Citibank: Performance Evaluation Case Analysis

November 21, 2010

James McGaran’s Performance Evaluation.

Doing the year-end performance evaluation for James McGaran, the branch manager of the flagship office in the Los Angeles area, was probably one of the most difficult experiences in all my years with Citibank in the capacity of area manager.

James has been not just an exemplary employee in our area, but really someone who other branch managers could always look up to. His career with Citibank has been a quick progression through the ranks from the assistant branch manager to the manager position at the most important of all the bank branches in the Los Angeles area – the Financial District office. Until this year his performance exceeded expectations in every single year. His financial results have been truly impressive.

However with the introduction of the new performance scorecard which reflected the company’s broadening of the evaluation scope to customer satisfaction score, it became obvious that this was essentially the only area where James’ performance was lacking. At the same time Frits Seegers, President of Citibank California, was convinced that customer satisfaction indicator was important not only for meeting ever-increasing expectations of highly-sophisticated clients, but also for achieving strategic goals of the division, and staying competitive.

Since five of the six performance measures in James’ year-end evaluation were “above par”, the customer satisfaction rating was the only one that caused a significant challenge and had substantial financial repercussions for James’ year-end bonus, which was a significant part of his base salary.  Based on his customer satisfaction scores, which was “below par” according to the banks written guidelines, his total evaluation could be only “on par” in spite of the fact that he excelled in five other performance areas. Not only would it be a substantial financial shortfall in total annual compensation for James, but it would also deal a blow to his self-esteem. Having worked with James for the last eleven years I know that he is very conscientious worker and takes personal pride in successfully running the hardest of branch in the division.

Therefore it is with much heartwrenching feelings that I have to give him “below par” rating in customer service satisfaction category.  The company’s policy states it clearly that “a branch obtained par score if it scored 74 to           79”. Unfortunately, in spite of a dramatic improvement in customer satisfaction score in the fourth quarter from 54 to 72, the branch still did not meet the minimum required score for “on par” rating.

The temptation to make concessions in James’ case was very big. Frankly, I could imagine that this evaluation could cause him to consider leaving the company, not even so much because of the reduced bonus, but also because of the feeling of being treated unfairly or not being valued by the company. I also recognize that losing James would be a significant loss for our bank, notwithstanding the fact that it would be hard to find as qualified and dedicated manager as James for this particular branch.

However, if we bend the rules, and compromise in this particular case by giving James “on par” evaluation for customer satisfaction, the damage to the company’s management team reputation and image would potentially have far more reaching negative consequences. It would cause a great damage to the morale of the 30 other branch managers in the area. It would stir speculations, gossip, accusations in favoritism. Ultimately, if we have to make a negative evaluation of other employees based on the company approved metrics and stick to the rules, without giving them any concession, it could become a basis of labor dispute and even litigation by a disgruntled employee. Ironically, they would feel being dealt “unfairly” exactly because we are playing by the rules in his or her particular case.

Finally, I believe that James is not only ambitious, highly qualified employee, but also a mature person. We would have to arrange a special meeting with him to explain our position, and to work out the plan for the future to help him improve the customer satisfaction rating, so next year we would not have to go through this agonizing experience any more.