NEW YORK (Reuters) – US investment bank Goldman Sachs Group Inc is adopting a performance appraisal system that will rate up to 10% of its 39,000 employees as underperforming this year, according to an internal memo sent Monday, which It could generate more job cuts in 2021 than the bank has made in recent years.
FILE PHOTO: The Goldman Sachs ticker symbol and logo are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, USA, December 18, 2018. REUTERS / Brendan McDermid / File Photo
Goldman Sachs’ new head of human resources Bentley de Beyer, who joined the bank in January, is revamping its opaque performance review process to make it more transparent and determine what proportion of staff is placed in each group, the spokeswoman said. from Leslie Shribman Bank.
The bank’s main objective is to inform staff about its position, as approximately 90% of the bank’s workforce works from home due to COVID-19 restrictions, said Shribman, who verified the content of the memo seen by Reuters. .
The Goldman Sachs review changes are another sign that COVID-19’s work restrictions are leading some large corporations to review their human resources policies.
“The dynamics of today’s challenges underscore the need for greater transparency in feedback and even stronger communication between our people and their managers,” Goldman Sachs Chief Executive David Solomon wrote in the memo to all staff.
Under the new system, 25% of staff will be rated “exceeds expectations,” 65% will earn “fully meet expectations,” and 10% will be marked as “partially meet expectations” in their annual reviews in December.
Employees will also have more frequent formal performance checks with their managers, at least three times a year starting in 2021, according to the memo. Previously, they met to discuss performance only a few times a year.
The Wall Street bank has not previously disclosed the percentage of employees in each performance group, and Shribman declined to say how the new percentages compare to the previous system.
Goldman Sachs is known for its tough annual review, which typically paves the way for an elimination of about 5% of staff, often for missed performance targets. The bank has said the cuts allow it to recruit a steady stream of new and diverse talent, which has become a priority for the past year.
It has not made significant job cuts this year, and its workforce as of June 30 actually increased 10% from the same period last year.
Shribman declined to say whether the changes would lead to an increase in job cuts in 2021, saying that performance ratings are only one factor in those considerations.
Despite the difficult economic environment caused by pandemic closings, Goldman Sachs reported a 41% rise in quarterly revenue earlier this month due to strong revenue from commercial operations and investment banking.
Goldman Sachs’ annual sacrifice has long distinguished it from Wall Street rivals, who tend to periodically lay off massive layoffs.
Morgan Stanley, for example, laid off 1,500 of its approximately 60,000 employees last December. Its biggest previous cut was 1,200 employees in 2015.
Morgan Stanley CEO James Gorman, like the leaders of several banks in the US and Europe, has promised not to end in 2020 as the US economy struggles with mass unemployment.
Report by Elizabeth Dilts Marshall; Editing by Dan Grebler
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