Citibank: Performance evaluation


PROBLEM STATEMENT  The effective use of the new performance scorecard at the California Division of Citibank to rate the performance of James: a dedicated and hardworking manager of one of the largest and most challenging branches of the Division .

revenue $6mn.3mn Diverse customer base Intense competition. profit margin $4. especially from Bank of America and Wells Fargo Impressive financials for four years successively New performance scorecard to include customer satisfaction too .INTRODUCTION  Circa 1997  James McGaran. manager of most important of the 31      branches of Los Angeles area Staff of 15 people.

ATM and phone banking services included . businesses & professionals • Viewed as leading indicator of future financial performance • Telephone interviews with 25 previous month branch customers • Service.NEW PERFORMANCE SCORECARD (1/2) Financial measures Strategy implementation Customer satisfaction • Total revenue and profit margins against targets • Obtained from regular accounting system • Tracked revenue for different types of target customer segments relevant to branch strategy • Households.

encourage area training programs.NEW PERFORMANCE SCORECARD (2/2) Control measures • Evaluation of branch’s internal control processes by internal auditors • Par score (4 on a scale of 1-5) needed for bonus People & standards • Non quantifiable ratings • Determined subjectively by branch manager’s boss • Measured proactive efforts of manager to develop & communicate with subordinates. act as a role model Global rating • Global rating for each of 6 components by manager’s boss • Overall rating for the branch manager .

PERFORMANCE & INCENTIVES  Customer satisfaction goal in 1996.achieve a rating       of at least 80 Quarterly & annual evaluation of branch managers Comparison between objectives and targets achieved for each performance measure Branch manager’s bonus linked to final performance scorecard rating ‘Below par’ rating no bonus ‘Par’ rating  bonus of 15-20% of basic salary ‘Above par’ rating 30% bonus .

PERFORMANCE OF JAMES’ BRANCH Performance measure Financial Strategy implementation Control Quarterly ratings (1996) Outstanding (20% above target) ‘Par’ to ‘above par’ range ‘Above par’ Customer satisfaction ‘Below par’ .


The customers may be unhappy with the centralized services provided by the bank  A ‘below par’ rating will demotivate James: a hardworking and dedicated employee  James was a reference point for a lot of branch managers and his appraisal was being watched closely . Satisfying a diverse group of demanding clientele was a challenge  Customer satisfaction survey was very subjective.‘PAR’ RATING FOR JAMES  James’ branch was the largest and toughest branch in the division.

It should be branch/area specific. businesses and professionals may have diverse needs. It will be good to capture their details to focus on improving satisfaction for a particular segment  The sample size of 25 may be inadequate to assess the customer satisfaction of a large branch. It should be adjusted according to the size of the branch  The base value of the customer satisfaction scoring should not be fixed at 80 throughout the division. based on the current customers .ASSESSMENT OF CUSTOMER SATISFACTION  Data to assess customer satisfaction should be more qualitative to gauge the reasons for dissatisfaction: centralized services or branch specific services  The different retail customers: households.

PERFORMANCE APPRAISAL AT CALIFORNIA DIVISION  The present appraisal system should be supplemented by self appraisal by employees  Discussion with the employee in question should be as essential part of the appraisal process  BARC can be an effective appraisal tool to allow are managers to conduct more accurate appraisals*  The appraisals should be also take into account the process and not just be based on outcomes .

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