When Goldman Sachs cleared out underperformers last week, it did so based on the results to staff appraisals. The move marked a resumption of Goldman’s strategy of eliminating the bottom 1%-5% of performers, which was put on hold during the pandemic.
In the bad old days, Goldman would have used its five-quartile forced ranking system, based on results to its 360-degree appraisals, to identify its laggards. Historically, Goldman employees were either ranked as top quartile (top 25%), second quartile (next 25%), third quartile (next 25%), fourth quartile (next 15%), or bottom decile (next 10%) - bad.