Lisa Johnson is the area manager for Citibank's Los Angeles area. James McGaran is the branch manager of Citibank's largest Los Angeles branch. Citibank implemented a balanced scorecard to evaluate manager performance across financial, strategy, customer satisfaction, control, and people measures. For James' first evaluation, he scored above par in all areas except customer satisfaction, which was below par. His overall evaluation was still above par given his strong performance otherwise and that it was the first year of the new system. Management advised him that he needs par ratings in all areas for an above par overall rating in the future.

1. Group-3

2. Frits Seegers : President of Citibank California
Lisa Johnson : Area Manager
James McGaran : Branch Manager of Los
Angeles Area Branch.

3.  Los Angeles area Manager.
 Joined the company in 1978 in Chicago and
moved to California in early 1988.
 Her area was the biggest in the division and
included two regions that had previosly been
managed separately.
 Supported many managers and was well
versed with the events in each branch.

4.  Working in the banking industry since 1977.
 Joined Citibank in 1985 as assistant branch
manager.
 Promoted as Branch Manager of Los Angeles
area branch.
 The branch in which he was working had very
diverse customer base.
 He had delivered impressive financial results
for four years in a row from 1992.

5.  Set clear goals for appraise and provide
specific measures for the person doing
appraisal
 Includes both quantitative and qualitative
parameters
 Provide organization with tools to do
strategic management and operational
control
 Helps executives to focus on several
important measures that drive the strategy

6. They implemented performance scorecard
specifying goals and measures manager’s
performance in 6 areas:
 Financial measures
 Strategy implementation
 Customer satisfaction
 Control measures
 People
 Standards

7.  Financial Measures : Focused mainly on total
revenue and profit margin against targets.
 Strategy Implementation : Measures tracked
revenue for different types of target customer
segments relevant to the strategy of the
branch.
 Customer Satisfaction : Derived from
questions that focused on branch service as
well as other citibank services .

8.  Control Measures : Reported by evaluation by
internal auditors on the branch’s internal
control processes.
 People and Standards : Non qunatifiable
ratings determined subjectively by the branch
manager’s boss.

9.  3 types of ratings for each performance
indicator.
 Below-par, Par and Above-par.
 Evaluation was determined jointly by a team
led by Frits Seegers.
 Bonus linked to final performance score card
rating.
 A manager could not get an “above par”
rating without “par” ratings in all the
component.

10.  Highly sophisticated client base.
 Including the component of services
evaluation like 24 hours phone banking and
ATM services.
 While measuring the customer satisfaction
the survey was done with a small sample size.

11.  Financial measures: Above Par
 Strategy implementation: Above Par
 Control measures: Par
 People: Above Par
 Standards: Above Par
 Customer Satisfaction: Below Par

12.  Diverse set of customers.
 The branch that was handled by James was
the largest and toughest branch in the
division.
 Had a demanding clientele and challenging
competition.

13. • Overall Evaluation: Above Par
◦ This is the first year the balanced scorecard was
implemented. It will take sometime to insure that all
the areas are measured appropriately
◦ He has done exceptionally well across the scorecard
and he is consciously making efforts to over come the
issues in customer evaluation rating
◦ Management should also have a look on James’ peer
group ratings to ensure customer satisfaction is fair
indicator which can be linked to overall performance
◦ As this is the highest revenue generating branch any
decision which may have an impact on revenues
generated from this branch should be with utmost
surety

14.  James should be aware that his concerns with the customer
survey and consistently exceptional performance were the
main reason for management’s decision
 He should also be told that in the future he will not get an
above par rating if he fails to score par on all the measures
 Also the importance of non quantifiable measures should
be communicated to James and across the organization

15.  Unsatisfied with Appraisal:
◦ Complaint that top management assess behavior
without knowing practical constraints
◦ Decreased dedication towards the areas in which he
is a top performer
 Satisfied with Appraisal:
◦ Perception of being valued and being part of
organizational team
◦ Highly motivated for the improvement towards
points mentioned in feedback
The operation may have succeeded, but the patient died.- By anonymous