ASSESSMENT OF CUSTOMERS’ PERCEPTION ON SERVICE QUALITY: A CASE STUDY ON COMMERCIAL BANK OF ETHIOPIA

Abstract

The success of any business organization depends on its ability to deliver a service which meets or exceeds customers‟ expectation. Thus, this study was set to measure the service quality performance of Commercial Bank of Ethiopia under South Ababa District by considering Service Quality Dimensions /Attributes/, i.e. Tangibility, Reliability, Responsiveness, Assurance, Empathy, Commission & Charges to the Service, and Access to Facilities, on customers‟ perception. The target population for the study was customers of CBE found in South Addis Ababa District. The researcher applied quantitative research approach. A 5-point standard Likert scale questionnaire were distributed to 400 sample customers in 10 selected branches found in CBE under South Addis Ababa District. The branches have been selected based on their grade level, grade II, grade III, grade IV and one special branch. Validity & Reliability of questions in the questionnaire has been tested and consequently Importance Performance Analysis /IPA/, Spearman Correlation, Multiple Linear Regression Analysis were carried out using SPSS to test the relationship and impact of service quality dimensions and customers perception. The study determined that service quality dimensions /attributes/ have an impact on customers‟ perception. The result disclosed that out of the assessed service quality dimensions Responsiveness was the most significant factor on customers‟ perception, followed by, Empathy, Access to Facilities and Tangibility. In addition IPA analysis result discloses that; Tangibility, Reliability & Access to Facilities showed the highest performance gaps valued against their importance. So, based on the findings of the study the bank has to make an improvement on its branches through; by creating good working environment, by implementing and monitoring the service delivery standards, strongly work on attitude of its staffs to have better insight about importance of customers, implement extended working hours, reduce waiting time of customers and improving appearance of the branch, would help the bank to enhance the service quality in order to meet and surpass the requirement of the customers. Thus the management of Commercial Bank of Ethiopia need to work hard, give due attention to improve the observed gaps, and work on recommendations in order to retain its customers and to be profitable.