Citibank: Performance Evaluation Professor Eugene Soltes Materials: Citibank: Performance Evaluation (198-048) Optional Reading: Linking the

Balanced Scorecard to Strategy Description: Examine the use of financial and non-financial metrics to evaluate and reward individual performance. [MEMO] Frits Seegers: President James McGaran: manager of 31 branches in the Los Angeles area Lisa Johnson: Area manager, supervising James 80 Branches in Califormia. (Strategy) To build a profitable franchise by providing relationship banking com bined with a high level of service to its customers. (Scorecard) Past: Financial measures had dominated. Now: Add new non-financial measres reflecting important competitive dimensions in the bank's strategy. Six different type of measures: Financial, Strategy implementation, Customer satisfaction, Control, People, Stan dards In 1996, when the division expanded performance indicators to include non-financia l measures, it became apparent that James branch's customer satisfaction rating did not follow the same pattern as its financial performance. (Rating) below par: no bunus Par: 15% of the basic salary abaove par: 30% bonus all the components should be at least "par" to get an "above par" for overall r ating.

Assignment: 1. Why has Citibank introduced a Performance Scorecard? It fs basically an attempt to highlight the importance of a diverse set of measure s instead of the single financial performance in achieving the strategic goals o f the division. 2. Place yourself in the position of Lisa Johnson and evaluate James' performanc e (using Exhibit 1). I would give him "avove par" rating if I were Lisa Johnson. Because six of five indicates above par rating and James fully understand the cu stemer satisfaction is the most important thing and he recoverd that 18points from thar quater to fouth qua ter. He seemes to be deserbed to have this rating for this year. Giving him lower latring because of the only one thing and ingnoring other his e fforts is relatively un-fair decision and no-productive for the organization.

The feedback would be better this case than punishment.