AN EMPIRICAL STUDY OF PERCEIVED QUALITY SERVICE: APPLICATION [605188]

AN EMPIRICAL STUDY OF PERCEIVED QUALITY SERVICE: APPLICATION
IN ALGERIAN PUBLIC SECTOR

GRAA Amel ٭a, LABAIR Sihem ٭b, EZZINE Abdelmajid ٭c
a [anonimizat]
b lasiahme [anonimizat]
c [anonimizat]
٭Faculty of economic and management , Djillali Liabes University , Algeria

Abstract :
The primary aim of the study is to examine the effect of perceived quality service on users’ satisfaction for
making the appropriate management strategy in public sector. This study proposes to exploit a hybrid model
which offers a comprehen sive guide to both measure and manage the perceived quality of public service
called PSQ model. The study is based on a sample of 298 users of National Social Insurance Fund services
in Algeria. The research uses structural equation modeling (SEM) to analy ze and confirm the conceptual
model proposed in the research. SEM technique is also used for concurrent assessment of both reliability
and validity. As the conceptual model is relatively complex, a partial least squares (PLS) approach was
employed using th e Smart PLS software. This paper finds that reliability, insurance, relations and ethics
have a significant effect on satisfaction user. Instead, the transparency of the decisions taken by service
personals and the tangibility of used materials are not imp ortant for users. The study suggested an
appropriate quality service management for Algerian user in the context of public sector. The paper would
help administers to control performance and improve quality service to satisfy the citizens .
Keywords : Quali ty Service, Public sector, Satisfaction, Algerian user, SEM technique.
1. INTRODUCTION
The public sector is a part of economic life, not in private ownership, that deals with the production,
delivery, and allocation of basic public goods and services . It m ay exist at any of four levels: global,
regional, national, or local. Its processes and structures can take the form of direct administration, public
corporations, and partial outsourcing. Its activities are funded through government expenditure financed b y
taxes, and government borrowing, or through grants. (Serrat , 2010)
Often, public service users are not satisfied with the quality and value of the services that they
receive. They complain about response delays , incompetent staff, poorly oriented request , long period of
waiting, unnecessary and complicated procedures, etc. In this situation , the successive reforms of the public
service have stressed the need to take better into account the users' requests . The thought on the role of the AN EMPIRICAL STUDY OF PERCEIVED QUALITY SERVICE:
APPLICATION IN ALGERIAN PUBLIC SECT OR

user in public ser vices design is a new topic in Algeria. Indeed the public service is not positioned in a logic
of competition and customer loyalty, but authority in Algeria often remember on public forum, that the role
of administrator, whatever their status in the hierar chy, is to facilitate the daily lives of Algerians " This is to
restore the trustfulness of the Algerian citizen on the institutions of his country. The gap between the citizen
and the administration now is large".
These developments certify to a profound p aradigm shift: indeed, in the theory of public services
exposed by Duguit, improving relations between the users and the public service can only be undertaken on
a legal mode since it devolve on legislator only to know the general interest and thus to defi ne the
expectations of users (Didry , 2005) . Therefore, q uality of service expresses the conformity with the law. But
today the repository of public service is not only law application but also taking into account the needs of
beneficiaries.
From the litera ture review, it is evident that worldwide studies support the statement that service
quality is the precursor of satisfaction (Brady and Robertson , 2001; Sureshchandar et al., 2011) .
Additionally, providing service in public sector are more complex because it is not only a matter of meeting
the stated needs but also finding out the stated needs, setting the priorities, and allocating public resources
(Ernani , 2014) . Zamil clarifies that the government has customers and the customers are the citizens,
busine sses sector, public and private employees. Government through agencies, departments, and ministries
delivers information and services for each customer and this customer contributes his evaluation to the
performance provided (Zamil , 2011) .
In this study, we propose to examine the quality service in Algerian public sector and in particular in the
National Social Insurance fund better known by its French language acronym (CNAS) which has as mission
amongst many others to ensure within the framework of the g eneral government policy, to pay out the
various benefits provided for by the legislation of the family and social protection. The said mission is
translated concretely by paying social benefits to workers or their rightful claimants: family benefits, old -age
invalidity and death pensions, industrial accidents and occupational diseases compensation.
We propose also the application of a hybrid model “PSQ model ” which offers a broad guide to both measure
and manage the perceived quality of public service. Th is model is developed by Guenoun & Goudarzi

(2010) that combines the legal model proposed by Sabadie (2003) with some elements from the
SERVQUAL quality model of Parasuraman et al. (1985, 1988) .
The study is based on a sample of 298 users of National Soci al Insurance fund services in Algeria. The
research uses structural equation modeling (SEM) to analyze and confirm the conceptual model proposed in
the research. SEM technique is also used for concurrent assessment of both reliability and validity
(Kushwah a and Agrawal , 2015) . As the conceptual model is relatively complex, a partial least squares (PLS)
approach was employed using the Smart PLS software.
In this sense, the current study aims to assess the impact of service quality as it perceived by the user s on the
their satisfaction by using the 6 dimensions of PSQ model
2. LITERATURE REVIEW AND HYPOTHESES DEVEL OPMENT
2.1. SERVICE QUALITY AND SATISFACTION
In general, the quality recognized like comparison between expectations of users towards the service
provided and its real performance. According to Grönroos , the customer assesses the service quality based
on two dimension s: the technical dimension and the functional dimension (Gronroos , 1984) . The technical
dimension is relative to the result of the bene fit, to the profit that the customer receives the experience of
service finished once. The functional dimension makes reference to the process in i tself, to the way of which
the experience of service is lived by the customer (quality of the interaction wit h the staff of contact , quality
of the environment) (Gronroos , 1984) . Quality refers to something whether it is good or not (Roslan et al.,
2015) . However, several practitioners define the quality from different expectations of users towards the
services p rovided with the perception of the service received (Munusamy et al., 2010) .
The origin of the term satisfaction is latin: satis (enough) and facere (to make); which means to
provide what we search for until it is "enough" , that is also the sense found in the dictionary Larousse"
contentment, pleasure that results from the achievement of that we one waits, of that that we desire." It
means that there will be satisfaction if and only if the product or service have exactly provide to the
consumer what he wished. What it is necessary to know also is that satisfaction is based on perceptions and
expectation s (Zeithaml et al., 2009) .

As explained by Gauthier , it is a subjective feeling that can only exist if the customer realizes that
there was an event of servi ce, and that doesn't exist in the absolute, but only on a comparative basis. (
Ayouaz , 2008)
2.2. SERVICE QUALITY IN PUBLIC SECTOR
The public services would conceive the population extensively in its life of every day: school, health,
urban and railway t ransportation, collection of the garbage, electricity and distribution of water, cultural
activities, quality of air, etc. The different activities of public service take a part important of economic
resources of the country, where the public services are the investors, the consumers, the producers and the
employers of first plan.
Beyond technical tasks that they fill, the public services play a role to oppose poverty, to promote the
equality of citizens and to fight the inequality . They are the center of important social stakes; and since
about twenty years, some important changes occur within the public services with privatizations . The
possible alternatives are presented depending on whether the state exercises himself the service or a private
enterpris e. The privatizations of the last years have been led while making the hypothesis that a public
service delegated to a private enterprise is more efficiency that the one done directly by a public institution.
Various juridical -economic principles apply to the public services (Kessas , 2010) :
 The principle of continuity of the service: go at emergencies anytime.
 The principle of equality of the citizens in front of the public service: while forbidding all discrimination
(each one must be treated identical ly whatever is his origin and his social situation);
 The principle of neutrality: the services publics working for general interest and no for particular
interests, this principle achieves the universality of the service;
 The principle of adaptation of t he public service to the evolution of the general interest: the adaptation of
new needs; the general interest drives for example to new public services or technical modifications like
disappearance of the bath -shower because of the apparition of the shower s in the lodgings.
 The principle of exemption from payment: who can exist in some cases, like vaccination of the children;

 The principle of transparency: it is as well the right of access to the administrative documents . For
example a patient has the r ight to see the nurse file and all what concerns their state of health in an
establishment.
Ovrertveit summarizes the complexity of a definition of the quality public services while underlining
that this one cannot be technical but politic al: "A quality pu blic services is not one which just produces
happy customers, but is one which has to meet other higher level regulations and do so economically "
(Ovrertveit , 2005) .
There is four types of needs to satisfy in the public sector : (1) Needs of us age: water, security, lodging,
employment , transportation, education… ; (2) Needs of associated services : information, simplicity,
personalization, confidentiality, rapidity , claim …, (3) Needs of society : social cohesion , territorial,
sustainable development, citi zenship… , (4) to the just cost: need of tax payer and/or the customer. (Touati ,
2009)
The multiplication of these new rights mentions the emergence of a principle of quality of the public service
that includes two specifics requirements (Maisonas, 2003) :
 Accessibility management in the public services doesn't summarized in planning of the local and the
timetables of opening. On one hand, it is about adapting the offer of service to the different social
and geographical situations of the users to re -establish the equality of access to the service; on the
other hand, it is about reinforcing the legibility of the action while making the information more
available and simplifying the administrative steps.
 Improvement of administrative service passes by a better receptiveness of the users and a more
rapidity of action. On one hand, by improv ing the monitoring facilities , to reinforce proximity and on
the other hand by accelerat ing the administrative action and to sanction his delay.
Sabadie sum up this evolution of the public service principles and identified four specifics measurements of
the public service quality (Sabadie , 2003) :
 Equality of treatments: the users placed in a similar situation must be treated in the same way.
 Participation : the c onsideration of user’s opinion s, or of their representatives, for the d efinition of the
service offer.
 Management of the claims : setting of a complaint process and the consideration of this complaint.

 Transparency: the information provided to the use rs on the actions of the public service in general
and on the treatment of their demand in particular.
2.3. PSQ MODEL
The PSQ model is an operational measurement tool allows a hybrid analysis of the SERVQUAL
model and the specific measurements of the pub lic services. This model suggest to combine four
principles of the public action (legal model) retained by Sabadie (2003) and five measurements of the
SERVQUAL model (Parasuraman et al. 1985; 1988) descended of the service marketing or what it
called clien t model. The model propose d also an instrument to measure the users’ global satisfaction .
Directly operational, the PSQ model can be integrated to the present mode of piloting of the public
performance while valuing and piloting each of the measurements of public services quality from user’s
perceptions. This model can complete the measures of other devices commonly used in the public
organizations, based on the norms of service .
After analysis of taken data ; the author s keep 31 items and retain 6 measure ments of the of public
services quality for measur ing global satisfaction (Goudarzi and Guenoun, 2010) :
 The first dimension called "Relations ". It is measured from the items descended of measurements
“obligingness ” and “empathy ” of the SERVQUAL model (9 items). This dimension makes reference to
the relations that the users maintain with municipality staff.
 The second dimension called "Transparency ". It is measured from the items descended of
measurements transparency and complaint of the legal model (6 items). This dimension makes reference
to the transparency in the offer of the services as well as i n the resolution of the problems.
 The third dimension called “Reliability ". It measured from the items descended of the measurements
reliability of the SERVQUAL model (4 items) and participation of the legal model (3 items). So the
participation of the users in the offer of the municipal services is associated to the reliability of the
global service to form a coherent whole.
 The fourth dimension call ed "Tangibility ". It is measured from the items descended of dimension
tangibility of the SERVQUAL model (4 items). This dimension makes reference to the material
facilities of the municipality .

 The fifth dimension called "Insurance ". It corresponds to one measurements of the SERVQUAL
model and makes reference to expertise and to the courtesy of the employees (3 items).
 The sixth dimension called "Ethics ". It is measured from the dimension equality of the treatments of
the legal model (2 items)
2.4. RESEARCH HYPOTHES ES
Based on the literature review, it can be concluded that the hypotheses are as follows:
H1. Assurance has a positive and significant effect on user satisfaction.
H2. Reliability has a positive and significant effect on user satisfac tion.
H3. Transparency has a positive and significant effect on user satisfaction.
H4. Relations have a positive and significant effect on user satisfaction.
H5. Tangibility has a positive and significant effect on user satisfaction.
H6. Ethics has a positive and significant effect on user satisfaction.
3. METHODOLOGY
3.1. MEASUREMENT INSTRUME NT
The questionnaire was the same as the Goudarzi and Guenoun (2010) instrument with a 5 -point Likert
scale . By elimination of some items and that for accurate t he questionnaire with the study scope, t he final set
of 22 items was examined by an academic experienced in questionnaire design. After, it was subsequently
piloted with 15 persons among CNAS services users to ensure that the questions and response formats were
clear. Minor modifications were made based on feedback from the pilot study.
The final questionnaire consisted of three sections. In the first section, questions were related to public
service dimensions. The second section contained items measuring the user satisfaction degree. In the both
sections the items were put on a five -point Likert scale where a value of 1 expresses strongly disagree and a
value of 5 expresses strongly agree. The third section contained questions regarding demographic
charac teristics of the respondents such as gender, age, education, seniority and occupational category.
3.2. SAMPLE AND DATA COLL ECTION

Testing the suggested research hypotheses was accomplished through a convenience sample survey of 5
different CNAS agencies of Sidi Bel Abbes state (Algeria West). The respondents filled up the questionnaire
within the months of April –June, 2015. Total of 315 questionnaires were received out of which 298 were
found to be completely and accurately filled, the rest 17 were discarde d due to incomplete information.
Respondents were the service users of different 5 agencies. The detailed sample characteristics are shown in
Table 2.
4. DATA ANALYSIS AND FINDINGS
The study used structural equation modeling (SEM) to test the conceptual mo del. SEM is a second
generation multivariante data analysis method that is often used in marketing research because it can test
theoretically supported linear and additive causal models (Wong , 2013) . It is also useful for concurrent
assessment of both reli ability and validity. As the conceptual model is relatively complex, a partial least
squares (PLS) approach was employed using the SmartPLS software (Chin , 1998) .
4.1. SCALE VALIDITY A ND RELIABILITY
To evaluate the construct validity of each latent constru ct, a confirmatory factor analysis (CFA) was
conducted by investigating the convergent validity and discriminant validity. Convergent validity is tested
by examining the factor loadings and the average variance extracted (AVE) which should be greater than
0.50 for both (Lin and Ding , 2006) . Discriminant validity has been assessed using the square root of AVE
which should be exceed the construct correlations with all other constructs. The constructs' internal
consistency can be measured for all scales throug h Cronbach's α as well as a measure of composite
reliability (CR) and should be exceed the recommended threshold criterion of 0.70 for both (Wong , 2013) .
The data presented in Table 2 and Figure 2 show that all items had significant loadings onto the
respe ctive latent constructs with values varying between 0.761 and 0.941 and the AVE for all exceeded the
recommended level of 0.50 (Bagozzi and Yi , 1988) CR and Cronbach’s α of all the latent variables are
greater tha n the acceptable limit of 0.70 .
Table 3 ill ustrates the values of the square root of the AVE are all greater than the inter -construct
correlations. Thus, the measurement model reflects good construct validity and reliability.

4.2. STRUCTURAL MODE L ANALYSIS
4.2.1. MODEL ASSESSM ENT
SEM is a compreh ensive statistical technique for examining relations between observed and latent
variables. To evaluate the model within SmartPLS software , we must used the goodness of fit (GoF) index
which is calculated by the geometric mean of the average communality an d the average R² (for endogenous
constructs) (Henseler and Sarstedt , 2013) . The R² is the coefficient of determination, it refers to the
exploratory power of the predictor variable(s) on the respective construct .
In the present study, the calculated value of AVE= 0.73 and R²= 0.67. For the model, a GoF value is 0. 7,
which indicates that a very good global model fit with the data collected.
As multicollinearity can affect the results, the study examined the tolerance and variance inflation factor
values (VIF ) for multicollinearity assessment. To assess collinearity issues of the study model, the latent
variable scores (calculated by SmartPLS) can be used as input for multiple regressions in SPSS software to
get the tolerance and VIF values, as SmartPlS does n ot provide these numbers (Kushwaha and Agrawal ,
2015) . As presented in Table 5, the variables had no VIF values above 5 and tolerance level greater than 0.2
(Grewal et al., 2004) , so there is no multicollinearity between the independent variables. Hence, w e
proceeded to examine the study model shown in Fig ure 1.
4.2.1. HYPOTHESES TE STING
Bootstrapping with 2000 resample was done to derive t -values for significance testing of the structural
path (Chin , 1998) . Standardised path coefficients (β), t -statistics, and associated significance levels for all
relationships in the study model are presented in Table 4 and Figure3 . Using a two -tailed t -test with a
significance level of 5%, the path coefficient will be significant if the t -value is larger than 1.96 (Chin , 1998) .
The results indicated that Insurance (β=0.168; p<0.05), Reliability (β=0.229; p<0.05), Relations (β=0.339;
p<0.05) and Ethics (β=0.211; p<0.05) had a positive and significant effect on user satisfaction . Thus, H 1, H2,
H4, and H 6 were accepted. However, transparency (β= -0.078; p>0.05) and tangibility (β=0.081; p>0.05)
showed no significant effect on user satisfaction . Therefore, H 3 and H 5 were rejected.

5. DISCUSSION AND MANAGERIAL IMPLICATI ONS
The perceived quality of service for the social insured represents an important dimension on his
satisfaction and a credible indicator to put in evidence as well as to correct some dysfunctions in the
National Social Insurance fund “CNAS ”.
The purpose of the study was to demonstrate the most important elements of perceived quality service
that influenc e Algerian user in the context of public sector. The present study examined the PSQ model to
confirm and explain the mentioned relationship and SEM technique was then applied to test the model with
a 2000 subsamples bootstrapping procedure using the SmartP LS software .
The results indicate that the quality as it perceived by the CNAS users has a meaningful and important
effect on their satisfactions. This perceived quality who are not measurable directly , is determined by six
measurements that are:
 The rel ation that the users maintain with the staff of the CNAS.
 The reliability that makes reference to the capacity discerned of the beneficiary to achieve the service
promised
 The insurance that makes reference to expertise and to the courtesy of the CNAS employee and his/her
ability to inspire confidence.
 The ethics that makes reference to the equality in treatment of the social insured.
 The transparency of the information provided to the social insured on the actions of service of the
CNAS and on th e treatment of their demands in individuals.
 The tangibility that makes reference to the material facilities, and to the staff's appearances.
The findings show that there exists a need for a different view of every single dimension of the
perceived quali ty service . The study found relation; reliability; insurance and ethics had a positive and
significant effect on user satisfaction. However, transparency and tangibility had no significant effect on
social insured satisfaction. We can conclude that the social insured sees and judge s the services of the CNAS
with a big emotional part that cognitive.
The results of the analysis indicated that among the different dimensions addressed in the model, the
relation had t he most (β=0 .339) impact on user satisfaction , followed by reliability (β=0 .229) and ethics

(β=0.211) . On the other hand, insurance (β=0.147) had a small effect on social insured satisfaction among
them (see Table 4).
The present study uses PSQ model to m easure Algerian users ’ perceived quality service and satisfaction
since it has been not frequently used for evaluat e the quality service in public sector . However, this research
confirms that this model is compliant with the theory and we have verified its validity. Therefore, it can be
considered like an initiative to other structural models in order to establish, shortly, of new studies and
research in the domain. On the managerial level, this model gives a new lighting to the local decision –
makers in ord er to integrate it for piloting the public service performance.
There are several boundaries of current study that should to address in near future. The data were collected
only among CNAS users therefore these findings cannot be generalized to the entire Algerian public sector .
Also, this research has been conducted in limited region (Algeria’ west).
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Figure 1

Figure 2 Ethics

H1 Insurance

Reliability

Transparency

Relations
Tangibility
H2 H6
H4 H5 H3 Satisfaction

Figure 3

Figure s List
Figure 1. Concep tual Model
Figure 2. Structural and measure Model with application of PLS algorithm
Figure 3. Impact of quality service dimensions on satisfaction (Application of PLS algorithm)

Table 1
Frequency Percent Cumulative %
Gender Male 134 44.8 44.8
Female 165 55.2 100
Age 18- 30 49 16.4 16.4
30-40 89 29.8 46.2
40-60 149 49.8 96
More than 60 years 12 4.0 100
Seniority Less than 5 years 65 21.8 21.8
5-15 83 27.9 49.7
15-25 68 22.8 72.5
25-35 62 20.8 93.3
More than 35 years 20 6.7 100.0
Occupational
category Active insured 209 69.9 69.9
Pensioner 31 10.4 80.3
Employer 50 16.7 97
Particular category 9 3.0 100
Education Illiterate 16 5.4 5.4
Middle education 117 39.2 44.6
High education 165 55.4 100

Table 2
Construct Items Factor loading AVE CR Cronbach’s α
Insurance 0.7445 0.8973 0.8287
Assu1 0.825
Assu2 0.887
Assu3 0.875
Reliability 0.7449 0.9211 0.8856
Relia1 0.848
Relia2 0.857
Relia3 0.895
Relia4 0.851
Transparency 0.8952 0.8952 0.8541
Trans1 0.821
Trans2 0.842
Trans3 0.773
Trans4 0.761
Trans5 0.767
Relations 0.7153 0.9095 0.8673
Rela1 0.851
Rela2 0.849
Rela3 0.848
Rela4 0.838
Tangibility 0.8796 0.8796 0.8204
Tang1 0.771
Tang2 0.842
Tang3 0.816
Tang4 0.780
Ethics 0.8743 0.9329 0.8563
Ethi1 0.929
Ethi2 0.941
Satisfaction 0.7750 0.9118 0.8548
Sati1 0.880
Sati2 0.875
Sati3 0.886

Table 3

Note: a Diagonal elements are squared AVE; off -diagonal elements are the correlation between constructs.

Table 4
Path Coefficient (β) t-values Tolerance VIF Results
H1: Insurance → Satisfaction .168 3,056 .368 2.717 Accepted
H2: Reliability → Satisfaction .229 4,076 .355 2.814 Accepted
H3: Transparency→ Satis faction -.078 -1,433 .377 2.652 Rejected
H4: Relations → Satisfaction .339 5,129 .256 3.913 Accepted
H5: Tangibility → Satisfaction .081 1,854 .580 1.724 Rejected
H6: Ethics → Satisfaction .211 4,024 .406 2.464 Accepted

Table s list
Table 1. Sample profile
Table 2. Measurement model summary
Table 3. Measurement model summary
Table 4. Structural model estimates
Constructs Assurance Ethics Reliability Relation Satisfaction Transparency Tangibility
Insurance 0.8628
Ethics 0.5763 0.9350
Reliability 0.6356 0.6152 0.8631
Relations 0.7561 0.7388 0.6624 0.8458
Satisfaction 0.6936 0.6805 0.6840 0.7590 0.8803
Transparency 0.5250 0.6558 0.7038 0.6948 0.5826 0.7944
Tangibility 0.5418 0.3973 0.6088 0.4892 .5213 0.4886 0.8042