Citi employs a ranking system across its 200,000 employees that evaluates them on a forced curve, a method which has received criticism and resulted in some employees feeling unrecognized despite meeting their role’s requirements. This ranking system significantly impacts decisions on promotions, bonuses, and in some cases, job security.
Managing directors, both current and former, have conveyed their concerns over this evaluation process, describing it as political and stressful. Indeed, Citi recently promoted 344 new managing directors, the largest class in years, raising the stakes on these reviews. The review pits employees against each other, with managers tasked to allocate limited top rankings, often sparking heated discussions during calibration meetings.
Despite the contention, a Citi spokesperson defended the ranking process as fostering a meritocratic environment where consistent standards are applied in evaluations. This perspective is not universally shared within the company, as internal politics and favoritism perceptions add to dissatisfaction and anxiety among employees.
John Frehse, a senior managing director at management consultancy Ankura, criticized the ranking practice, highlighting its subjective nature. He expressed concerns that stack ranking might lead to a lack of trust among employees, particularly when facing layoffs or organizational changes.
Amidst the turmoil and changes within the company under CEO Jane Fraser’s leadership, including layoffs and divestitures, the focus of the ranking system on performance remains intense, affecting job security and creating an environment of competition and unease.
The ranking system has historical roots dating back to techniques popularized by General Electric, known as “rank and yank.” Although the practice has been abandoned by many companies for its contentious nature, it remains in some financial institutions. The variability in the application and adherence to such systems across the banking sector exemplifies ongoing debates about their effectiveness and fairness.
Citibank’s use of a forced ranking system exemplifies the challenge of balancing fair employee evaluations with corporate competition. As the bank undergoes strategic transformations, the ongoing debate over this system’s efficacy and fairness continues to impact its workforce and culture.
Source: BusinessInsider
