At Citibank, California, the President and management are discussing the evaluation process and new performance scorecard. The main focus is on assessing James McGowan’s performance and making bonus decisions. McGowan has made significant progress, moving up from assistant branch manager to manager.
His performance in each year has surpassed expectations, particularly in terms of financial results, which have been truly remarkable. Additionally, he implemented a new performance scorecard that incorporated customer satisfaction scores, indicating a broader approach to evaluation. The president of Citibank California, Frits Seekers, firmly believed that measuring customer satisfaction was crucial not only to meet the growing demands of sophisticated clients but also to accomplish divisional strategic objectives and maintain competitiveness.
James demonstrated impressive performance in all areas except for Customer Satisfaction, which is a crucial aspect when measuring overall performance, particularly in the inking sector. The objectives include comprehending the significance of the performance scorecard, the reasons for implementing it, its alignment with the company’s strategy, its functioning, and the benefits that both the company and employees can derive from this evaluation system. Furthermore, understanding all the components of the performance evaluation system, their relevance and importance to the overall system, and the parameters on which these components will be assessed are essential goals.
The performance valuation system should aim to bring objectivity to its components in order to avoid ambiguous results, negative effects on incentives, and other related areas. In the case of James McGowan’s performance evaluation, he excelled as the manager of the challenging Los Angeles branch and generated the highest revenue in the company. However, his low rating in customer satisfaction posed a difficulty for Lisa Johnson when giving final recommendations. This flaw in the customer satisfaction indicator was due to its recent introduction, lacking specific criteria for employee rating. To properly apply the indicator, it was necessary to introduce objectivity into the system. Citibank’s new Performance scorecard included six measures in its components: financial, strategy implementation, customer satisfaction, control, people, and standards. The objectives were focused on accomplishing the company’s strategic goals.
Performance scorecard metrics concentrate on quantifiable and practical indicators that aid in accomplishing organizational goals. At first, targets are established to synchronize expectations with strategic objectives for advancement. In the current business environment, the importance of customer satisfaction cannot be undervalued: The degree of satisfaction a customer has with an organization can significantly influence revenue. Studies reveal that a fully contented customer yields 2.6 times greater revenue than a satisfied customer and about 17 times more revenue than a somewhat dissatisfied customer.
It is crucial for organizations to achieve their long-term strategic goals that they establish a favorable brand image, build trust, and prioritize customer satisfaction. This is why Citibank has included the “customer satisfaction” metric in their performance scorecard. Additionally, performance planning offers a structured approach for individuals and teams to reach their desired level of performance by creating an initial plan and referencing improvement plans.
