Employees' perspective of organizational service quality orientation: Evidence from Islamic banking industry

Internal organizational orientation of service quality and its impact on service delivery performance of the employees have received considerable attention from financial management literature. The purpose of this paper is to address this issue by conducting empirical research focusing on the Pakistani Islamic banking industry. It conceptualizes and measures key determinants of internal organizational orientation of service quality from the employees' perspective.

The data were collected from a sample of 150 employees of pure Islamic banks and conventional banks with IBBs (Islamic Banking Branches or windows) across the entire country. The paper uses principal component factor analysis and regression methods.

Statistical results demonstrate that the employee perceptions of organizational service quality orientation mainly depends upon four main predictors: employees' perception about training and development; development and positioning of Islamic banking products/service concept; customer service orientation; and employees' service quality performance. Principal component factor analysis results indicate four predictive internal organizational service quality orientation factors (ISQF) where 16 per cent of the variation is being explained by employee perception of organizational orientation towards employees' training and development (ISQF1), 13 per cent variation explained employee perception of organizational orientation towards development and positioning of Islamic banking products/service concept (ISQF2), 11 per cent variation explained by employee perception of organizational service quality orientation towards customer service orientation (ISQF3), and 10 per cent variation explained employee perception of organizational service quality orientation towards employees' service quality performance (ISQF4).

Management of Islamic Banks in Pakistan need to be mindful about the fact that ISQFs identified by this study have the potential to indirectly influence customer perceptions through effective employees' recruitment and selection criteria, complemented by training to improve service oriented skills and knowledge development about Sh´ria principles related with the products/services offered by Islamic banks in Pakistan.