The strategic objectives that drive the selection of factors for Citibank’s new performance scorecard are to “build a profitable franchise by providing relationship banking combined with a high level of service to its customers”. This decision forced the company to place more of a focus on the level of which customer service and satisfaction are playing a significant role in the evaluation of a manager and their branches. I think these objectives are necessary and sufficient in accomplishing the organizational goal of demonstrating that non-financial measures are of equal importance as the financial measures. Although these strategic objectives are important it is necessary that a full analysis of all of the measures being used to realize these objectives is being conducted to evaluate their effectiveness and fairness.The six different criteria Citibank used in its performance scorecard are financial, strategy implementation, customer satisfaction, control, and people and standards. Within each of these criteria a variety of specific measures were used to evaluate whether the managers performance was below par, par, or above par. Based on these criteria I believe the performance scorecard is fair because based on this information, an upper level manager can properly evaluate how well a branch manager is achieving and/or properly pursuing the strategic objectives of the California division.
Case Analysis: Citibank: Performance Evaluation1. Why has Citibank introduced a Performance Scorecard? The implementedperformance scorecard specifies goals and measures manager’sperformance in 6 areas: Financial measures Strategy implementationCustomer satisfaction Control measures People Standards The primary purpose of the balanced scorecard is to set goals and allowmanagers to complete well-rounded performance reviews using bothquantitative and qualitative measures. While financial measures areimportant in analyzing performance of the bank, they do not provide anyinsight into non-quantifiable measures that can be equally important inperformance assessment. In addition, the balanced scorecard forcesemployees to adopt a broader view of the business and concentrate not onlyon financial measures, but on measures that are truly important to thesuccess of the company. In the service industry, customer satisfaction is aparticularly important measure in determining how the company is doing. Ahigh level of customer service is a significant component of Citibank’sstrategy in California. Frit Seegers sees it as a leading indicator of futurefinancial performance of the bank. From the past experiences, it wasdetermined that customer satisfaction ratings do not follow the same patternas financial performance, and it is necessary to measure customersatisfaction separately.2. Assume you are Lisa Johnson, complete Exhibit 1 to evaluate James’performance. Provide an explanation for each one of the seven performanceareas evaluated. Exhibit 1: James McGaran's Performance ScorecardQ1 Financial Revenue Expense Margin Strategy Implementation TotalHouseholds New to bank households Lost to bank households Cross-sell,splits, mergers households Retail asset balances Market share CustomerSatisfaction Control Audit Legal / Regulatory People PerformanceManagement Teamwork Training / Development Self Other EmployeeSatisfaction Standards Leadership Business Ethics / Integrity CustomerInteraction / Focus Community Involvement Contribution to Overall BusinessOverall Evaluation Legend: 1 - Below Par 2 - Par 3 - Above Par 3 Financialmeasures: Above Par The financial performance of James’ branch has consistently exceededmanagement expectations for the last 4 years. This year was no exception. James exceeded financial goals by 20%, thus ranking the branch #1 in themarketplace. Strategy implementation: Above Par