Management Accounting Case Study Citibank

Section 1- PERFORMANCE MEASUREMENT SYSTEM

1. Reasons for financial performance measuring
2. Limitation for non financial performance measuring (validity: meet the 9 criterias, e.g. timeliness, reliability, control…)

Recommendation: yearly ->we need a merit point system: below par* (0-1) , par** (1-3), above par (4-5)

*fail

**high fail

1. Evaluate the extent of non financial performance measurement affect the motivation for James. (Talk about the relationship between motivation and performance?)

Section 2- REWARD AND COMPENSATION SYSTEMS

1) Describe the reward systems of Citibank

(talk about the theories, use evidence from the case)

2) Advantages/disadvantages of financial measurement VS integrated/combination measurement system

Theories and evidence from the case ( all relevant to stakeholders)

Refer back to lecture 4

Section 3-

1. RELATIONSHIP BETWEEN REWARD SYSTEM AND MOTIVATION**

James got promoted really fast because he focused on financial performance >promotion-> more wages

1. NON FINANCIAL VS CURRENT FINANCIAL

Which one is more important? (Future benefits)

Section 1

1)Validity:

a) Evaluating ATM (out of control of manager)

Remove the unrelated assessment criteria from valuating the manager (such as ATM)

Jame’s responsibility: Seeking a report daily basis from maintenance department for ATM

James not responsible for 24 hours telephone service

1. Service systems of Citibank

Maintenance division

Telephone services

2) Reliability:

The way they evaluate (only use three par)

THEY USE JOINT EVALUATION: fail/good/excellent

OUR SUGGESTION: 0-2.5, 3-4, 4-5( good)

The way of measuring performance is not accurate to evaluate the manager’s performance

Increase from Customer satisfaction:  ??/80 to 72/80 from  previous quarter to current

c) Controllability?

SECTION 2:

Identify and describe the rewards:

Extrinsic rewards

-Derives from sources outside the individual

#Positive incentives

-Reward is separable outcome from doing of task

-Formally designed and linked to MAS