- Goldman Sachs is reviewing its performance ratings and adding more frequent checks with managers, Reuters reported Monday.
- The review could lead to more job cuts in 2021 than Goldman had made in recent years, Reuters said.
- Goldman’s annual review process has generally seen that about 5% of its workforce is cut each year.
- The firm will also require its workers to meet with their managers up to three times a year to perform performance checks.
- Visit the Business Insider home page for more stories.
As the coronavirus pandemic progresses, one of Wall Street’s most elite banks is taking steps to review its performance review policy.
In a memo to staff, Goldman Sachs provided information on performance ratings and updates on new performance management measures, Reuters reported Monday. The review could lead to more job cuts in 2021 than Goldman had made in recent years, Reuters said.
The bank is unveiling a new performance rating distribution that will apply in late 2020, and the rating will be shared in annual feedback discussions, according to the memo to employees.
According to the memo, one in four employees in Goldman’s 39,000-person workforce will meet their performance threshold “exceeds expectations.” Approximately two out of three will be classified as “fully meets expectations”, and the bottom 10% of artists will be designated as “partially meet expectations”.
Read more: Here’s who is most at risk once Wall Street kicks off the wave of layoffs that many banks had put on hold
“Our evolved approach to performance management is to provide new opportunities for transparent communication, training and feedback, not job cuts,” Leslie Shribman, spokesperson for Goldman Sachs, told Business Insider on Monday.
Banks along Wall Street have vowed not to cut jobs during the pandemic, but some companies, including HSBC, have already resumed the massive planned cuts they had put on hold.
Goldman CEO David Solomon told Bloomberg TV last month that the company has not made any cuts in 2020 “because it was not appropriate,” but that it will resume its normal cuts next year, noting in that interview that Goldman hires 2,000 to 3,000 people. from school each year and generally observes the bottom 5% of the company to make room for new blood.
More generally, rankings can influence how many people who work on Wall Street are paid in bonus seasons. And a low ranking can also signal to those in an important position that it’s time to start looking for a new job elsewhere.
The architect of the new performance appraisal system, Reuters said, is Bentley de Beyer, the firm’s new head of human resources, who took office in January.
The head of human resources had said in an interview published on Goldman’s blog in January that he was “interested in what will motivate talent in the future and how we must adapt as a great global company to continue developing and retaining the best.”
See also: Inside the rise of Ram Sundaram, the leader of a secret Goldman Sachs bureau who coins billions by designing some of the bank’s most imaginative and controversial trades.
Goldman employees will have more performance checks throughout the year.
A new rating system is not the only change the bank will make to its performance review system.
It also requires employees to perform performance checks with their bosses at least three times a year from next year, Reuters reported for the first time, compared to a few times a year.
“Starting in 2021, we will implement The Three Conversations at GS, whereby managers set goals with their team members at the beginning of the year, check progress in the middle of the year, and then close the year with a conversation about performance versus to goals, “according to the memo, which Business Insider saw.
Read more: This is exactly what it takes to land a job as a banker at Goldman Sachs in 2020, according to Wall Street recruiters, current and former employees, and the head of human resources.
Getting a concert at Goldman is extremely competitive: The company receives up to a million applications for mid-level jobs each year, of which only 5,000 candidates receive offers, Business Insider previously reported.
Reuters reported that Goldman has not made any job cuts this year, and that the number of company employees increased by 10% as of June 30 from its staff numbers at the same time last year.
Are you a young person who works on Wall Street? Contact this reporter by email at [email protected], the encrypted messaging app Signal (561-247-5758) or send a direct message on Twitter @reedalexander.
Read more:
After flashy hires and major construction, Perella Weinberg’s media and telecom equipment has been gutted. We track the exodus, and what it says about the landscape of highly successful M&A deals.
Accenture is cutting U.S. staff, and top executives warned that there will be more pain as the consulting giant promotes fewer people and seeks to control costs.
Inside Goldman Sachs’ first in-person board meeting since the pandemic began
Goldman Sachs chief technology executive explains how a new series of senior employees are transforming the bank’s approach to creating products
Get the latest Goldman Sachs share price here.
