Written Analysis and Communication

Case Analysis of
Citibank’s Performance Evaluation

Submitted by-
Udit Gurnani
18PGDM00B043
PGDM(Energy Management)
INDEX

TOPIC PAGE NO.

1. SITUATIONAL ANALYSIS 3

2. PROBLEM STATEMENT 4

3. OPTIONS 4

4. CRITERIA FOR EVALUATION 5

5. EVALUATION OF OPTIONS 6

6. RECOMMENDATIONS 7

7. ACTION PLAN 7

8. CONTINGENCY PLAN 7
SITUATIONAL ANALYSIS

Citibank was a niche player in the California market and was making a shift
towards a more customer focused as well as friendly environment as
previously financial measures had dominated Citibank’s performance
evaluation and the top management on Citibank believed that only using
financial aspects to measure the performance of managers were poor vehicles
to communicate the high service strategy of the bank. The evaluation on the
basis of both, the financial and non-financial aspects is what the top
management believed that will drive the future growth of the organization.
Citibank thus identified the need to include non-financial elements in its
performance evaluation scheme and therefore bought a change in the
Citibank’s business model. They implemented a scorecard to address the
strategic objectives of the bank and measure both the qualitative and
quantitative aspects. This would help in focusing the attention on those
dimensions that were critical for the long-term success of the organization. The
new performance evaluation plan came up and was completely in the
California division of the organization and it was built around six different
types of measures which were:-
• Financial
• Strategy Implementation
• Customer Satisfaction
• Control
• People
• Standards.
As it was a new method of evaluating performances, there might have been
some problems in the design of the evaluation scheme in the qualitative
aspects which were newly implemented.
PROBLEM STATEMENT

As we study the design of the new evaluation scheme regarding the non-
financial aspects, the question arises whether the evaluation scheme is
adequate to determine the actual effectiveness and efficiency of the person
being evaluated?

OPTIONS

1. Discontinue the current framework for evaluating personnel on the non-

financial aspects and give the appraisals as it was being done previously before
the implementation of the new scheme.

2. Delay the appraisals and modify the design of the evaluation scheme in
place and re-evaluate the personnel on the basis of the modified design.

3. Use the current evaluation scheme for determining the appraisals and
develop a new and better scheme for the next evaluation.
CRITERIA FOR EVALUATION OF
OPTIONS

1. DETERMINING THE ADEQUACY OF THE CURRENT EVALUATION SCHEME:

The evaluation design for qualitative aspects had several drawbacks such as
performance measuring elements were carrying the same weight which
resulted in incorrect overall performance evaluation of a manager. The
scorecard also had only three ratings (below par, par, above par) with the
below par from 0-74, this rating scale was too big. The customer satisfaction
survey was conducted on only 25 customers every quarter which is a very
small quantity of the total volume of the customers that visit the bank. The
scorecard was implemented across all the branches which resulted in
misleading data as different branches operated in different competitive
environments. The performance scorecard was measuring elements that were
outside the scope of some managers such as James being evaluated on ATM
performance, 24-hour banking and home banking services. Hence, it can be
justifiably be said that the evaluation scheme was inadequate to measure the
performance of the managers.

2. MODIFICATION OF THE CURRENT EVALUATION SCHEME: The current

evaluation scheme could be modified to suit the needs of getting a better
performance evaluation of the managers. The sample size of the customer
satisfaction could be increased, different scorecards could be developed for
evaluation of performance in different environments, and the elements which
are outside the scope of some managers should be excluded from their
evaluations. These are some of the ways through which, the current evaluation
scheme could be modified.
EVALUATION OF OPTIONS

OPTION 1: Discontinue the current framework for evaluating personnel on the

non-financial aspects and give the appraisals as it was being done previously
before the implementation of the new scheme.
If the current evaluation system is disregarded, the evaluation will be done on
the basis of the financial indicators and it would be fair to the personnel who
are being evaluated and the appraisals would be given accordingly. This would
help maintain the balance in the organization as it would not hurt the morale
of the employees and they would be motivated for working for the
organization. However, this option would certainly affect the long-term goals
of the organization of providing better services to the customers. The other
issue that would come up would that the managers could stop taking the top
management seriously and thereby the effectiveness of the top management
could fall to a certain extent.

OPTION 2: Delay the appraisals and modify the design of the evaluation
scheme in place and re-evaluate the personnel on the basis of the modified
design.
The appraisals could be delayed and this would give ample amount of time for
the top management to modify the existing performance evaluation scheme
which would suit the needs of the organization. This would also result in a fair
evaluation of the managers. This would also help in the pursuance of the long-
term objectives of the organization which is to provide better services to the
customers. It would also not hurt the morale and their motivation would still
be high. The top management would be taken upon seriously by the managers
and thus their effectiveness and control would be maintained.

OPTION 3: Use the current evaluation scheme for determining the appraisals
and develop a new and better scheme for the next evaluation.
If the current system is used for performance evaluation, this would result in
an unfair evaluation of the managers and the appraisals would also be given
accordingly. The long-term goals of the organization which are to provide
better services to the customers will be pursued from further evaluations. This
system will also affect the balance of the organization as the evaluation
scheme might hurt the morale of the managers and therefore, they could their
motivation. However, it would result in the managers taking up the
management seriously and thereby maintaining the effectiveness of the top
management.

RECOMMENDATIONS

The second option that is, to delay the appraisals and modify the design of the
evaluation scheme in place and re-evaluate the personnel on the basis of the
modified design is the most feasible alternative and should be implemented.

ACTION PLAN

Firstly, to re-evaluate the personnel, the existing performance evaluation

system should be modified according to the needs of the organization and the
data for the last quarter should be collected and the personnel should be
evaluated accordingly. This should be done swiftly in a very short span of time
as the appraisals cannot be delayed for a long period of time. This would
ensure the fair evaluation of the managers.

CONTINGENCY PLAN

If the option is not implemented on time, the purpose of the evaluation would
be defeated and in that case, we could use the next promising option that is to
discontinue the current framework for evaluating personnel on the non-
financial aspects and give the appraisals as it was being done previously before
the implementation of the new scheme. This would at least ensure a fair
evaluation of the managers.