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Goldman Sachs Group Inc. is shaking up performance reviews for the firm's roughly 36,500 workers.

The Wall Street bank is eliminating numerical rankings in employee reviews starting next month, and this fall will experiment with an online system where employees can give and receive continuous feedback on their performance.

Big companies have been rethinking the way they track and grade workers' performance. Accenture PLC and General Electric Co. recently scrapped annual performance reviews in favor of more frequent check-ins between managers and employees. Gap Inc., Adobe Systems Inc. and Microsoft Corp. have abolished numerical ratings, which executives say can grind down employee morale.

Goldman, which announced the changes in a pair of firmwide memos, is not doing away with performance reviews entirely. Instead, the bank will focus on giving employees specific directives on improving their work rather than grading performance for the previous year, said Edith Cooper, the bank's global head of human capital management.

Bank employees want "more direction with respect to how they can improve," Ms. Cooper said. In internal surveys, Goldman staffers requested "more frequent and constructive feedback," according to one of the memos.

The firm will keep its 360-degree annual review, in which an employee solicits feedback from his or her manager and a select group of colleagues, including peers and reports. Gone is an employee ranking on a nine-point scale, she said.

More firms are eliminating numerical ratings for workers as bosses realize "the person receiving the rating is now stuck with the number for an entire year that labels them," said Josh Bersin, a principal at Deloitte Consulting LLP who advises companies on talent management.

Performance reviews play a role in determining employee bonuses and promotions at the firm, and will continue to do so, Ms. Cooper said. She declined to say how much weight those evaluations carry.

Goldman typically culls roughly 5% of its workers early in the year, in part to make way for new hires. This year, though, the cuts have been deeper in some of the businesses, like debt trading, that are wading through a prolonged slump.

The firm is also paring the maximum number of designated reviewers from 10 to six to decrease demands on colleagues' time, she said. Review conversations will now take place over the summer rather than in the fall, giving employees additional time to improve their performance ahead of bonus decisions and annual cuts.

In addition, Goldman will try out a Web-based tool for some employees to give and receive performance feedback at any time, Ms. Cooper said. The hope is that the additional input will lead to more frequent one-on-one conversations with employees and managers, she said. The bank has not determined which departments will try out the system.

The adjustments to its performance-review process are the latest in a series of management changes the firm has made in recent months, the bulk of which have been focused on retaining junior bankers. Last fall, the bank announced it would speed the path to promotions for top-performing analysts and associates, and would work to eliminate some of the grunt work that often falls to younger employees.

Justin Baer contributed to this article.

Write to Lindsay Gellman at Lindsay.Gellman@wsj.com

(END) Dow Jones Newswires

May 26, 2016 10:45 ET (14:45 GMT)

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