Dive Brief:

• Goldman Sachs is revamping its performance review system, according to an internal memo seen Monday by Reuters. At employees' annual reviews in December, 25% of staff will be deemed "exceeds expectations"; 65% will be given "fully meets expectations"; and 10% will receive "partially meets expectations."
• The bank had not previously indicated what percentage of its workforce was assigned each grouping. Goldman Sachs spokeswoman Leslie Shribman declined to tell Reuters how the new proportions compare with the previous system. However, the bank typically cuts 5% of its staff yearly, often for missing performance targets.
• Bank employees will have at least three formal performance check-ins with their managers starting next year, according to the memo. The increase from roughly twice-a-year check-ins may be in response to the sharp uptick in remote work forced by the coronavirus pandemic. About 90% of the bank's employees are working outside the office, Shribman said.

Dive Insight:

"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 wrote in the memo.

The performance review overhaul, led by Bentley de Beyer, who joined Goldman in January as global head of human capital management, leaves open to speculation whether the bank is gearing up to shed double its typical proportion of workers next year. Shribman declined to tell Reuters how updates to the performance review system would affect 2021 job cuts — only that performance grades are one of the factors the bank considers.

Goldman is one of few major U.S. banks that did not say in March how the coronavirus would affect its headcount. A number of banks, including Morgan Stanley and Bank of America, pledged not to cut any jobs in 2020. Other banks said they would temporarily pause layoff plans during the pandemic. Wells Fargo is reportedly drafting plans that could cut tens of thousands of jobs starting this year — a move that could signal to other banks that the pause is over. Banks such as HSBC that had already begun layoffs before the pandemic hit have resumed staff cuts.

Goldman Sachs has not made major job cuts this year, and in fact, its headcount is up 10% from a year ago as of June 30, Reuters reported.

However, accelerated job cuts could help the bank more quickly make room for more diverse staff — a goal it laid out last month in response to increased focus on racial representation and equality brought on in the wake of the May killing of George Floyd.