Performance management is a process to ensure that the employees are contributing toward the overall goals of the organization. Performance management has around three phases like goal setting, dialogue and….
Case Stduy on Citibank Performance Management
This case revolves around the performance evaluation process at Citibank and the introduction of a new performance scorecard. The meeting is between the President of Citibank, California and his management to discuss the performance evaluation and bonus decisions for James McGowan, the star performer of the branch James career with Citibank has been a quick progression through the ranks from the assistant branch manager to the manager position.
His performance exceeded expectations In every single year especially financial results which have been truly Impressive. The company introduced the new performance scorecard which reflected the company’s broadening of the evaluation scope to customer satisfaction score. Frits Seekers, President of Citibank California, was convinced that customer satisfaction indicator was important not only for meeting ever-increasing expectations of highly-sophisticated clients, but also for achieving strategic goals of the division, and staying competitive.
Performance of James was impressive in all the dimensions except Customer Satisfaction which is an important dimension for assuring overall performance especially in banking sector Objectives 1. Understanding the Importance of performance scorecard, why In the first place It is implemented, does it fit the company’s strategy, how does it work and what will the company as well as its employees derive out of that performance evaluation system? 2. Understanding all the components of the performance evaluation system, their relevance and importance to the system and on what parameters the components involved will be assessed. . Bringing In objectivity to the components Involved In the performance evaluation yester because any component with subjective evaluation can lead to an ambiguous result and hence can show negative effect on the incentives and other related areas. Problems Performance evaluation of James McGowan. Lames McGowan was the manager of most important and difficult branch- Los Angels of the Dillon. HIS overall performance and rating was very good and he also generated the highest revenue In the company. But only problem was his low rating in customer satisfaction.
So it was difficult for Lisa Johnson to give final recommendations. ; Flaw in customer satisfaction indicator. As it was newly introduced by the company, It did not had any specific grounds on which the employee was to be rated. There was need to bring some objectivity In the system for its proper application. Theoretical Concepts 1 OFF In Citibank’s new Performance scorecard, six measures were included biz. Financial, strategy implementation, customer satisfaction, control, people and standards. The objectives were focused on what the company needed to do in order to accomplish its strategic goals.
The metrics of a performance scorecard deal with actionable and negligible measurements which help in achieving the objectives of an organization. Targets are set initially and these are the expectations set against the strategic goals which need to be fulfilled so as to progress. The importance of customer satisfaction in today’s business environment: The level of satisfaction a customer has with an organization can have profound effects on revenues. Studies indicate that a totally satisfied customer contributes 2. 6 times the revenue than a satisfied customer and about 17 times the revenue as a somewhat dissatisfied customer.
Apart from the monetary benefits, customer satisfaction leads to building a brand image and trust among them. This helps the organizations in achieving their strategic goals in long-term. Hence, this vital component should be explained to James as to make him understand why Citibank had introduced the ‘customer satisfaction’ measure in their performance scorecard. Performance planning: This helps in providing a structured approach for attaining the desired level of performance for both individuals and teams. Performance planning should have an initial performance plan and a performance improvement Lana.
An initial performance plan identifies the specific goals for development, performance measures, actions needed to achieve goals and an indication of time required to achieve them. A performance improvement plan conveys the area of performance that needs improvement, the actions to be taken, timeshare for achieving each action, review method of performance improvement and when performance improvement will be evaluated. Hence, a proper performance planning should be done before introducing any new component in the appraisal process.