Citibank Case Analysis

1.      Why has Citibank introduced a performance scorecard? 2.      Assume that you are Lisa Johnson. Complete exhibit 1 to evaluate James’ performance.

A new performance scorecard was introduced last year by the California Division of Citibank. James McGaran, one of California’s branch managers, would have received an ‘above par’ performance evaluation if Citibank had not changed their performance scorecard. The new scorecard highlights the importance of various measures in order to achieve strategic goals. Their strategy is stated as “to build a profitable franchise by providing relationship banking combined with a high level of service to its customers.” A new measure introduced was customer satisfaction, a measure that McGaran has struggled with in the past year. McGaran’s financial performance is above par, but the non-financial measure of customer satisfaction is below par.

Customer satisfaction is a important indicator of the success of the financial district branch. They serve a diverse customer base varying from customers with sophisticated banking needs to those banking for convenience. Business customers demand high quality service and knowledgeable employees. Customer service may be face-to-face or remotely delivered. The demands of customers increased as their net worth increased. The services offered by Citibank include ATM machines, 24 hour banking, and home banking. Due to the high level of importance of customer satisfaction in the operations of Citibank, it was imperative to change the scorecard to include customer satisfaction to evaluate long-term success. The new scorecard has six different perspectives. The objective for the customer satisfaction is set for achieving a rating of at least 80.

We can identify a few weaknesses by taking a look at Citibank’s new method of evaluation. Most importantly, subjectivity plays a major role in the new performance evaluation. The people and standards perspectives do not have an objective measure and are determined by the judgement of the manager’s superior. Unfortunately this can lead to unfair results in the evaluation of management and may not reflect actual performance. Based on this case, we cannot tell how McGaran actually performed on these perspectives because they are based on Lisa Johnson’s judgement. Additionally, the annual evaluation is based on the combination of the four quarters. There leaves another judgement call when it comes to deciding the overall annual performance because there is no explicit objective way to determine the actual annual performanced based on the total of the four quarters. One option, would be to take an average of the quarter evaluations to come up with the annual report. Otherwise, the managers could each be re-evaluated by their superiors on their annual performance.