Citibank Case
Evan Anderson

In 1996, Citibank California introduced nonfinancial performance indicators into the balanced scorecard that was used to measure branch manager performance and determine their bonuses. Frits Seegers, the president of Citibank California believed that customer satisfaction was a critical measure for the long term success of the bank, so much so that customer satisfaction was included on the balanced scorecard for 1996.James McGaran was the manager of a branch in the LA financial district. This branch was the most important in the region. The customers of the branch consisted of many sophisticated customers as well as those simply banking for convenience. The sophisticated customers, along with the fact that Wells Fargo and Bank of America had branches within one block, made this location a challenging one to manage. Branch managers’ bonuses were determined through a system of ranking each aspect of the balanced scorecard “below par”, “par”, or “above par”. If any single aspect was rated below par, the overall score could no longer be above par, and the maximum bonus the manager would be eligible for would be 20% as opposed to the 30% an above par rating would command. James excelled in every aspect of the scorecard except one, customer satisfaction. While strict application of the scorecard policy would give James a par rating, management wanted to look into this further. After all, James performance across all other aspects was extremely good. The fact that the branch had so many sophisticated customers could have an impact on the satisfaction of his branch customers. He had been working hard all year to do all he could to increase satisfaction in his branch. By the fourth quarter, he had actually achieved an acceptable customer satisfaction level. In addition many of the centralized services he had no control over such as ATMs could