Dive Brief:

• Legacy performance reviews continue to face the music. Beginning in June, Goldman Sachs is dumping its 1-9 numerical employee rating system. Later this year, the Wall Street investment bank will pilot a new online platform that offers continuous performance feedback from employees and managers, the Wall Street Journal reports.
• Goldman is following in the footsteps of employers, including General Electric, who are either scrapping their outdated annual performance reviews and numerical ratings or testing a replacement system, often an online app that offers frequent, two-way feedback.
• The Journal notes that Gap Inc., Adobe Systems Inc. and Microsoft Corp. have abolished numerical ratings.

Dive Insight:

In Goldman's case, like many other employers, the firm is not getting rid of annual performance reviews altogether, as it's keeping its 360-degree review in place, according to the Journal. Edith Cooper, the bank’s global head of human capital management, told the Journal that the focus will be on employees offering specific ways to improve their performance, which will replace rating performance for the previous year, she said.

Josh Bersin, a principal at Deloitte Consulting LLP, told the Journal that Goldman Sachs is an example of how employers are dumping number ratings as managers have come to see that “the person receiving the rating is now stuck with the number for an entire year that labels them."

As employee review systems undergo change, experts say companies should take caution. Employers should especially be careful with newer systems that boost input frequency, especially if they are anonymous, as they could emphasize certain biases if management isn't careful.