Citibank performance evaluationCitibank performance evaluation

Prepared by:Rajat Kaul

A1808709003MBA 3c2009-11

Performance ManagementPerformance Management

Definition:

Performance Management is one of the key processes that, when effectively carried out, helps employees know that their contributions are recognized and acknowledged. Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and evaluating results.

Why do even best of the strategies Why do even best of the strategies fail?fail?

A survey of senior executives at 197 companies showed that firms achieve only 63% of the expected results of their strategic plans.  The key reason is they don’t know how to execute effectively.

Here is our take on some of the causes of execution failure:

Lack of strategic focus. Resistance to change. Poor communication. Incentives not aligned with strategy. Not paying attention No cadence

Has Citibank introduced a Performance Has Citibank introduced a Performance Scorecard?Scorecard?

The implemented performance scorecard specifies goals and measures manager’s performance in 6 areas:

Financial measures Strategy implementation Customer satisfaction Control measures People Standards

Contd…Contd…The primary purpose of the balanced scorecard is to set goals and

allow managers to complete well-rounded performance reviews using both quantitative and qualitative measures. While financial measures are important in analyzing performance of the bank, they do not provide any insight into non-quantifiable measures that can be equally important in performance assessment. In addition, the balanced scorecard forces employees to adopt a broader view of the business and concentrate not only on financial measures, but on measures that are truly important to the success of the company. In the service industry, customer satisfaction is a particularly important measure in determining how the company is doing. A high level of customer service is a significant component of Citibank’s strategy in California. Frit Seegers sees it as a leading indicator of future financial performance of the bank. From the past experiences, it was determined that customer satisfaction ratings do not follow the same pattern as financial performance, and it is necessary to measure customer satisfaction separately.

James PerformanceJames Performance

Financial measures: Above Par

Strategy implementation: Above Par

Control measures: Par

People: Above Par

Standards: Above Par

Customer Satisfaction: Below Par

Contd…Contd…

• 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.

◦ James’ concerns about adequacy of the survey used to measure customer satisfaction might be valid. Management should review the survey and get some input from the branch managers on what indicators should be used to measure customer satisfaction.

◦ He has done exceptionally well across the scorecard and though he is seen as struggling in the area of customer satisfaction, he is consciously making efforts to over come it.

◦ Lets not forget the parameters which are beyond branch’s control are also detrimental for customer satisfaction score.

How would you communicate the How would you communicate the decision to James?decision to James?

James should be aware that his concerns with the customer survey and consistently exceptional performance were the main reason for management’s decision to give him an overall above par rating. 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.