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July 28, 2020

Goldman Sachs paves way for redundancies with new staff review system

Goldman Sachs will reportedly revamp its employee performance review system this year in order to make it more transparent, a move that is expected to result in more redundancies in 2021.

Under the bank’s new human resources head Bentley de Beyer, the bank looks to rank up to 10% of its 39,000 staff as under-performers in its annual review carried out in December, reported Reuters citing an internal memo.

The revamped system will grade 25% of its employees with “exceeds expectations,” 65% with “fully meets expectations,” and 10% with “partially meets expectations”.

Earlier, the bank did not reveal the percentage of staff in each performance group.

However, Shribman has not commented on the new percentages’ difference with the previous review process.

The memo further said that the bank’s staff will now have more frequent formal performance check-ins with their managers.

These checks will now be reportedly conducted at least thrice annually from 2021, unlike the previous practice of twice per year.

The revamped review process will let the employees know where they stand as around 90% of them work remotely amid the COVID-19 pandemic, noted the bank spokeswoman Leslie Shribman.

Usually, the bank’s annual review is said to result in layoffs of around 5% of its staff mainly for failing to meet performance targets and helps the bank in making new hires.

The bank has not announced major redundancies this year. At the end of June 2020, the number of its employees rose 10% from the prior year.

Shribman did not indicate if the changes in the review process would lead to more redundancies in 2021.

“The dynamics of today’s challenges underscore the need for more transparency in feedback and even stronger communication between our people and their managers,” Goldman Sachs CEO David Solomon said in the memo.

In Q2 2020, Goldman Sachs withstood the Covid-19 onslaught to post a 41% surge in net revenues, driven by trading boost.

Meanwhile, last month, the bank said that it is planning to restaff some of its US offices.

The process initially involves the return of a group of employees to the bank’s New York, Jersey City, Dallas and Salt Lake City offices.

 

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