OB and HRM

Assignment 4
Name: Rabeea Umair
ID: 19U00518
Section: B

Question: Read the case study “Citibank: Performance evaluation”, and explain why
Citibank has introduced performance scorecard?
Citibank has unveiled a new performance-scorecard system that is both comprehensive and user-
friendly. A regional president is faced with a difficult decision: how to grade an excellent branch
manager who has received a low score on a key customer satisfaction metric. This case includes
a grading sheet for the reader to fill out as well as an explanation of the decision's implications
for the company's strategy.

To fully comprehend Citibank's new performance review, we must first define the objective of
the performance scorecard. It's essentially an approach to emphasize the relevance of a wide
variety of indicators in attaining the division's strategic goals. In particular, according to Frits
Seeger, the high service quality parameters were important to the franchisees' long-term success.
In the new performance scorecard, the customer satisfaction and strategic issues were included.
The implemented performance scorecard specifies goals and measures manager’s performance in
6 areas:
 Financial measures
 Strategy implementation
 Customer satisfaction
 Control measure
 People
 Standards

As a result, the new scorecard includes six different viewpoints. The goal of putting the
scorecard performance assessment in place was to figure out what needed to be done in order to
fulfil the measuring views from a balanced standpoint. Then, there were objectives set for each
viewpoint, such as reaching a customer satisfaction rating of at least 80 in 1996.The balanced
scorecard's main function is to help supervisors set goals and conduct well-rounded performance
assessments using both quantitative and qualitative indicators. While financial indicators are vital
in reviewing a bank's success, they don't give any insight into non-quantifiable variables that
might be just as relevant in evaluating performance. Furthermore, the balanced scorecard
compels employees to take a larger view of the organization and focus on metrics that are
actually relevant to the company's performance, rather than just financial ones.

Customer satisfaction is very crucial in the service business when judging how well a firm is
performing. Citibank's approach in California revolves around providing excellent customer
service. Frit Seeger’s considers it a leading sign of the bank's future financial success. Customer
satisfaction scores do not follow the same pattern as financial success; therefore, it is vital to
assess customer satisfaction separately, based on prior experiences. In a competitive economy
where firms fight for consumers, Frits Seeger’s, President of Citibank California, believes that
customer happiness is recognized as a critical differentiator and increasingly has become a
crucial aspect of company strategy. Customers' expectations must be met in order for a firm to be
sustainable and profitable in the long run. This conclusion underpins senior management's
decision to build and finalize the former Citibank's performance evaluation system, which was
mostly focused on financial metrics.

Citibank decided it was necessary to update earlier evaluations to incorporate non-financial

indicators because they understood that these measures may be more critical to the franchise's
long-term performance owing to market shifts and greater competition. As a consequence,
Citibank was able to include competitive dimensions into its strategy by combining non-financial
and financial indicators.