Citibank HRM

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

INTRODUCTION 

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Circa 1997 James McGaran, manager of most important of the 31  branches of Los Angeles area Staff of 15 people, revenue $6mn, profit margin $4.3mn Diverse customer base Intense competition, especially from Bank of America and Wells Fargo Impressive financials for four years successively  New performance scorecard to include customer satisfaction too

NEW PERFORMANCE SCORECARD (1/2) Financial measures • Total revenue and profit margins against targets • Obtained from regular accounting system

Strategy  implementation

Customer satisfaction

• Tracked revenue for different types of target customer segments relevant to branch strategy  • Households,  businesses & professionals

•  Viewed as leading indicator of future financial performance • Telephone interviews with 25 previous month  branch customers • Service, ATM and phone banking services included

NEW PERFORMANCE SCORECARD (2/2) Control measures

People & standards

Global rating

• Evaluation of   branch’s internal control processes by  internal auditors • Par score (4 on a scale of 1-5) needed for bonus

• Non quantifiable ratings • Determined subjectively by   branch manager’s  boss • Measured proactive efforts of manager to develop & communicate with subordinates, encourage area training programs, act as a role model

• Global rating for each of 6 components by  manager’s boss • Overall rating for the branch manager

PERFORMANCE & INCENTIVES 

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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

Quarterly ratings (1996)

Financial

Outstanding (20% above target)

Strategy implementation

‘Par’ to ‘above par’ range

Control

‘Above par’

Customer satisfaction

‘Below par’

RECOMMENDATIONS

‘PAR’ RATING FOR JAMES 

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James’ branch was the largest and toughest branch in the division. Satisfying a diverse group of demanding clientele was a challenge Customer satisfaction survey was very subjective. 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 

 ASSESSMENT OF CUSTOMER SATISFACTION 

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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, 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. It should be  branch/area specific, based on the current customers

PERFORMANCE APPRAISAL AT CALIFORNIA  DIVISION 

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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