From Training to Service-Quality Behavior: The Moderating Role of Employee Engagement in Frontline Banking

Commercial banks operate in competitive and customer-driven environments where frontline employees shape service-quality perceptions during daily interactions. Despite substantial investments in competency building in terms of employee training, many banks continue to face complaints relating to responsiveness, communication, complaint handling, and service consistency. This study examines the relationship between competency building in terms of training and service-quality behavior among frontline employees in commercial banking and investigates the moderating role of employee engagement. Drawing on Human Capital Theory, the Job Demands-Resources model, and Social Exchange Theory, the study adopted a longitudinal survey design involving frontline employees of a leading commercial bank in Sri Lanka. Data were initially collected from 150 frontline employees using pre-training and post-training surveys. A two-day specially designed competency-building intervention was developed using Subject Matter Expert input and evaluated through pre-training and post-training surveys administered one month apart, consistent with Kirkpatrick’s learning and behavioral evaluation perspectives. Competency building was operationalized through product knowledge, multitasking, problem solving, timeliness in serving, social etiquette, and personal appearance. Employee engagement was measured using the Utrecht Work Engagement Scale (17), while service-quality behavior was measured using an adapted SERVQUAL-based behavioral instrument supported by critical incident scenarios reflecting actual banking situations. SPSS was used for descriptive statistics and paired sample t-tests, while SmartPLS was used for PLS-SEM analysis. The findings revealed that product knowledge, multitasking, problem solving, and social etiquette significantly influenced service-quality behavior. Employee engagement strengthened several competency-behavior relationships, particularly those involving product knowledge, problem solving, timeliness, and social etiquette. The study contributes to training-transfer, engagement, and service-quality literature by showing that competency development alone is insufficient unless employees are psychologically engaged to apply acquired competencies in demanding service environments.