Citibank: Performance Evaluation

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João Paulo Coelho (BOAH 2401) October 04, 2010 Citibank: Performance Evaluation
In 1996, Citibank was an emergent banking institution attempting to increase its market share in the competitive Los Angeles area. In order to do so, the bank’s strategy was to focus slightly less on their financial growth, and much more on providing “a high level of service to its customers”. Management viewed this paradigm shift as “critical to the long term success of the franchise”. To implement these changes, a new Citibank employee performance assessment scorecard was created, briefly tested and quickly implemented. Though I believe it was a much improved and broader way to gauge individual performance, there was certainly room for improvement. The scorecard was composed of financial, strategy implementation and control goals which had the advantage of clearly, objectively and transparently measure a manager’s work. These measures were readily accessible though the general accounting system, and left little (if any) room to argue over a manager’s performance. However, all three measures focused primarily on the upcoming quarter(s) and how those numbers compared quarter-over-quarter and year-over-year, making them a short-term or “lagging” indicator of success. The remaining measures on the assessment scorecard (customer satisfaction, people, and standards) were all noticeably subjective, yet viewed as sound long-term indicators and therefore crucial in evaluating the foundation of the future success of the organization. Obviously, the customer is (and will always be) the most important part of the equation, as it is customer business that allows banks to conduct theirs. People and standards measures are both especially significant measures, as they address the character, personality and perceived image of individuals, management and the organization as a whole. A more specific analysis of the assessment scorecard is as follows: Financial Measures

Financial goals are clearly and understandably the most important measure in the assessment scorecard. In this particular case, the yearly financial targets are the result of a division-wide process that includes the division President himself, all the area managers and respective branch managers. For any financial institution, I believe this to be the most objective measure of a manager’s short-term performance. However, discrete short-term accomplishment measures rarely shed light on the bigger picture and, therefore, on the future direction of an organization. This is easily correlated to many other businesses and organizations including my own. I manage an orthopedic research laboratory at the University of Pittsburgh, and one of the items on our yearly evaluation form is the total dollar amount of our grants. Being awarded n number of grants for x million dollars in any given year provides little information about future funding opportunities. I have been at the University for over 4 years and have seen several PhD’s have to close their laboratories unexpectedly after failing to attain the necessary funds to maintain their staff and continue their research. Having various items on a performance assessment scorecard can certainly help avoid situations like those. Strategy Implementation

This is another objective, transparent, easily quantifiable financial measure. As it stands on the Citibank performance scorecard, this measure focuses exclusively on financial achievement. However, I believe Citibank management should change its strategy implementation goals to include some of the customer satisfaction goals as well. If “Citibank’s strategy in California” is, truly, to provide “a high level of service to its customers”, I would add relevant questions from the independently conducted telephone interviews to customers who visited the branches during the past month to this measure, as it is an essential component of the organization’s strategy, and certainly influenced...
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