Evaluation and Objective Performance Measures

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Case Writeup – Citibank: Performance Evaluation
Question 1) Which of James McGaran’s performance measures are objective, and which are subjective? Evaluate the pros and cons of objective and subjective measures in a performance evaluation and reward system. Objective performance measures are those which are directly quantifiable and are not subject to the beliefs and interpretations of the observer. Subjective measures on the other hand require interpretation and judgment, and while numerical scores can indirectly be attributed to them, the interpretive element means they are not necessarily absolute or indisputable. By this standard, James’ objective measures are:

Financial measures
Strategy implementation

The subjective measures are:

Customer satisfaction (can be considered objective depending on the kinds of questions. Seeing as these are based on telephone interviews, we believe the research firm is interpreting the responses to assign scores People

Standards

Objective measures are directly quantifiable and hence tend to be relatively easier to measure. In addition they cannot be inconsistently applied nor are they open to dispute or interpretation on the part of the employee (this allows the measures to be more easily and fairly tied to reward payouts). On the flip side however they can often be restrictive in their scope and application and often do not capture some of the fundamental drivers of business performance and growth. Often objective performance measures can also be misleading and do not provide actionable feedback areas for employees to improve upon, Subjective measures by contrast can capture softer and more nuanced areas of employee performance, many of which are fundamental in assessing the longer term viability of the business. In addition, they can give a better picture of the underlying drivers of the objective performance measures and how the latter can be improved by directly influencing the former. The interpretive nature...
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