Goldman Sachs (GS) is hoping to hold on to its employees longer in an industry that is famously cut throat.
The Wall Street titan has decided to cut its numerical ranking system for employees and opt for performance reviews in which workers can continuously give and receive feedback, the bank revealed in an internal memo. Goldman also plans to institute an online platform for some employees so that they can get feedback any time.
That means Goldman Sachs, which has been known to eliminate the bottom 5% of its staff near the start of every year, is dropping its nine-point numerical grade in favor of constructive criticism and qualitative feedback.
“We strive to create an environment where our people can perform to their fullest potential,” stated an internal memo Wednesday signed by CEO Lloyd Blankfein and President Gary Cohn. “Providing high-quality and ongoing feedback is at the heart of our culture, and is an important investment we make in our people and the future of our firm.“
Beyond factoring into whether an employee gets to stay on board, performance reviews have also decided bonuses and promotions. While the new reviews will also have an influence in those decisions, it’s unclear exactly how much weight they will carry.
Starting in June, the banking giant plans to roll out its new policies over the course of a year. The changes will ask managers give a written summary of their employees, alongside an overall rating about whether the worker was outstanding, good, or needs improvement. Goldman is also reducing the number of reviewers per employee from 10 to six as to save time.
Additionally, performance reviews will be given earlier in the year to give employees extra time to use the feedback to improve their work before bonus time.
The move comes at a time when Goldman Sachs has been trying to retain more of its junior bankers. The company has created an accelerated promotions program for performing bankers, and cut down on the grunt work that once fell to younger employees. as reports of younger bankers suffering “burn out” or leaving for other technology jobs emerge.