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Brief overview of the case
Citibank has introduced a new performance-scorecard system composed by six different types of measures: financial, strategy implementation, customer satisfaction, control, people and standards. These measures were the basis for the quarterly and yearly evaluation of branch managers that could have an overall rating of “below par”, “par” or “above par”. The aim of these new evaluation measures is to reflect the importance of non-financial measures as primary indicators of implementing a strategy.
Frits Seegers, President of Citibank California, was meeting his team to analyze the performance evaluation and the bonus decisions for the branch managers. James McGaran, a manager of the most important branch in the Los Angeles area, ranked “above par” in financial measures and therefore he received a full bonus. However, with the new measures introduced, James had scored “below par” on customers satisfaction, which gives him a “par” overall evaluation.
As a result, Frits has a tough decision to make: how to evaluate an outstanding branch manager, James McGaran, who has scored poorly on an important customer satisfaction measure.
Introduction of the New Performance Scorecard
Citibank introduced a Performance Scorecard with the primary purpose of setting goals and allow managers to complete performance reviews using both qualitative and quantitative measures. This new evaluation system reviewed the performance evaluation and bonus decisions that were taking place in the company, highlighting the importance of a diverse set of measures in achieving the strategic goals of the division.
In the past, financial measures had dominated Citibank's performance evaluation since they are important tools to analyze the performance of the bank. However, they do not provide any perception about non-quantifiable measures that may be equally important in performance assessment. Therefore, top managers in the division felt that base the performance...
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