:

Sampling Used

The present research aims at describing the responses of the customers and banking executives of ten p banks of the ------------ Region on the basis of  two close ended questionnaire.

Population: The researcher has chosen ten  banks of ------region, namely; Axis Bank, Federal Bank, HDFC Bank, ICICI Bank, IndusInd Bank, IDBI Bank, Jammu & Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank and YES Bank.

Sample Size: The researcher has interviewed 30 customers  each of  the ten banks, so the sample size of the customers is 300. The researcher also interviewed 100 employees in all of the ten banks. The researcher has taken 10 employees from each bank. The researcher adopted Convenience random Sampling.

Hypothesis of the Study

1. There is significance positive relationship between Emotional Intelligence and Service Quality in the Banking Sector
2. There is significance positive relationship between level of Emotional intelligence and level of trust of customer.
3. Emotional intelligence has a positive relationship with long term business relationship.

Data Collection Method

The researcher has collected primary data through two close ended questionnaires developed by himself, one for the employees of the banks and another for the customers of the banks. The respondents (customers and employees) were approached personally in order to seek fair responses on ‘Quality of service’ and ‘Emotional intelligence’ among employees in banks.

Statistical Tools used

For an analysis of the data, mean and standard deviation of responses collected have been calculated. The acceptance or rejection of hypothesis was tested through the use of t-test, correlation and regression analysis.

Regression Analysis

For testing the hypothesis empirically, emotional intelligence was taken as an independent variable and service quality was taken as a dependent variable. The hypothesis was tested through linear regression.

R Value

R value indicates the correlation coefficient between emotional intelligence of bank employees and service quality in banking sector.

R Square

R square is the coefficient of determination. It shows the authentication of the research. Closer the value of R2 to 1, greater is the authenticity of the research.

Adjusted R square Value

Adjusted R square Value indicates the adjustment in R2 to reflect the reality.

F Statistics

An overall view indicates that the model fitted is fairly accurate.

Scale: A five point Likert Scale used for both the questionnaire. The details are:

Questionnaire for Customers of  banks: A five point Likert scale starting from highly dissatisfied to highly satisfied (1 – 5) was used for the study.

1 = Highly Dissatisfied

2 = Dissatisfied

3 = Neither Satisfied nor Dissatisfied

4 = Satisfied

5 = Highly Satisfied

Questionnaire for Employees of banks: A five point Likert scale starting from strongly disagree to strongly agree (1 – 5) was used for the study.

1= Strongly Disagree,

2= Somewhat Disagree,

3= Neither Agree nor Disagree,

4= Somewhat Agree,

5= Strongly Agree

Questionnaire 1

The first questionnaire was developed to know about the perception of the customers of the ten leading banks about the quality of service provided by these banks. The questions were based on the SERVQUAL method with slight modifications done to make it more suitable and relevant to the banking parlance. Five dimensions were selected to know the perception of the customers about the quality of service provided by the private sector banks, i.e. Tangibility, Reliability, Responsiveness, Assurance and Empathy.

Questionnaire 2

The second questionnaire was developed to measure the emotional intelligence of the employees of ten leading banks on a five point Likert scale. Five dimensions were selected to assess the emotional intelligence of the employees of the private sector banks, i.e. Self-Awareness, Managing Emotions, Self-Motivation, Recognizing the Emotions of Others and Handling Relationship.

4. Results & its analysis

Overall Perception of Customers on Five Dimensions of Service Quality

The combined result of various parameters of five dimensions of service quality are shown below mention table

Table 1
Overall perception of service quality

As shown above in above mentioned table the list of banks is arranged in ascending order of the results. Axis Bank tops the list and Federal Bank is at the last of the list.

Overall Perception of Bank Employees on the Five Dimensions of Emotional Intelligence

The combined results of various parameters of five dimensions of emotional intelligence are depicted in Table 2.

Table 2
Overall perception of Emotional Intelligence

As shown above in the table the list of banks is arranged in ascending order of the results. Axis Bank top the list and Federal Bank is at the last of the list.

Correlation

Emotional intelligence of the employees of ten leading banks was correlated with the dimensions of service quality and the following results were gathered:

AXIS Bank

Table 3
Coefficient of Correlation

There is a very high degree positive correlation (0.978) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of AXIS Bank. 

Federal Bank

Table 4
Coefficient of Correlation

There is a moderate degree positive correlation (0.725) between emotional intelligence among banking.

HDFC Bank

Table 5
Coefficient of Correlation

There is a high degree positive correlation (0.946) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of HDFC Bank. 

ICICI Bank

Table 6
Coefficient of Correlation 

There is a very high degree positive correlation (0.965) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of ICICI Bank. 

IndusInd Bank

Table 7
Coefficient of Correlation 

There is a moderate degree positive correlation (0.739) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of IndusInd Bank. 

IDBI Bank

Table 8
Coefficient of Correlation

There is a high degree positive correlation (0.782) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of ING Vysya Bank. 

Jammu and Kashmir Bank

Table 9
Coefficient of Correlation

There is a moderate degree positive correlation (0.758) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of Jammu and Kashmir Bank. 

Karnataka Bank

Table 10
Coefficient of Correlation

There is a high degree positive correlation (0.763) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of Karnataka Bank.

Kotak Mahindra Bank

Table 11
Coefficient of Correlation

There is a high degree positive correlation (0.81) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of Kotak Mahindra Bank. 

YES Bank

Table 12
Coefficient of Correlation

There is a moderate degree positive correlation (0.676) between emotional intelligence among banking employees and service quality of private banks as perceived by customers of YES Bank. 

Regression Analysis

For testing the hypothesis empirically, emotional intelligence was taken as an independent variable and service quality was taken as a dependent variable. The hypothesis was tested through linear regression.

Table 13
Linear Regression

The coefficient of correlation of Axis Bank, HDFC Bank, ICICI Bank is high while it is low for YES Bank.

P Value

The p value in case of all the selected banks by the researcher is 0.000 < 0.05 showing that our hypothesis ‘Higher Emotional intelligence is a predictor of higher service quality in banking sector’ and ‘Higher level of Emotional intelligence increases trust and service quality’ have been accepted

5. Conclusion

Banks must re-evaluate how customers understand bank services therefore on determining whether or not the bank meets or exceeds or is below the expectations of their customers. Such an appraisal, however, could be a deadening task as a result of client service is complex in nature and dynamic in action. Moreover, it will dissent greatly from one branch to a different. Also, what's ‘unique service’ these days could become ‘indifferent service’ tomorrow and ‘bad service’ consequent day. Regular client surveys, therefore, throw light on the approval and improvement of the service quality in banks.

Customer services should be associated with marketing efforts, otherwise a client would remain dissatisfied and every effort of promoting can go down the drain. The method of fulfilling clients’ wants, therefore, needs personalized banking services to provide what customers would really like, and instead of pressurizing them to settle for what banks can provide them. The needs and expectations of the client changes with the passage of your time and, as such, new service’s development and modification of existing services is very essential. Today, customers are approachable with the standards of international banking and expecting the service quality from Indian banks.

Banks must have to understand the consumer needs, their expectations and aspirations to create a strong image in consumer’s mind. Banks ought to have a powerful client relationship management system that help them to understand clients desire while interacting with him, so that they can cross sell their services as per consumer requirement.

Human resources play a vital role in managing growth and continuity in the banking sector. The private sector banks enjoy this benefit in comparison to Public Sector Banks. The employee’s skill requires up gradation with the most recent technology, which will raise their comfort level and communication skills while interacting with customers in their day to day transactions. Banks can develop a feedback system to understand client expectations so that they can increase the level of client’s satisfaction. This may enhance their service quality to a great extent.

Studies confirm that people with high Emotional Intelligence are the best and finest performers and have high levels of interpersonal skills and thus are more satisfied and contended at work. Emotionally balanced employees are concerned, self-confident, adaptable, self-aware, cheerful, transparent, optimistic, inspirational leaders and good at managing disagreements and stress. With strong Emotional Intelligence a person can control, direct, lead and manage his or her own moods and impulses, and communicate with others in a better way and much effectively. An individual with high Emotional Intelligence are good problem solvers and fine decision makers. They can proficiently prioritize their tasks and quickly realize their goals.

Emotional intelligence by itself will not assure higher profits or good performance in the organization or greater market share as the corporations are too multifaceted and complex, no single interference will heal every ill. But the way people work together, coupled with technical expertise and the ability to form a burly network can be improved to help teams steer past the unavoidable bottlenecks and thus speed up the time it takes to accomplish the organizational better performance and goals. In this way, superior emotional intelligence may be thought of as having a catalyzing effect, it helps to force intellectual capital, and that is a crucial ingredient to achieving competitive advantage as well.

Now the Conclusion of the study based on the basis of result analysis are as follows-

Employees of selected banks are emotionally intelligent and they use this skill to improve their service quality.

Customers are satisfied with the service quality of the banks.

Service quality is directly proportion              to emotional intelligence of the service providers, higher will be the emotional intelligence better will be the service quality.

Better service quality develops trust among the employees and thus enhancing customer loyalty.

Some dimensions of emotional intelligence may be inbuilt in the employees while rest may be developed by frequent training programs.

Although most of the private sector banks are providing good services to their customers, but HDFC and ICICI lead in providing best services to their clients.

Service organizations need to regularly improve their service quality, clarity in the service procedure in order to attain success and growth consistently.

 Ambience and Infrastructure facilities also attract a range of good services.

Limitations of the Study

In some cases there is an issue of social desirability which develops the tendency in some individuals to respond or to present themselves in an ideal light, paying little attention to their actual emotions around a particular question. This propensity is dangerous, on account of its capability to bias the answers of respondents.

Cultural differences can also bring down the emotional intelligence scores of respondents. Society is liable to influence the definitions, expressions, measurements, estimation and perceived value of EI. Society is additionally impacted that how an individual respond and self-direct his feelings. How and when 'nice experience' converted into “bad experience. There are divergent styles of overseeing feeling or emotions.

The scope of this research is limited in investigating the relationship between Emotional intelligence and service quality only.

Bibliographic references

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1. Assistant Professor in Department of Management . Moradabad Institute of Technology, Moradabad. Email: smritagupta29@gmail.com

2. Assistant Professor in Department of Management Studies. Teerthanker Mahaveer University, Moradabad. Email: vibhorjain7@gmail.com

3. Research Associate in Faculty of Management Studies, IBCS. SoA (Siksha ‘O’ Anusandhan University), Bhubaneswar, India. Email: info.subhankardas@gmail.com *Corresponding author