Goldman Sachs is adopting a performance review system that will rate up to 10 percent of its 39,000 employees as underperforming this year, according to an internal memo sent Monday, which could lead to more job cuts in 2021 than the bank has recently made. years.
Wall Street Bank’s new head of human resources, Bentley de Beyer, who joined 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. Leslie Shribman bench.
The bank’s main objective is to inform staff where they are, as approximately 90 percent of the bank’s workforce works from home due to COVID-19 restrictions, said Shribman, who verified the contents of the memo as 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 generally paves the way for an elimination of about 5 percent 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 tough economic environment caused by pandemic closings, Goldman Sachs reported a 41 percent rise in quarterly revenue earlier this month due to strong revenue from commercial operations and investment banking.
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