362 © 2023 Conscientia Beam. All Rights Reserved. Mediating effects of employees’ education on service quality and customer satisfaction: A study of resorts in Nepal Yadav Adhikari1 Jiban Khadka2 Mana Prasad Wagley3 Prakash C. Bhattarai4 Niroj Dahal5+ 1,3,4,5Kathmandu University School of Education, Lalitpur, Nepal. 1Email: yadav@kusoed.edu.np 3Email: profmana@kusoed.edu.np 4Email: prakash@kusoed.edu.np 5Email: niroj@kusoed.edu.np 2Nepal Open University, Faculty of Social Sciences and Education, Lalitpur, Nepal. 2Email: jiban@nou.edu.np (+ Corresponding author) ABSTRACT Article History Received: 11 May 2023 Revised: 6 September 2023 Accepted: 31 October 2023 Published: 13 November 2023 Keywords Service quality Customers satisfaction Hayes model Mediating effect Resorts Education status. This study was conducted to measure the mediating effect of employees’ education on their service quality and customer satisfaction at selected resorts in Nepal. Six components of the contextualized SERVQUAL instrument were used to measure service quality and customer satisfaction. All components of service quality were not significant, with a positive direction for all components of customer satisfaction. However, service quality in terms of responsiveness was positively correlated to all six components of customer satisfaction. Assumptions of regression analysis were satisfied with education status, service quality in terms of responsiveness, and customer satisfaction. Therefore, to measure the mediating effect of employees’ education on service quality and customer satisfaction, Hayes’ simple mediation process model and multiple mediation analysis model-4 were used in this study, taking service quality in terms of responsiveness. To justify the results, segregated effects of employees’ education status and its covariates were identified. In order to isolate the impact of employees’ educational status, six covariates were employed: gender, age, ethnicity, experience, training, and professional education. The desegregated mediating effect of education status was 16.26% positive change on the dependent variable, customer satisfaction, whereas the segregated effect was 11.32% employing a simple mediation process model and a multiple mediation analysis model, respectively. Therefore, a positive and significant mediating effect of employees’ education status was revealed on service quality in terms of responsiveness and all components of customer satisfaction in the resorts of Nepal. Contribution/Originality: The article studies how employees’ education influences service quality and customer satisfaction in Nepali resorts. It surveys 303 employees and customers and uses mediation models to analyze the data. It finds that education improves customer satisfaction through responsiveness, which is the key service quality factor. It advises resorts to hire and train educated employees. 1. INTRODUCTION In the Ministry of Culture, Tourism, and Civil Aviation (MCTCA), one hundred one (101) tourist standard resorts were registered in Nepal on March 10, 2021 (Department of Tourism, 2021). Among them, one is characterized as luxury, one is deluxe, and fifty-seven (57) are for general tourist residents (resorts). Forty-two are still undefined (Department of Tourism, 2021). In the Nepali hospitality and leisure sector, some of the customers report having experienced low service quality in different tangible and intangible encounters, especially in the standard tourist resorts (Bista, 2009). It is very sensitive and crucial for customer loyalty and satisfaction (Mustafa Humanities and Social Sciences Letters 2023 Vol. 11, No. 3, pp. 362-376 ISSN(e): 2312-4318 ISSN(p): 2312-5659 DOI: 10.18488/73.v11i3.3516 © 2023 Conscientia Beam. All Rights Reserved. https://orcid.org/0000-0001-8156-2520 https://orcid.org/0000-0002-7311-5779 https://orcid.org/0009-0003-2003-2085 https://orcid.org/0000-0003-4804-7492 https://orcid.org/0000-0001-7646-1186 mailto:yadav@kusoed.edu.np mailto:profmana@kusoed.edu.np mailto:prakash@kusoed.edu.np mailto:niroj@kusoed.edu.np mailto:jiban@nou.edu.np https://www.doi.org/10.18488/73.v11i3.3516 Humanities and Social Sciences Letters, 2023, 11(3): 362-376 363 © 2023 Conscientia Beam. All Rights Reserved. et al., 2022). Some resorts are still running without having their categories, such as general, deluxe, and luxury, defined by the government (Department of Tourism, 2021). Thus, the Ministry of Culture, Tourism, and Civil Aviation Department of Tourism (2014) observed that the quality of employees, quality of service, profitability, and legacy of the resorts were not up to the mark of their standard. Basically, service quality literature focused on improving the different tangible and intangible administered continuums and encounters (Khatoon, Zhengliang, & Hussain, 2020; Prasad, Wirtz, & Yu, 2014) of the hospitality industry but was not adequately focused on the impact of employees’ education on the relationship between service quality and customer satisfaction at the workplace (Andi, 2019). Therefore, a rigorous study in this context was essential to fostering the resorts’ performance. Likewise, the empowerment of employees in different organizations probably ensures better performance. Bello (2012) and Bello and Bello (2015) argued that the performance of employees is significantly correlated to service quality and customer satisfaction in the different service sectors, more importantly in the hospitality and leisure industry. The educational background, training, and professional experience of employees have a pivotal role in determining their level of empowerment. Within the realm of hospitality business, it is observed that employees assume the role of representing the organization, thereby serving as the primary point of contact between the consumer and the organization (Bello, Bello, & Ifegbu, 2017). However, due to the different schooling of the employees, Nepali resorts are not able to claim their legacy of quality service across the country (Ministry of Culture Tourism & Civil Aviation Department of Tourism, 2014). According to the report of the University Grants Commission (2022), 46.24% of students are pursuing management, 22.18% in education, 7.98% in the humanities, 2.28% in law, 0.53% in Sanskrit, and 0.06% in Buddhism in general higher education. Similarly, Science and Technology cover 8.30%, Engineering 5.56%, Medical Science 5.38%, Forestry 0.21%, Agriculture 1.03%, Arteriovenous Fistula (AVF) 0.16%, and Ayurveda 0.08% of technical higher education. Most employees and professionals are joining from the first and few from the second discipline of education in the hospitality and leisure industry. According to the Hotel Association Nepal [HAN] (2021), two hundred thousand direct and 1.2 million indirect jobs are possible in the tourism industry of Nepal. Among them, eighty thousand females are directly involved, and four hundred thousand are indirectly involved in the tourism sector (Hotel Association Nepal [HAN], 2021). Thus, most of the required employability in the hospitality, tourism, and service sectors is supplied by different existing schools, universities, and institutions, whereas Nepali resorts are not behind in this scenario. Service quality refers to how well a company delivers services that match or exceed the expectations of its customers (Okoeguale & Onobhayedo, 2022). It is a composite measure of the entire service system and its interactions with the customers, which involves the service environment, facilities, equipment, and the contact staff of the organization (Prasad et al., 2014). Many researchers, such as Khatoon et al. (2020), Parasuraman et al. (1985), and Parasuraman, Zeithaml, and Berry (1988), have defined service quality as meeting or surpassing the customer’s expectations. Parasuraman et al. (1985) proposed a SERVQUAL model that consists of five dimensions of service quality: assurance, empathy, reliability, responsiveness, and tangibles. Assurance means the knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy refers to the act of delivering compassionate and individualized care to clients. Reliability refers to the ability to consistently and precisely deliver the committed service. Responsiveness refers to the inclination to assist clients and del iver timely service. Tangibles mean the appearance of physical facilities, equipment, personnel, and communication materials (Williams, 1998). The contextualized SERVQUAL model includes an ‘Expectation’ dimension that captures the customers’ quality standards, brand standards, and experience-based norms, which was added through a modified Delphi technique. According to the literature, customer satisfaction refers to consumers' post-consumptive assessments of particular goods or services. The expectancy disconfirmation paradigm of Oliver (1980) compared the perceived performance of a product or service to the customer’s expectations to measure their satisfaction. Hence, the gap between performance and expectations statistically determines the customers' satisfaction. Bello et al. (2017) claimed, "If the perceived performance is less than the customer’s expectations, then customer is dissatisfied; if the Humanities and Social Sciences Letters, 2023, 11(3): 362-376 364 © 2023 Conscientia Beam. All Rights Reserved. perceived performance is exactly equal to the expectation of the customer, the customer is satisfied. Customers are said to be extremely satisfied when the perceived performance exceeds the customer’s expectation.” (p. 79). Therefore, statistically, satisfaction can be elaborated as the following equation: Dissatisfaction/Disconfirmation (-S) = (P < E) (1) Satisfaction (S) = (P = E) (2) Extreme Satisfaction (+S) = (P > E) (3) Whereas P = performance level of service quality (perceived performances of the customer), E = expectation level of service quality (expectations of the customer) in different organizational settings. Customers can be satisfied in two ways: by receiving services that meet or exceed their expectations or by receiving performances that match those expectations. The purpose of this paper was to measure the mediating effects of employees’ education on service quality and customer satisfaction at the resorts in Nepal. The researchers believe the worldview of a single reality is what allows them to employ the deductive research approach. Therefore, three major variables were considered to conduct this study. Service quality was considered an independent variable, customer satisfaction was dependent variable, and the education status of the resorts’ employees was the mediating variable in this regard. 2. LITERATURE REVIEW Service providers possess or are associated with service quality, whereas consumers who purchase a good or service to satisfy a desire possess or are associated with satisfaction. Different studies conclude their opinions on the relationship between service quality and customer satisfaction. Liljander and Strandvik (1995) argued that customer satisfaction and quality are parallel. Similarly, Andreassen (2000) stated that service quality is crucial to customer satisfaction. In general, the higher the service quality of different continuums or encounters, the higher the satisfaction of the customers. Similarly, lower service quality is an orientation towards evils for the loyalty and brand recognition of the property (Andaleeb, 2001). According to Prasad et al. (2014) and other academics, acquiring new customers costs around five times as much in terms of money, resources, and time as retaining existing ones. If this statement is accurate, customer satisfaction is the heart of the service industry. We are unable to conceive of existence without it. On the other hand, a positive and significant correlation was identified by Bello et al. (2017) between service quality and customer satisfaction. Thus, a proper understanding and extraordinary attention with a high monetary value of service organization and individualized service quality are essential to addressing customer satisfaction in the hospitality and leisure industries. The term education has a broad meaning. Service quality and customer satisfaction are assessments of the total administered service experience as well as the degree of education (empowerment) of employees inside an organization (Bello & Bello, 2015). Therefore, the employees are the name, fame, face, and voice of the organization and require adequate authority to make decisions on any matters concerning service delivery to customers (Bello et al., 2017). General and professional education as well as continuous training for quality service orientation is essential to employees’ empowerment. Bello (2012) suggested that education and training of employees did not lead to customer satisfaction without providing excellent services. Thus, for service quality, education and training have positive and significant effects like service quality and customer satisfaction. Employee education and training mould the quality service, which could lead to customer satisfaction (Bello et al., 2017). Hence, the researchers are satisfied by the literature to argue that education could have a positive mediating effect in various forms of organizational settings. To test this argument, this research could be fruitful in the context of Nepali resorts. 3. CONCEPTUAL FRAMEWORK This study adapted the concept from Parasuraman et al. (1985) contextualized SERVQUAL model. The six contextualized SERVQUAL components were used to measure the service quality from the perspective of the Humanities and Social Sciences Letters, 2023, 11(3): 362-376 365 © 2023 Conscientia Beam. All Rights Reserved. resort’s employees. The actual service quality that was perceived by the resorts’ customers was considered for the customers’ satisfaction. To meet or exceed the expectations of the customers on the six components of service quality, satisfaction was considered statistically as the result of perceived performance minus the expectations of the customers. The employees’ education status was used as a positive mediator between service quality and customer satisfaction at the resorts. If all components of service quality were fulfilled with empowered performance (employees’ education) as per the customer’s expectation, which was considered to lead to the customer’s satisfaction, which has been presented in the Figure 1: Figure 1. Components of SERVQUAL and satisfaction with employees’ education. The tangibility component of service quality covers the physical aspects of the resorts, such as the facilities, equipment, personnel, and communication materials. The reliability component measures how well the resorts can deliver the service they promise in a dependable and accurate way. The responsiv eness component reflects the readiness of the resorts to assist the customers and provide timely service. The assurance component assesses the level of expertise and professionalism exhibited by personnel, as well as their capacity to instill trust and inspire confidence in clients. The empathy component assesses how much the resorts care for and give individualized attention to their customers. The expectation component captures the quality standards, brand standards, and experience-based norms of the customers. Moreover, the education level of the employees is used as a mediator between service quality and customer satisfaction at the resorts. 4. RESEARCH QUESTION AND HYPOTHESIS RQ1: To what extent does the employee’s education have a mediating effect on service quality and customer satisfaction in the resorts of Nepal? H1: There is a mediating effect of employees’ education on the relationship between service quality and customer satisfaction in the resorts of Nepal. 5. RESEARCH METHOD 5.1. Research Design The quantitative survey design was employed in this research to make statistical inferences about the total population. Statistical inferences strongly depend on the survey questionnaire (Groves et al., 2009). Data are collected on quantitative scales and analyzed using statistical tools, and also hypothesis is tested for generalizable findings at a certain level of significance. 5.2. Population and Sample Most of the categorized resorts (81%) are established in the Bagmati province of Nepal (Department of Tourism, 2021). Therefore, 1320 employees working in the resorts of Bagmati province (Department of Tourism, 2021) are the units of the population to measure the service quality and employee education of this research. Satisfaction components: -Tangibility -Reliability -Responsiveness -Assurance -Empathy -Expectation SERVQUAL components: -Tangibility -Reliability -Responsiveness -Assurance -Empathy -Expectation Employees’ education Humanities and Social Sciences Letters, 2023, 11(3): 362-376 366 © 2023 Conscientia Beam. All Rights Reserved. Similarly, the number of guests visiting the resorts, out of those who stay at least one night, was the respondent's population to measure the customer satisfaction of the resorts. The sample for the study was collected from 303 respondent employees, and 303 respondent customers of different resorts were selected through a random sampling method. 5.3. Sources of Data Primary data was collected using structured survey questionnaires through Google Forms. Similarly, secondary data were used for the different related documents and relevant literature. The variables of this study were measured by analyzing the contextualized SERVQUAL instrument ’s question statement, which was constructed using the Modified Delphi Technique using 10 anonymous stakeholders and experts. The questionnaires were distributed to the respondents through online. 5.4. Data Analysis Tools The data were collected from the Bagmati province of Nepal using two sets of questionnaires. First is the Service Quality Survey Questionnaire (QSSQ) used to measure service quality. An extra section of employees’ demography was also included in QSSQ to measure the mediating effect of education. Second, the Customer Satisfaction Survey Questionnaire (CSSQ) was used to measure customer satisfaction. 6. RESULTS AND DISCUSSION 6.1. Cronbach’s Alpha The study used Cronbach’s Alpha to test the reliability of the questionnaires. 29 question statements were used to measure the service quality and customer satisfaction. More than 10% (31 employees and 32 customers) of samples were used for the pilot test to measure reliability and internal consistency. For validity, three stages of Modified Delphi Technique were conducted during the tool construction process. To assure reliability and internal consistency, Cronbach’s Alpha was identified for all components of service quality and customer satisfaction, which are presented in Table 1: Table 1. Alpha of QSSQ and CSSQ components. S.N. Components Items QSSQ alpha CSSQ alpha Performance Expectation 1. Tangibility 5 0.914 0.871 0.913 2. Reliability 6 0.980 0.897 0.968 3. Responsiveness 4 0.976 0.765 0.887 4. Assurance 4 0.937 0.867 0.945 5. Empathy 5 0.931 0.853 0.878 6. Expectation 5 0.952 0.717 0.908 7. Entire alpha 29 0.989 0.954 0.981 Cronbach’s Alpha of the entire components in QSSQ and CSSQ (performance and expectation) showed the results in all components of service quality and customer satisfaction were more than the acceptable level (α > 0.70) that showed QSSQ and CSSQ were valid and reliable tools (George & Mallery, 2003) to measure the service quality and customer satisfaction of the resorts. 6.2. Respondents’ Profile 6.2.1. Employees’ Profile Employees working in all categorized resorts in Bagmati province, including Luxury, Deluxe, and General, were the population. Therefore, 303 employees out of the 1320 population were the sample respondents to this study. Their demographic profile has been presented in Table 2: Humanities and Social Sciences Letters, 2023, 11(3): 362-376 367 © 2023 Conscientia Beam. All Rights Reserved. Table 2. Employees’ demography. Demography types Frequency Percent Cumulative percent Gender Male 184 60.7 60.7 Female 119 39.3 100 Age Up to 20 years 12 4.0 4.0 21 to 30 years 147 48.5 52.5 31 to 40 years 111 36.6 89.1 Above 40 years 33 10.9 100 Education status Illiterate 22 7.3 7.3 Literate 71 23.4 30.7 Basic 82 27.1 57.8 Secondary 100 33.0 90.8 Higher education 28 9.2 100 Experience Up to one year 26 8.6 8.6 2 to 5 years 140 46.2 54.8 6 to 10 years 93 30.7 85.5 11 to 15 years 26 8.6 94.1 Above 15 years 18 5.9 100 Ethnicity Brahmin/Chhetri 110 36.3 36.3 Madeshi 35 11.6 47.9 Janajati 112 37.0 84.8 Dalit 24 7.9 92.7 Others 22 7.3 100 Education type General education 248 81.8 81.8 Prof. education 55 18.2 100 Professional education 10+2 degree 85 28.1 28.1 Bachelor’s degree 30 9.9 38.0 Masters or above 9 3.0 40.9 Not received 179 59.1 100 Training duration Up to one week 54 17.8 17.8 15 days 88 29.0 46.9 One month 113 37.3 84.2 Three months 30 9.9 94.1 6 months or above 18 5.9 100 Governmental training Yes 150 49.5 49.5 No 153 50.5 100 Private/Foreign training Yes 154 50.8 50.8 No 149 49.2 100 Table 2 showed that most of the service providers were male and young people aged 21 to 30 years with secondary education and 2 to 5 years of working experience. Therefore, regarding the service quality of the resorts, the majority of service quality is executed by the young, energetic, and dynamic employees having at least a secondary level of education from the Janajati ethnic culture of Nepal. For service delivery, education and literacy are not mandatory. Intrinsic curtsy and values of hospitality are an inborn gift of eastern philosophy, whereas a countable number of illiterate (N = 22, 7.3%) employees were also observed as resort service providers. As to Nepalese normative notions and values, "Atithi Devo Bhava," or "the courteous and generous treatment of guests or customers," is the practice of treating guests or customers as though they are gods. In overall observation, the results indicated that the resorts required young and highly energized employees. The majority of the employees were least experienced (N = 140, 46.2%), and the least employees were highly experienced (N = 18, 5.9%). Similarly, most employees were generalists (N = 248, 81.8%) rather than specialists (N = 55, 18.2%) in the hospitality and leisure industry. Among the specialists, most employees had a degree of 10+2 from professional education. As per the course duration, the highest number of employees (N = 113) were one-monthly trained in the private or foreign hospitality and leisure industries and other professional training institutions. Humanities and Social Sciences Letters, 2023, 11(3): 362-376 368 © 2023 Conscientia Beam. All Rights Reserved. 6.2.2. Customers’ Profile A total of 303 respondents, resort customers from Bagmati province of Nepal, were taken for the database. Their demography has been mentioned in the following Table 3: Table 3. Customers’ demography. Demography types Frequency Percent Cumulative percent Gender Male 159 52.5 52.5 Female 143 47.2 99.7 Others 1 0.3 100 Age Up to 20 years 12 4.0 4 21 to 40 years 148 48.8 52.8 41 to 60 years 131 43.2 96 61 to 80 years 12 4.0 100 Region Nepal 132 43.6 43.6 Asia 93 30.7 74.3 Europe 38 12.5 86.8 America 23 7.6 94.4 Australia 11 3.6 98 Others 6 2.0 100 The customer’s profile showed many of them were males, constituting 52.50% (N = 159) of the leading customers of the resorts. Nevertheless, male-dominated culture is shifting now, and as a result of this paradigm, the number of female customers is also getting high, constituting 47.2% (N = 143). Hence, the service provider required eagerness for the service types of both males and females to enhance the resort’s service quality. Only negligible (N = 1, 0.3%) were from the other gender as a resort customer. The majority of the resort ’s customers were middle-aged, between 21 and 40 years old (N = 148, 48.80%). The senior citizens were very few (N = 12, 4%). Therefore, the service provider should consider the service compatible with people under 60 years. The second group was also higher (N = 131, 43.2%) in the t otal of resort customers. However, from the perspective of behavior aspect, middle-aged (21 to 40 and 41 to 60) people may be professionally, biologically, and financially sound in their lives, and they can afford the cost of the resorts. Considering the region, most customers were Nepali (N = 132, 43.60%) and Asian (93, 30.70%). During data collection, most of the resorts were either closed or partly in operation due to Covid-19 pandemic. Thus, the possibility of more customers from abroad was very low. Therefore, most of the resorts were sustained by Nepali and Asian customers. After Nepali and Asian, European (N = 38, 12.5%) and American (N = 23, 7.60%) people were the second options for Nepali resorts. Somehow Australians (N = 11, 3.60%) and others (N = 6, 2%) also contributed to the revenue. Hence, overall observation of the database showed that Nepali resorts were focused on European and American clients to generate revenue after domestic and Asian clients. 6.3. Correlation Analysis The normality of the data was checked before examining the correlation and regression between service quality and customer satisfaction. The average mean of six service quality components and customer satisfaction, as well as the SERVQUAL and satisfaction scores, were tested using Skewness and Kurtosis (Smalheiser, 2017). The normality assumption for α = 0.05 requires that the test statistics of Skewness and Kurtosis fall between ± 1.96 (Chin & Lee, 2008). However, most of the service quality statistics did not meet these assumptions (see Appendix 1). Therefore, the data did not follow a normal distribution. This ruled out the use of parametric tests. Instead, a non-parametric test, Spearman’s correlation, was used to test the hypothesis. However, for regression, Hayes’s (2022) model was used thereafter. In this study, Table 4 shows the relationship between each service quality (SQ) component and customer satisfaction (CS) component that has been presented below: Humanities and Social Sciences Letters, 2023, 11(3): 362-376 369 © 2023 Conscientia Beam. All Rights Reserved. Table 4. Spearman’s correlation between all components of SQ and CS. Spearman’s correlation between all components of SQ and CS CS tangibility mean CS reliability mean CS responsiveness mean CS assurance mean CS empathy mean CS expectation mean Average mean of CS Spearman's rho (ρ) SQ tangibility mean Correlation coefficient -0.141* -0.125* -0.111 -0.171** -0.085 -0.078 -0.129* Sig. (2-tailed) 0.014 0.030 0.055 0.003 0.138 0.175 0.024 N 303 303 303 303 303 303 303 SQ reliability mean Correlation coefficient 0.107 0.055 0.079 0.082 0.095 0.157** 0.094 Sig. (2-tailed) 0.064 0.337 0.169 0.155 0.100 0.006 0.101 N 303 303 303 303 303 303 303 SQ responsiveness mean Correlation coefficient 0.163** 0.157** 0.170** 0.118* 0.151** 0.178** 0.162** Sig. (2-tailed) 0.004 0.006 0.003 0.040 0.008 0.002 0.005 N 303 303 303 303 303 303 303 SQ Assurance mean Correlation coefficient 0.007 0.017 0.025 -0.004 0.024 0.054 0.010 Sig. (2-tailed) 0.904 0.772 0.661 0.948 0.677 0.346 0.863 N 303 303 303 303 303 303 303 SQ empathy mean Correlation coefficient -0.007 0.033 0.003 -0.017 -0.032 0.018 -0.021 Sig. (2-tailed) 0.897 0.563 0.956 0.764 0.580 0.758 0.713 N 303 303 303 303 303 303 303 SQ expectation mean Correlation coefficient -0.117* -0.043 -0.105 -0.075 -0.057 -0.033 -0.085 Sig. (2-tailed) 0.043 0.453 0.069 0.191 0.320 0.567 0.138 N 303 303 303 303 303 303 303 Average mean of SQ Correlation coefficient 0.011 0.036 0.023 -0.008 0.036 0.072 0.023 Sig. (2-tailed) 0.854 0.537 0.691 0.887 0.535 0.213 0.696 N 303 303 303 303 303 303 303 Note: *. Correlation is significant at the 0.05 level (2 -tailed), **. Correlation is significant at the 0.01 level (2 -tailed). Humanities and Social Sciences Letters, 2023, 11(3): 362-376 370 © 2023 Conscientia Beam. All Rights Reserved. In this study, service quality in terms of tangibility and expectation components was negatively correlated with all components of satisfaction. Their direction with most of the components of customer satisfaction was also not significant. Nevertheless, service quality in terms of reliability was positively correlated with all components of customer satisfaction, but they were not significant to each other except the expectation component of customer satisfaction. Similarly, the assurance and empathy component of service quality had a positive as well as negative correlation with no significant direction to all components of customer satisfaction. However, it was fair to say that only service quality in terms of responsiveness was positively correlated with all components of customer satisfaction, explaining the significant direction in the resorts. Hence, to find out the effect of service quality on customer satisfaction, including education status as a mediating variable, only service quality in terms of responsiveness was taken for this study. 6.4. Regression Analysis The binary logistic regression model showed significance for only two variables: service quality in terms of responsiveness and employee education status, which were positively significant to customer satisfaction. The professional education of employees also showed no significant result. Therefore, further statistical analysis of the effect among these variables has been performed. Considering the assumptions of statistical tests, normality, linearity, and homoscedasticity (presented in Appendices 2, 3, and 4) are satisfied for these variables: service quality in terms of responsiveness, education status of employees, and customer satisfaction, so Hayes’s Simple Mediation Process Model is employed to examine the direct, indirect, and total effect of service quality in terms of responsiveness and the mediating effect of employees’ education status on customer satisfaction (Hayes, 2022). Its summary has been presented in Appendix 5. This mediation model was used to examine the causal antecedent variable of service quality in terms of responsiveness (X) and transmit its effect on a consequent variable, customer satisfaction (Y). It is the basic model, which includes two consequent variables, employees’ education status (M) and customer satisfaction (Y), and two antecedents, service quality in terms of responsiveness (X) and employees’ education status (M), with service quality in terms of responsiveness (X) causally influencing customer satisfaction (Y), and employees’ education status (M) causally influencing customers satisfaction (Y), which has been presented in the Figure 2: Figure 2. Effect of service quality with desegregated education status on customer satisfaction. Figure 2 shows the effects of employee service quality with their education on customer satisfaction. A direct effect of service quality in terms of responsiveness on customer satisfaction is 0.3301 (When there is one unit of positive change in service quality in terms of responsiveness but the same in employees’ education status, 0.3301 Humanities and Social Sciences Letters, 2023, 11(3): 362-376 371 © 2023 Conscientia Beam. All Rights Reserved. units of positive change will occur in customer satisfaction). The mediating effect of employee education on customer satisfaction is 0.1626 (When there is one unit change in employees’ education status, remaining service quality in terms of responsiveness is the same, 0.1626 units of positive change will occur in customer satisfaction). Indirect effect of service quality in terms of responsiveness on customer satisfaction is (1.0675 × 0.1626) = 0.1735 (When there is one unit change in service quality in terms of responsiveness where employees’ education status is the same, 0.1735 units of positive change will occur in customer satisfaction as a result of the effect of service quality in terms of responsiveness on employees’ education status, which in turn affects customer satisfaction). The total effect of service quality in terms of responsiveness on customer satisfaction can be measured by adding the value of direct and indirect effects of service quality in terms of responsiveness on customer satisfaction which is (Direct effect + Indirect effect = 0.3301+ 0.1735) = 0.5036 (When there is one unit change in service quality in terms of responsiveness, 0.5036 units of positive change will occur in customer satisfaction). Initially, Hayes (2022) Simple Mediation Process Model was employed to examine the direct, indirect , and total effects of service quality on responsiveness and the mediating effect of education status on customer satisfaction. However, the education status of the employee as a mediating variable was desegregated from the other possible affected variables to measure the effect on the dependent satisfaction variable of the resorts. Therefore, covariates of this study, such as gender, age, ethnicity, experience, professional education, and training of the employees, were identified. Subsequently, the researchers implemented to mitigate the influence of said covariates in order to access the impact of service quality, specifically in terms of responsiveness. Additionally, the researchers examined the meditating impacts of employees’ education status on customer satisfaction to substantiate the assertions made in this study. Hayes (2022) Process Macro Multiple Mediation Analysis Model 4 was used to control the covariates of this study and its result has been presented in Figure 3: Figure 3. Effect of service quality with segregated education status on customer satisfaction. In Figure 3, segregated mediating effect without covariates showed a 11.32% positive change in the dependent variable, customer satisfaction. However, the segregated mediating effect of education status was lower than (0.1132 < 0.1626) desegregated previous findings. Therefore, all six covariates of this study (gender, age, professional education, ethnicity, experience, and training of the employees) can have a 5.04% (0.1626-0.1132) significantly positive effect on the customer satisfaction of the resorts. Now, the researchers can claim that there is a significant and positive mediating effect of education status on the relationship between service quality in terms of responsiveness and all components of customer satisfaction in the resorts of Nepal. Humanities and Social Sciences Letters, 2023, 11(3): 362-376 372 © 2023 Conscientia Beam. All Rights Reserved. 7. DISCUSSION Some studies have found a positive and significant link between service quality and customer satisfaction in the hotel industry (Bello et al., 2017; Bigne, Moliner, & Sánchez, 2003; Ham & Hayduk, 2003). However, this study did not find the same result for all aspects of service quality and customer satisfaction in Nepali resorts. Only responsiveness, one of the service quality components, had a positive and significant relationship with all customer satisfaction components. Therefore, this study partly supports the findings of previous studies (e.g., (Bello et al., 2017; Bigne et al., 2003; Ham & Hayduk, 2003). Regarding the mediating effects, Bello and Bello (2015) indicated that hospitality employees are the organization's ‘face and wealth’. Therefore, service quality could be updated by the employees' training and education status (demographic variables), which was a positive direction and explained significantly in the service quality of the resorts in Nepal. Similarly, the antecedents of gaps and employees’ education (empowerment) shape the service quality standard. Therefore, employees' education is a crucial positive mediator between service quality and customer satisfaction in the resorts of Nepal. 8. CONCLUSION AND IMPLICATIONS This study examined how service quality affects customer satisfaction through the mediating role of employees’ education. It found that responsiveness, one of the service quality components, had a positive and significant direct effect on customer satisfaction, accounting for 30.79 percent of the change. When employees’ education was added as a mediator, the indirect effect of responsiveness and education on customer satisfaction was 9.82 percent. The total effect of responsiveness alone and responsiveness and education together on customer satisfaction was 40.61 percent. The mediating effect of employees’ education alone was 11.32 percent. Therefore, this study concluded that both responsiveness and employees’ education are important factors for enhancing customer satisfaction and resort performance. Regarding the relationship between service quality and customer satisfaction, the willingness to help the customer and to provide prompt services of the resorts is significantly positively correlated with satisfying their customers, rather than other aspects. Hence, more focus on responsiveness is essential than other service quality components. A notable positive mediating effect of the educational status of the employees is revealed in the relationship between service quality and customer satisfaction. Therefore, maintaining the required educational status of the employees is essential to enhancing the resort’s performance. Functionally, customer satisfaction is the function of a direct effect in terms of responsiveness and an indirect effect by mediating the effect of employees’ education status. Therefore, service quality in terms of responsiveness and the education status of employees are functionally correlated to satisfy resort customers. 9. FUTURE SCOPE The concerned Nepali service providers, resort customers, and hospitality professionals in general can understand the relationship between the service quality of the resorts and consumer satisfaction from this study. The stakeholders can also benefit from the finding that service quality in terms of re sponsiveness is given greater importance than other components of service quality. It could be better if the resorts started improving their service based on the employees' responsiveness component and education status. Therefore, they should focus on the ir willingness to help customers and provide prompt service to enhance their satisfaction and loyalty. Similarly, the broader geographical scope can be taken for future studies by the upcoming scholars to know and f ind out whether other factors or components, or even the newer ones, are more important to mould the customer's satisfaction towards the different resort’s services in Nepal, and other mediating or moderating factors can be identified for future implication. Humanities and Social Sciences Letters, 2023, 11(3): 362-376 373 © 2023 Conscientia Beam. All Rights Reserved. 10. LIMITATIONS OF THE STUDY The SERVQUAL model has been used to measure service quality (Parasuraman et al., 1988), and the expectancy-disconfirmation (Oliver, 1980) model has been used to measure customer satisfaction. Satisfaction was realized and quantified from the evaluative judgment of the customer after consuming specific products or services (perceived performance minus expectation of the customers), and service quality was realized from the perspective of resort employees. Therefore, the findings of this study can be taken as a reference only for standardizing the service quality components to meet or exceed the customer’s expectations of the resorts. Funding: This research is supported by the Rupantaran project at Kathmandu University School of Education, Nepal (Grant number: NORHAD 2017-2023). Institutional Review Board Statement: The Ethical Committee of the Kathmandu University School of Education, Nepal has granted approval for this study on 25 July 2021 (Ref. No. PhD Re-Reg-021). Transparency: The authors confirm that the manuscript is an honest, accurate, and transparent account of the study; that no vital features of the study have been omitted; and that any discrepancies from the study as planned have been explained. This study followed all ethical practices during writing. Competing Interests: The authors declare that they have no competing interests. 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Normality of SERVQUAL and satisfaction N Skewness Kurtosis Statistic Std. error Statistic Std. error SQ Tangibility mean 303 -1.283 0.140 2.267 0.279 SQ Reliability mean 303 -1.134 0.140 1.694 0.279 SQ Responsiveness mean 303 -0.993 0.140 1.125 0.279 SQ Assurance mean 303 -1.231 0.140 2.184 0.279 SQ Empathy mean 303 -1.290 0.140 2.594 0.279 SQ Expectation mean 303 -1.096 0.140 1.398 0.279 Average mean of SQ 303 -1.398 0.140 2.487 0.279 CS Tangibility mean 303 -0.634 0.140 -1.129 0.279 CS Reliability mean 303 -0.638 0.140 -1.083 0.279 CS Responsiveness mean 303 -0.592 0.140 -0.904 0.279 CS Assurance mean 303 -0.678 0.140 -0.758 0.279 CS Empathy mean 303 -0.693 0.140 -0.846 0.279 CS Expectation mean 303 -0.697 0.140 -0.893 0.279 Average mean of CS 303 -0.662 0.140 -1.163 0.279 Valid N (Listwise) 303 Note: SQ: Service quality, CS: Customer satisfaction (Failed the Normality test as per the literature) http://doi.org/10.1177/2158244020935887 https://doi.org/10.18488/73.v10i3.3045 https://doi.org/10.18488/73.v10i2.2980 https://doi.org/10.1177/002224378001700405 https://doi.org/10.1177/002224298504900403 https://doi.org/10.1080/19368623.2013.805313 http://doi.org/10.1080/136067198376102 Humanities and Social Sciences Letters, 2023, 11(3): 362-376 375 © 2023 Conscientia Beam. All Rights Reserved. Appendix 2. Normality test: Descriptive statistics N statistic Maximum statistic Skewness Kurtosis Statistic Std. error Statistic Std. error Average mean of satisfaction 303 0.48 -0.662 0.140 -1.163 0.279 SQ responsiveness 303 5.00 -0.993 0.140 1.125 0.279 Education status 303 5 -0.181 0.140 -0.793 0.279 Valid N (Listwise) 303 Note: Test statistics of Skewness and kurtosis on customer satisfaction (Average Mean), SQ in terms of responsiveness, and Employees’ Education Status is in between ± 1.96 (passed the normality test as per the literature). Appendix 3. Linearity test. ANOVA table (a) Sum of squares df Mean square F Sig. Average mean of satisfaction responsiveness Between groups (Combined) 17.597 7 2.514 2.474 0.018 Linearity 10.247 1 10.247 10.082 0.002 Deviation from linearity 7.350 6 1.225 1.205 0.303 Within groups 299.814 295 1.016 Total 317.411 302 ANOVA table (b) Sum of squares df Mean square F Sig. Average mean of satisfaction Employee education Between groups (Combined) 20.774 4 5.193 5.217 0.000 Linearity 14.842 1 14.842 14.910 0.000 Deviation from linearity 5.932 3 1.977 1.986 0.116 Within groups 296.637 298 0.995 Total 317.411 302 Note: Table (a) illustrates the average satisfaction on SQ in terms of responsiveness and Table (b) illustrates the average satisfa ction on education status with significance (passed the linearity test as per the literature). Appendix 4. Homoscedasticity test. (a) Service Quality in terms of Responsiveness on Customer Satisfaction Note: Passed the Homoscedasticity test. Humanities and Social Sciences Letters, 2023, 11(3): 362-376 376 © 2023 Conscientia Beam. All Rights Reserved. (b) Employees’ Education Status on Customer Satisfaction Note: Passed the Homoscedasticity test. Appendix 5. Desegregated effect of service quality in terms of responsiveness with education status on customer satisfaction. Outcome variable: Employees’ Education Model summary R R-sq MSE F df1 df2 p 0.3549 0.1260 1.0612 43.3825 1.0000 301.0000 0.0000 Model coeff se t p LLCI ULCI constant -1.7107 0.7381 -2.3176 0.0211 -3.1632 -0.2581 SE_Resp 1.0675.1621 6.5865 0.0000 0.7486 1.3864 Outcome variable: Customers’ Satisfaction level Model summary R R-sq MSE F df1 df2 p 0.2426 0.0589 0.9957 9.3844 2.0000 300.0000 0.0001 Model Coeff se t p LLCI ULCI constant -2.8224 0.7213 -3.9127 0.0001 -4.2419 -1.4028 Service quality in responsiveness 0.3301.1679 1.9656 0.0403 -0.0004 0.6605 Employee education 0.1626.0558 2.9117 0.0039 0.0527 0.2724 Views and opinions expressed in this article are the views and opinions of the author(s), Humanities and Social Sciences Letters shall not be responsible or answerable for any loss, damage or liability etc. caused in relation to/arising out of the use of the content.