Citibank is one of the reputed banks in the United States with a diverse range of customers; from individuals to business class which requires excessive care and value for their business. For the same basic reason, the bank introduced performance score card so that to ensure superior services to its customers in the presence of fierce competition. On strategic grounds, implementing performance score card has a number of dimensions to focus. These include
to achieve targeted profitability and revenues through regular accounting system; ensuring
measures to target segments from the markets according to the branch and getting maximum profits;
in order to have a loyal, profitable, happy and dependable customer base so that the bank maintains its successful operations from such potential stakeholders;
branch internal processes to at least par level. The performance scorecard was also introduced keeping in mind to maintain
as one of the key elements to determine bank’s performance. Since internal stakeholders are the most important ones and such scorecard focuses on internal communication within a branch and also emphasizes the employees to work on a broader perspective of business and consider profitability measures with superior people’s excellence as the nucleus of the business (Kaplan & Norton, 2007).
What is your assessment of the performance measures used to evaluate James' performance?
James has been one of the most eligible employees of Citibank showing enormous self growth as well as bank’s growth in terms of collecting revenues and profitability. Right now, he has been assigned as the manager of Los Angeles Financial district; where competition is on its extreme level and a proper guiding individual is needed to maintain the branch. With the implementation of new performance score card, James overall performance comes out to be good. However, some areas are not strong which will get better keeping James track record. His performance under the new performance score card is as under:
- Financial measures:
With any doubt, James performance on financial ground remains unique and stands above par.
This is because; James has achieved his financial targets twenty percent more than targeted. This also makes James bank’s successful employee as far as collecting revenues is concerned in the presence of major banks like Bank of America.
- Strategy implementation:
Strategic implementation as remained above par
. This is because in the last three quarters, the branch went beyond its growth aim for business, professional, individual and retail businesses. This again gives James another edge on other branches of the bank’s chain.
- Customer Satisfaction
This is the most contentious and divisive element in James evaluation. In such an important geographical location, there is no room present where negligence can be shown in terms of customer satisfaction. There have been numerous events highlighted in the case which indicates that customers are not satisfied by the services given by the branch and best value is not achieved with their business with the bank. No matter how superior results James shows in other components performance scorecard; but customer satisfaction is the most important measure to evaluate branches overall performance. Therefore, according to my view point, customer satisfaction remains below par.
- Control measures
The case explains that there have been incidents of frauds and operating losses which should be corrected right away under his supervision. As a matter of fact, after the implementation of the performance score card, this factor has been looked only in three quarters and James branch secured above par ranking. But, such incidents shows there is something lacking and the branch should be taking robust steps in stop such losses to bank. Therefore, control measures are at par.
- People and Standard
As explained earlier, James is one of the few employees in the bank who worked much hard and secured top position in some years. He’s icon in the bank and it makes it obvious that the employees must be taking him as a source of inspiration. James believes in continuous improvement through human resources which gives the branch a unique credibility and it performs well. Therefore, his criterion in the performance score card deserves an above par
How and how well are these performance measures linked to Citibank's strategy? What is Citibank's strategy as implied by the performance measures?
The performance measures defined in the Citibank’s strategy are much important to follow in order to secure profitability and going concern of the bank. On the bird’s eye view, the main objective of a bank is to establish link with profitable customers and make profit by offering superior services. Citibank in this case is also doing the same and restructuring its performance evaluation system so that a niche look can be given to assess and appraise performance of each branch and also motivate employee’s morale to work harder. The performance measures are multifaceted and are profound in nature in order to serve the purpose. As explained, due to having a constant look, profitability of the branch is taken care in the performance score card, strategic direction and planning for the branch in accordance to the target market in the suburban areas is also evaluated in order to ensure that the branch is maintaining relationships with potential customers. On the other hand, control measures with in a branch are also an integral part which ensures abidance of rules and regulations and eliminating fraudulent activities. Branch manager’s competencies are also focused and his way of motivating and dealing with the internal stakeholders has also given weight. Most importantly, customer satisfaction has also been given much weight as a strategic function to evaluate branch’s performance. Therefore, it this era of contemporary times where conventional banking is revamped by modern value added banking products services, such performance measures are insightful to carry forward Citibank’s overall business strategy. Citibank also works on establishing profitability base like other banks so that the going concern of the bank could be maintained in such competition. This performance evaluation system helps the bank to serve the purpose.
Assume that you are Lisa Johnson. Complete Exhibit 1 to evaluate James’ performance.
Bank’s over all performance for the year come out to be 2.51 out of 3; which is 84% success rate. This shows that James have been consistently working hard in order to have good business. All the aspects show promising results except customer satisfaction. In this regard, James has also figured out potential flaws and has started working on them in a consistent manner to avoid such mishaps in the future. If evaluated overall, the brand’s performance remains above par
for this year as visible in the accumulated evaluation scorecard of four quarters.
What changes, if any, would you make to the new performance scorecard system? Assess the strengths and limitations of the new PS system and suggest changes, if any.
The current evaluation process is an excellent one to get detailed insights of the performance of the bank. But there are some limitations and short comings present in the new performance evaluation system. Out of all, the most important aspect to be covered is of customer services.
Customer satisfaction is a part of the evaluation system but customer services
should also be there in order to identify what went wrong in customer satisfaction and how services could be introduced or improved to satisfy customers. Also, the new performance system has not been providing long term incentives which in the end would be devastating in terms of demoralized employees. As a matter of fact, the performance score card seems not be aligned with the reporting chain which in the long-term can create problems in taking quick managerial decisions. Also, there are numerous non-quantifiable areas described in the case. In these areas, managers like James should also be allowed having branch’s self assessment with collaboration of his employees and mention what went wrong. This will give an ample opportunity to listen to the voice of the manager and employees who are working on the frontline
in a dynamic banking industry in the presence of major market players like Bank of America. Strategic decision making should be done with the consent of Branch manager giving weights and rates to each of the factor and coming with an accumulated score. Also, the same should be shared along the hierarchical chain so that a focused look can be ensured for bank’s overall prosperity and well being.