Citibank: Performance Evaluation Essay

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 â€Å"a high level of service to its customers†. Management viewed this paradigm shift as â€Å"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 â€Å"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 â€Å"Citibank’s strategy in California† is, truly, to provide â€Å"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 by the actions and leadership approach of the respective branch managers. Internal Control Processes This measure is an added form of financial evaluation done by the internal auditing team that follows in line with the two previously discussed. For Citibank this measure was helpful in assessing the level of awareness and involvement of the managers with compliance problems. Customer Satisfaction The most ambiguous and subjective measure on the scorecard, happens to be highly regarded by Citibank leadership as a vital gauge of the long term success of the organization. I look at this measure as having 2 very distinct elements. In the telephone survey previously mentioned, there were questions regarding services provided at the actual branch, and questions oncerning other Citibank services such as 24 hours phone banking and ATM services. I believe questions pertaining services offered at the branch belong with the Strategy Implementation measures, as management clearly stated customer service as a top priority and the branch managers’ actions should be closely linked to services provided at their own local office. All other questions, ones related to additional Citibank services and seemingly out of a branch managerâ⠂¬â„¢s control, should be eliminated from their performance scorecard. Under the current format, there is information that I deem crucial to making this decision that is not provided with the case study. Being that this Customer Satisfaction measure is new in the assessment scorecard (which was only briefly tested before being implemented) I would like to know more about the performance of other/all branch managers. That way I would be able to compare Mr. McGaran’s performance to that of the other managers. I find it somewhat unusual that someone as highly regarded as Mr.  McGaran seems to be, with so much banking experience, scored so poorly in Customer Satisfaction, yet performed so strongly in all other areas of his yearly assessment for four consecutive years, all while managing the most important and most competitive Citibank branch in the Los Angeles division. People and Standards The final two measures on the yearly assessment scorecard go hand in hand, as they concern the way branch managers value their own career advancement opportunities as well as their growth as leaders and role-models not only for employees, but also within the communities which they serve. As subjective as these measures might be, they are essential for any organization, and could have a tremendous impact on an individual’s career. In this particular case, Ms. Johnson used these sections to describe Mr. McGaran as â€Å"an excellent people manager (†¦), a team-builder that motivates his people to go above and beyond. † She enthusiastically referenced his involvement within the community, his focus, discipline, availability, effectiveness and drive among many other things. These are all intangibles that are difficult to assess otherwise (i. . financial measures), but could make a significant difference for the organization as well as the individual. In our laboratory we work with many medical students and young residents. Once they complete their projects in the lab, this is the type of subjective assessment I am responsible for presenting to the attending physicians. How do students/residents perform when the attending physicians are not around? How do they deal with this new environment and how do they perform outside of their comfort zone? How well do they interact with the staff? Do they attempt to take on leadership roles even in the limited time they have at the lab, or are they comfortable just going along? I have been doing such evaluations for about 3 years and, as students start getting into residency programs and residents move onto fellowship programs, it’s staggering how some of the answers to such simple questions seem to strongly correlate with their future expectations and opportunities. After carefully analyzing all 6 assessment measures, with the information available, and if I were asked to make a recommendation on Mr. McGaran’s overall performance, I would have to give him a â€Å"par† rating. The instructions regarding overall year-end performance scores were very clear – â€Å"without â€Å"par† ratings in all the components of the Scorecard, a manager could not get an â€Å"above par† rating†. Citibank management, in particular the California Division, had been strongly emphasizing the importance of customer satisfaction for quite some time, even going as far as changing the performance assessment scorecard to reflect this. Mr.  McGaran is the manager of the most important and most competitive Citibank branch, and he is a role model and a reference to many other branch managers. What credibility would we have as management, if we deviated from the rules regarding that very specific measure in the first year of its implementation? Mr. McGaran was an outstanding employee, and I would do everything within my power to let him know that his incredibly strong overall performance had been noted and that we, as management, were aware of his concerns regarding the validity of the telephone survey. I would let him know that the year-end performance evaluation team is always looking for ways to enhance and improve the assessment scorecard, but in accordance with the one currently in place, he could disagree, but had to accept his rating, and continue to improve his customer satisfaction numbers just as he did during the last quarter. Obviously, such evaluation process serves not only to assess employees but also the system in place to do so. With that in mind, I would propose some changes to the year-end assessment scorecard, starting with an evaluation to the content of the telephone survey and its soundness in assessing a branch manager’s performance. I would also suggest that the rating system be adjusted, so that instead of 3 categories, there were 5. Hopefully, these changes would create a more flexible assessment scorecard, and a yearly performance such as that of Mr. McGaran would be properly distinguished and rewarded.