In the contemporary business environment, a certain shift in the decision-making paradigm is observed. Historically, companies aimed at meeting their internal objectives by, for example, attaining the desired amounts of production or sales levels. While these metrics retain their relevance in the modern environment, new aspects of successful business practices are introduced and actively promoted by the corporate community. Previously, managers and entire organizations used to be evaluated primarily by their industrial success. However, new performance indicators tend to incorporate such an important element as customer satisfaction. Today, more attention is paid to a company’s relationship with its clients and consumers, as the global business tendencies appear to rely on a customer-centered operational framework. The case of Citibank illustrates the process of this shift, as the introduction of a new indicator in the evaluation scorecard redefined the perceived performance of some managers.
The emergence of the scorecard and its components is conditioned by objective reasons and underpinned by Citibank’s performance at the time. According to the case study information, Citibank remained a “niche player in the California market” (Citibank: performance evaluation, 1999, p. 2). The strategy of the company relied on flexible relationship banking, providing its customers with a personalized experience. James McGaran’s branch was located in the financial heart of Los Angeles, and its customer base included high-profile clients, whose service requirements grew along with their net worth. However, prior metrics and evaluation techniques within Citibank rated its managers’ performance based solely on professional and financial results (Citibank: performance evaluation, 1999). Ultimately, the executives of the company approved a new approach, according to which extended scorecards were to be implemented, along with the customer satisfaction metric. This innovation responded to the challenges of the high-end banking services, at which Citibank was aiming.
The new system was designed, tested, and implemented in time for the 1996 evaluation, which yielded surprising results. Some managers, including James McGaran, who previously ranked well, received “below par” evaluation scores. This section examines the 1996 scorecard for James, which included some positive comments from Lisa Johnson, the area manager.
Above Par – James’ division showed stable financial results throughout the year, ending it steadily above plan.
Par – The branch led by James continued to grow in 1996 and completed several acquisitions, but such results would have been expected.
Below Par – The branch showed mixed results throughout the year, and the situation only improved by Q4. Considering the company’s emphasis on this aspect, the overall performance is subpar.
Above Par – Both audits in 1996 were excellent, which speaks of James’ operational control over the branch.
Above Par – James’ team is highly disciplined, and he continuously works on his skills, for example, through obtaining an MBA degree.
Par – While the branch implements most of the standards in an excellent way, this success is balanced by the customer satisfaction issues, as this point appears to be relevant, considering the company’s new policy.
Par – From a financial perspective, James and his team had a good year, which, however, was tainted by missteps in the area of customer relations. Further work in this direction is required.
Overall, the introduction of the new scorecard in Citibank corresponded to the spirit of the time. Customer satisfaction is an essential metric in the area of relationship banking, which is exactly how Citibank positioned itself. James McGaran was unable to attain the desired level of customer satisfaction for most of 1996, which was reflected in his final evaluation. However, despite the emphasis on client experience, financial and organizational metrics should preserve their importance. Therefore, the “below par” mark appears to be excessively harsh, and James would deserve a “par” score for his success in professional areas.
Citibank: performance evaluation. (1999). Harvard Business School. Web.