DOI: 10.4018/IJCRMM.2020010103 International Journal of Customer Relationship Marketing and Management Volume 11 • Issue 1 • January-March 2020 Copyright © 2020, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 31 Efect of Employee Empathy on Service Loyalty Through the Development of Trust in and Satisfaction With Service Employee During Service Interactions Waseem Bahadur, University of Science and Technology of China, China https://orcid.org/0000-0001-6238-3519 ABSTRACT This study examines the indirect effect of employee empathy on service loyalty through the intervening effect of trust in and satisfaction with service employees during service interactions. Data was obtained through a self-administered questionnaire from university students. 410 useable responses were used to perform data analysis. Confirmatory factor analysis, structural equation modeling, and bootstrapping for indirect effects were conducted to test the hypotheses. The results show a significant impact of employee empathy on trust in service employee and satisfaction with service employee during customer-employee interactions. Also, satisfaction with a service employee showed a significant effect on service loyalty during service interactions. The study enhances the understanding of empathy within banking services during interactions between service employee and customer. It also provides insights for service managers and frontline service employees on how empathy develops customer’s trust and satisfaction with a service employee. KEyWoRDS Employee Empathy, Satisfaction With Service Employee, Service Loyalty, Trust in Service Employee INTRoDUCTIoN Services play an essential part in today’s aggressive business environment and are difficult to manage due to their intangible nature (Bahadur, Aziz, & Zulfiqar, 2018). It is complicated for a customer to appraise service and is also challenging for a service firm to provide the service beyond customer’s expectations (Brady, Bourdeau, & Heskel, 2005). As service is co-produced by the customer and a service firm during the process of service delivery, it is necessary to fulfill customers desires during provision of services (Fellesson & Salomonson, 2016). Customers are directly affected through employee’s attitude and behavior affecting their satisfaction and loyalty. Therefore, for successful service delivery, it is indispensable for a service employee to adopt such traits and behaviors that positively affects customer’s satisfaction (Itani & Inyang, 2015). Employee knowledge, empathy,