Introduction
Citibank has been a prosperous financial institution for more than 180 years. One of the
key components that have made this institution very successful is their focus in offering a
personalized banking experience integrated with great customer service, providing higher
profitability. However, in the California division, the financial targets became more
important throughout the years, leaving behind the importance of customer satisfaction. It
is now the main focus of the California division to improve on customer satisfaction
ratings before their financials catch up with the number of complaints that have been
received in various branches.
In 1995, the California division of Citibank decided to implement a new performance
scorecard to measure more efficiently the performance of various divisions within the
company and how those performances aligned with the strategic goals of the division.
Since performance scorecards were filled out by the employee’s immediate supervisor, this
would also serve as a basis for determining an employee’s bonus opportunity. One of the
new metrics highlighted in the performance scorecard was customer satisfaction. Lisa
Johnson, the Los Angeles area manager, was put in a tough spot when she had to evaluate
James McGaran.
James McGaran is the manager of the flagship office of Citibank in the Los Angeles area
which also happens to be the most important of Citibank’s 31 branches. He delivered
impressive financial results for four years in a row, exceeding expectations every single
year. But when customer satisfaction was included as a decision parameter, it was evident
that James did not fare very well on that front. The new criteria for employee evaluation
are as follows:
• Financial Measures: Focused on total revenue and profits.
• Strategy Implementation: Tracked revenue from a particular segment relevant to
the bank’s strategy.
• Customer Satisfaction: Emphasized long term association with customers using
feedback gathered through surveys.
• Control Measures: Based on the banks internal control processes. If rating < 4,
bank is said to be at risk.
• People and Standards: Focused on the efforts of the manager to develop and
communicate with peers/employees.
Based on the employees performance in these factor, a rating of above par, par, or below
par was given. Finally, an overall rating for the manager was awarded.
Due to the change in performance evaluation criteria, two major complications flared up:
First and foremost, Lisa Johnson has to decide the rating of James. According to bank’s
rule an employee can be given above par rating if and only if he is performing at par in all
