Citibank: performance evaluation

HRM ASSIGNMENT SWATI JAIN 2010238 SECTION-E

Q 1) Describe the performance management and appraisal system adopted by Citibank?

A performance evaluation is done to find out the loop holes and barriers that hinder the performance of an employee and a team leader. This evaluation is done with an aim to establish clear expectations an understanding about: Planning, organising and Leadership effective. How team leader is effective in delegating the task to his employee and how far is he successful in maintain and coordinate group work and is he able to make substantial profit or not. What are the barriers in achieving his desired goal? On what parameters does an employee stand to be at par with the organisations goal and how far he can contribute towards it?

Citibank was a niche player in the California market. Having 80 branches its strategy was to build a profitable franchise by providing relationship banking combined with a high level of service to its customers. And for that Citibank provided a huge and dense network of ATM machines, 24 hour banking and home banking. However, Citibank felt the need to create a new performance score card as the earlier performance measures were dominated by the financial measures but as the banks is growing day by day it needed to focus their attention towards measures of long term success. The new score card also laid importance to non financial measures as a key ingredient in strategy implementation. The new performance evaluation scorecard was done to study all the aspect of performance relating to:

1) Financial measures- to succeed financially, how we should appear to our shareholders. These measures were obtained from regular accounting system and focused primarily on total revenue and profit margin against target. 2) Strategy implementation- target customer segment relevant to branch strategy. 3) Customer satisfaction-to achieve our strategy, how should we appear to our customers. Given the current strategy of the bank, which focused on customer service as a key differentiator, it was considered that the customer satisfaction measure is critical to the long term success and a leading indicator of future financial performance. If customer satisfaction deteriorated, it was only a matter of time before it showed in the financials. 4) Control measures- through internal audits. Branches have to score at least par (defined as 4 on a scale of 1 to 5) to be eligible for any bonus. If the rating was below 4, the branchs business was considered at risk and did not meet the requirements for effective control. 5) People and standards- to achieve our strategy, how will we sustain our ability to change and improve? It is a non-quantifiable ratings determined subjectively by the branch managers boss. The people measure focused on the proactive efforts of the manager to develop and communicate with subordinates, to encourage area training programs, and to be a role model to more juniors. Standards included an assessment of a managers involvement in community groups, trade associations, and business ethics. Each component of the score card was scored independently into one of three rating categories: below par, par or above par. For those measures that could be measures quantitivelyfinancial, strategy implementation, customer satisfaction, and control- pre-defined ratings related to people and standards lacked an appropriate objective indicator; in these cases performance was determined subjectively by the branch managers superior. In addition, the managers boss gave a global rating for each of the six components of the scorecard and an overall rating for the branch manager.

Q2) what in your opinion are the strengths and weaknesses of performance scorecard of Citibank? Strengths and weakness of the new score card Strength
It had been made a structured evaluation which takes care of all the measures that the company thinks fit and necessary under a performance evaluation system. Now the non- financial measure has also been taken into account as an important factor contributing among the leading indicators of strategy implementation. An above par rating manager is separately recognised and is been looked by other manager as a benchmark. The score card has differentiate different measures including customer satisfaction which makes it easy to separately rank separate parameter which further makes it

better for the evaluator that where is the bone of contention in the system and what should be done for its improvement.

Weakness
The scorecard rating was very stringent as a person who doesnt score a at least par rating in all the components a manager could not get a above par rating as a whole. The incentive was also just 15% of the basic salary and no other incentives were given for at par to grow as well as a below par rating was not given any incentive or motivation to improve.

Though ratings were given separately, it did not indentified each factor separately to evaluate the performance There were very high targets set to achieve the above the targets.

Q3) Assume that you are Lisa Johnson, complete exhibit 1 to evaluate James McGarans performance.
If I were Lisa, I would have given James McGaran an above par rating as he has been consistently performing well in the past years. Though his branch was the largest and the toughest branch in the division and he had a demanding clientele and challenging competition. It was difficult to manage such a diverse set of indicators, and the customer measure was sometimes hard to reconcile with demonstrated financial performance. His financials were outstanding- 20% above target. He has generated the highest revenue and made the greatest margin contribution to the business of any branch in the system. He has done exceptionally well across the scorecard and though he is seen as struggling in the area of customer satisfaction, he is consciously making efforts to overcome it. James was a reference point for a lot of other branch managers. Also let us not forget, the parameters which are beyond branchs control are also detrimental for customer satisfaction score. Scoring can be: