Citibank: Performance Evaluation

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I.Critical evaluation of Citibank performance evaluation form: Citibank corporate strategy: focused on combining excellent customer service strategy along with relationship banking to build a profitable competitive franchise. Customers were offered the convenience of choosing the type of service delivery, whether personal or remote. But as high end customers become more and more valuable to the bank, their service expectations also went up. Increased service demands included broad array of financial products and careful personal attention. Thus improving customer satisfaction was realized to be of paramount importance for a successful future financial performance. President of Citibank California, Frits Seegers and top managers were dissatisfied with the past performance evaluation measures which mainly consisted of financial measures only. They took steps to improve the important competitive dimensions which they thought were critical to long term success of the franchise. Thus, California division chose to broaden its business vision by integrating non-financial measures to develop a Performance Scorecard which was implemented in 1996 and was a central management tool for evaluating strategy and evaluating performance. Financial district Branch strategy: After joining Citibank James McGaran went through a series of quick promotions to become Manager of largest and toughest branch in the division within seven years. Despite a highly diverse demanding customer base and stiff competition in face of two competitors located at walking distance, James delivered outstanding financial records for four straight years in a row. Even with limited staff of 15 people branch revenues and profit margins were high. He successfully operated the most important, challenging branch amongst the 31 branches in the division and enjoyed a sense of accomplishment in his job. James is supervised by hands on area manager Lisa Johnson.

Performance Evaluation Form: Performance Scorecard includes six measures: financial, strategy implementation, customer satisfaction, control, people and standards. 1.Financial measures: focused on actual numbers of total revenue, expense and profit margins taken from accounting system and thus is an accurate, reliable objective measure. 2.Strategy implementation: measures revenues from retail customers (household, business and professionals).Households include new to bank households, lost to bank households, cross-sell, split, merger households and total households. Reliable, objective. 3.Customer Satisfaction: It was agreed upon that deteriorating customer satisfaction would ultimately reflect on the financials. Though this sole measure was considered by the top management as the most relevant of all measures on the performance evaluation form and a leading indicator of long term financial performance, yet it failed to receive adequate and careful planning. Several glaring drawbacks are evident. a. The number of customers (25) chosen for the survey was extremely small for a proper sample and reliable results. b. Surveys conducted face to face at the bank itself would have been more reliable compare to telephonic interviews since the attention of the people being interviewed would have been assured and they would be clear in their minds as to who was being referenced to. Customers being interviewed are busy people who might have been in the midst of something when they got the call. c. Questions on customer satisfaction survey should have strictly pertained to branch itself rather than to centralized services like ATM and 24 hour phone banking over which branch managers have no control. Thus, despite their best efforts, the ratings of branch managers would still not be an accurate objective measure of their true score. This not only adds a bias but is also unfair to them. 4.Control Measures: included audit and legal/auditory measures. Internal control processes were audited by internal auditors...
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