Goldman Sachs Dumps Employee-Ranking System
May 26 2016 - 11:00AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
GE Aerospace (NYSE:GE)
Historical Stock Chart
From Aug 2024 to Sep 2024
GE Aerospace (NYSE:GE)
Historical Stock Chart
From Sep 2023 to Sep 2024