Citibank: Performance Evaluation

Company’s strategy & structure

• Was niche player in California market

• Had 80 branches compared with four hundred offices of its largest

competitor

• Provided dense network of ATM machines,24 hour banking, and home

banking

• Their strategy was to build a profitable franchise by providing relationship

banking combined with a high level of service to its customer

• Also to provide high level of services with careful personal attention and a
broad selection of financial products

• Financial measures had dominated performance evaluation in past, but a

new Performance Scorecard was developed to take into account non
financial measures

• It reflected important competitive dimensions in banks strategy

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 Why has Citibank introduced a performance card?

The implemented performance scorecard specifies goals and measures

managers performance in 6 areas:

 Financial Measures

 Strategy Implementation

 Customer satisfaction

 Control Measures

 People

 Standards

Citibank introduced this performance card to:

• To reflect importance of non financial measures as leading indicators of

strategy implementation

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 • To set goals and allow managers to complete well rounded performance
reviews using quantitative and qualitative measures

• To account the non quantifiable measures

• Helps adopt broader view of business

• Helps not only to concentrate on financial measures, but measures that are
truly important for success of the company

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 Do you believe that customer satisfaction is on
critical path for Citibank to achieve their strategy?

• In a service industry Customer Satisfaction is a particularly important

measure in determining how company is doing

• High level of customer service is a significant component of Citibank's

strategy in California

• Frit sees it as a leading indicator of future financial performance of the

bank

• If customer satisfaction deteriorated it will have ill effects on financials in a

long run

• Past experiences indicate that customer satisfaction ratings do not follow

same pattern as financial performance of bank, so there was need to
measure it separately

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 None the less there were some issues with customer satisfaction ratings:

• Citibank had highly sophisticated client base

• Included components that were not in control of the branch like Phone
banking, ATM etc.

• Survey was done on past one month customers only, making it a very small
sample size to conduct a survey

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 Assume you are Lisa Johnson, complete Exhibit 1 to
evaluate James’ performance

 Financial Measures : Above Par

 Strategy Implementation : Above Par

 Customer satisfaction : Par

 Control Measures : Par

 People : Above Par

 Standards : Above Par

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 Thank you