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Analysis Introduction Citibank strategy

Citibank is a very niche player in California market
Major competitors- Bank of America and Wells Fargo Earlier strategy Profitable franchise by providing

relationship banking combined with high level of service to its customers But as customers service expectations rose. New strategy Focus on customer service as a key differentiator

Changes in Employee Performance Evaluation Process

In past, financial measures had dominated Citibanks

performance evaluation But to implement new strategy, Citibank changed their evaluation criteria New performance scorecard contains 6 different measures Financial measures Strategy implementation Customer satisfaction

Control measures
People Standards

Evaluation Performance scorecard details

Below par rating No bonus
Par rating Bonus upto 15% Above par Bonus upto 30%

Condition Without par ratings in all components

of the scorecard, a manager could not get an above par rating

Case Details
James McGaran is the manager of most important

branch in Los Angeles His branch has done better than others He has delivered impressive financial results for four years in a row His customer satisfaction ratings were below par He took steps to improve customer satisfaction (rating improved in last quarter)

Case details (cont)

Fritis Seegers, President-Citibank California Lisa Johnson, Area Manager-Los Angeles Both are aware of the efforts put by James as his

branch is the largest and toughest branch in the division His branch had a demanding clientele and challenging competition James McGaran is a reference point for other branch managers He gave a lot of importance to these ratings

Q.2.Why has Citibank introduced a Performanceperformance scorecard specifies Scorecard? The implemented
goals and measures managers performance in 6 areas:

3. 4.


Financial measures Strategy implementation Customer satisfaction Control measures People Standards

Reason for new Performance Score card

Citibank was a niche player and was to provide high

level of services to customers Only financial measures were the poor vehicle to communicate the high service strategy Broader view of business and focus on all the dimensions for long term success Reflection of Customer Satisfaction as a key differentiator

Q.3. James Performance

Financial measures: Above Par Strategy implementation: Above Par

Control measures: Par

People: Above Par Standards: Above Par

Customer Satisfaction: Below Par

Practical Constraints faced by James McGaran

Diverse set of customers.
The branch that was handled by James was the largest

and toughest branch in the division. Had a demanding clientele and challenging competition.

Final Evaluation Rating for James Overall Evaluation: Above Par

This is the first year the balanced scorecard was implemented.

It will take sometime to insure that all the areas are measured appropriately He has done exceptionally well across the scorecard and he is consciously making efforts to over come the issues in customer evaluation rating Management should also have a look on James peer group ratings to ensure customer satisfaction is fair indicator which can be linked to overall performance As this is the highest revenue generating branch any decision which may have an impact on revenues generated from this branch should be with utmost surety

Q.4 How would you communicate the decision to James?

James should be communicated about the reasons behind

overall above par rating:

Consistent exceptional performance His concerns with the customer survey

He should also be told that in the future he will not get an

above par rating if he fails to score par on all the measures

James should be aware that management will not disregard

non-quantifiable measures in the future as steps are being taken to insure that they are measured appropriately