Management Accounting Case Study Citibank
Section 1- PERFORMANCE MEASUREMENT SYSTEMReasons for financial performance measuring 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 failEvaluate 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 SYSTEMS1) 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 systemTheories and evidence from the case ( all relevant to stakeholders)Refer back to lecture 4Section 3-RELATIONSHIP BETWEEN REWARD SYSTEM AND MOTIVATION**James got promoted really fast because he focused on financial performance >promotion-> more wages
NON FINANCIAL VS CURRENT FINANCIAL Which one is more important? (Future benefits)Section 11)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 serviceService systems of CitibankMaintenance divisionTelephone services2) Reliability:The way they evaluate (only use three par)THEY USE JOINT EVALUATION: fail/good/excellentOUR SUGGESTION: 0-2.5, 3-4, 4-5( good)The way of measuring performance is not accurate to evaluate the manager’s performanceIncrease from Customer satisfaction:  ??/80 to 72/80 from  previous quarter to currentc) Controllability? SECTION 2:Identify and describe the rewards:Extrinsic rewards-Derives from sources outside the individual#Positive incentivesReward (positive)Punishments (negative)Bonuses (monetary)No bonusesSalaries increasesNo raiseRecognition (non-monetary)No promotion-Reward is separable outcome from doing of task-Formally designed and linked to MAS