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Citibank: Performance evaluation

SECTION C-GROUP 8 BAHNIMAN|BALA|CHHAVI|NITIN|SAUMYA| SURAJ|VARDAN

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 .

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

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. 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.

act as a role model Global rating • Global rating for each of 6 components by manager’s boss • Overall rating for the branch manager . 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.

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 & INCENTIVES  Customer satisfaction goal in 1996.

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’ .

RECOMMENDATIONS .

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. 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 .

It should be branch/area specific. 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.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. 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. businesses and professionals may have diverse needs. based on the current customers .

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 .