The Wall Street Journal reported today that investment bank Goldman Sachs is shaking up the way it handles performance reviews for its 35,000+ employees.
The firm has decided to do away with a company-wide grading system (where staff would each be rated on a scale of one to nine), and will soon incorporate an online system through which employees can give and receive feedback on their performance continuously — not just once per year.
The WSJ article noted that this subtle moves mark a softening of Wall Street’s typically rough-and-tumble, numbers-driven culture. Goldman Sachs, like other investment banks, typically cuts a percentage of its workforce each year — around 5 percent — to remove both underperformers and older, more-expensive workers. Such moves are expected to lead to lower employment costs and higher profitability.
But Goldman Sachs’s changes signal a bigger-picture shift to a newer way large companies hire, train, track and grade workers’ performance.
The ‘relative happiness of junior bankers’ is now more important to the firm, according to the WSJ. It should come as no surprise that even Wall Street firms are finding themselves catering to millennials and providing a work environment in which they thrive and perform their best.
Indeed, younger workers do not always seek the highest-paid positions, but rather those that provide a unique, personal experience that allows them to grow not only professionally but also personally.
Profits always come first — for Wall Street and other companies. Yet announcements like these continue to demonstrate that organizations are increasingly realizing the need to change the way employees are measured and motivated, so as to improve the bottom line.
