Effects of Job Satisfaction on Service Quality, Customer Satisfaction, and Customer Loyalty: The Case of a Local State-Owned Enterprise*

This study examines how customers can be maintained, which is a particularly important issue for service industry area. Customer service is important not only to private firms but also to public organizations. To improve service quality and maintain customers, organizations must ensure their employees’ job satisfaction. This study measures job satisfaction and examines its effects on service quality, customer satisfaction, and customer loyalty. We measured job satisfaction by considering a sample of employees from Daegu Metropolitan Transit Corporation (DMTC) who provide customer service and by employing various measures of job satisfaction based on previous research, including workplace environments, job content, relationships with coworkers, relationships with supervisors, pay and benefits, and performance assessments. We measured service quality by using a SERVQUAL item developed by Parasuraman, Zeithamal, and Berry [42]. We conducted a survey of customers who used the city train at least once and adapted the items for customer satisfaction and loyalty from previous studies. Most studies have focused on railway facilities and management (e.g., safety systems and emergency management) after the DMTC subway tragedy in 2003. In this regard, this study is the first to explore the service quality of DMTC’s subway system. This study is particularly meaningful in that it relates job satisfaction to service quality. The results indicate the following: First, job satisfaction partially influenced service quality. Performance assessments, relationships with co-workers, and pay had significant effects on service quality, whereas supervisor relationships, job content, and workplace environments had no significant effects. Second, among the dimensions of service quality, tangibility and reliability had positive effects on customer satisfaction. Finally, customer satisfaction had a positive effect on customer satisfaction. Key-Words: Job Satisfaction, Service Quality, Customer Satisfaction, Customer Loyalty