Team+6+-+Powerpoint+Outline

Chapter 7 - Rewards and Performance Management Goldman Sachs

__Jen:__ **Merit Pay** (compensation system that directly ties an individual’s salary or wage increase to measures of performance accomplishments during a specific time period and should create a belief among employees that the way to achieve high pay is to perform at high levels) -Each employee at Goldman Sachs receives an annual base salary. -An annual year-end bonus (provided in the form of cash and/or equity-based awards) would then be given to employees determined by the performance of each individual. -Salary (updated may 15, 2011) Analyst $61,658 Senior Analyst Developer $110,235 New Associate Programmer Analyst $68,845 Analyst/Developer $84,366 Associate $96,243 Research Associate $103,692 Finance Associate $100,763 Intermediate Associate $131,302 Vice President $148,852 Senior Analyst $76,846 http://www.glassdoor.com/Salary/Goldman-Sachs-Salaries-E2800.htm Performance of individual

**Bonuses -** Entry level employees are not eligible for performance bonuses in their first year of the job -Annual discretionary year-end bonus (in the form of cash and/or equity-based awards) -The purpose of the firm’s equity program is to attract, retain and motivate employees; to compensate them for their contributions to the long-term growth and profits of the firm; and to encourage them to acquire a proprietary interest in the success of Goldman Sachs. Employees who meet eligibility requirements receive equity-based awards, and thousands of current and former employees hold shares in the firm. -Article: In late January of 2010, partners of Goldman Sachs were told that their 2009 bonus will be paid 60% in stock that will vest over 3 years, which made the partners very happy. One partner states, “Cash loses value over time, while Goldman stock gains”. Also, many vice presidents received bonuses that matched or beat the numbers paid in the record year of 2007. In addition, several employees, including junior bankers, saw their base pay increase by as much as 50%.

Carney, John. "Bonus Watch 2010: Goldman Sachs Pays Huge Bonuses And Gives Junior Bankers A 50% Salary Raise."//Business Insider//. Business Insider, Inc., 28 Jan. 2010. Web. 24 May 2011. < [|__http://www.businessinsider.com/bonus-watch-2009-goldman-sachs-pays-huge-bonuses-and-gives-junior-bankers-a-50-salary-raise-2010-1__] >.

[] (an article that talks about how much money is spent on compensation in 2010 for the company)

__Emily:__ **Employee Stock Ownership Plans** (allow employees to own stock in their employer's business and benefit from future increase in the stock price) - -Stock Incentive Plan: give employees the opportunity to increase annual pay based upon either company performance or individual performance -Restricted Stock Units: shares of stock that an employee is eligible for after a certain restriction is fulfilled

http://gset.gs.com/cgi-bin/upload.dll/file.pdf?z01860f0az93c96623951340ef80e76d606b2ef9e6

-Health care: a choice of medical plans, as well as prescription drug, vision and dental care plans, which are available to all employees. -Insurance: life, disability and sickness, and business travel accident insurance plans. -Holiday and Vacation Policies: offered a competitive offering of holidays and vacation time, generally based on employee status and years of service.
 * Pay as Benefits** -

-Matching Gift Program: the firm will match donations -Education Reimbursement: tuition, preparatory courses and exams, and scholarships and fellowships -Employee discounts and services program: online discounts, household services, insurance and other special offers provided by outside vendors -Discounted banking, loans, and mortgages -Employee Investing Services: investment education, portfolio allocation services and trading execution for employees -Reimbursement: for meals and travel beyond normal business hours
 * In addition -**

__Crystal:__ (Extrinsic rewards - positively valued work outcomes that are given to an individual or group by some other person or source in the work setting) Examples of extrinsic motivators which are compensation based are motivators such raises, bonuses, extra vacation time, flex time, gift cards, luncheons or other gifts. These types of rewards typically have a price associated with them, unlike the intrinsic rewards which are more effort based from the employer perspective. Extrinsic rewards at Goldman Sachs: - Business Book of the Year Award: The Award recognizes one business book that provides “the most compelling and enjoyable insight into modern business issues, including management, finance and economics.” The winning author receives £30,000, and each of the shortlisted authors receives a £10,000 prize. __[]__ (Intrinsic rewards - positively valued work outcomes that the individual receives directly as a result of task performance) - gain broad exposure to all of the firm’s businesses. - work in a diverse and stimulating environment alongside people from different backgrounds, experiences and cultures. - New York headquarters provides ample opportunity for you to grow your career in many directions. - have access to career mobility within your division or in another division. - in some smaller, regional offices, can take on more responsibility early on and become an expert in your field. - In the US, Goldman Sachs offer career opportunities to undergraduate, graduate and experienced candidates across all Goldman Sachs divisions. __[]__ __[]__ - Goldman’s managers could use nonfinancial incentives to energize their staff (articles - [|____http://nonprofitpeople.monster.com/training/articles/344-motivating-without-money?print=true____]) positive reinforcement, more responsibility, higher levels of autonomy, variety of work schedule. Any kind of innovative approach to the job which makes the job more interesting and/or exciting is likely related to an intrinsic reward.
 * Intrinsic & Extrinsic -**
 * Extrinsic:**
 * Intrinsic:**

(system that rewards people for acquiring and developing job-relevant skills in number and variety relevant to the organization's needs) -They only hire excellent people/student, who can prove their ability and make a compelling presentation of why the company would benefit from their presence http://talk.collegeconfidential.com/college-search-selection/273550-most-prestigious-seen-goldman-sachs.html - The salaries range are from $60,000 to $150,000, it depends on the position. The harder the work, the more pay they will get. For example, the average salary for intermediate associate is $131,302 while the analyst or developer is $84,366. overviews, salaries, reviews ([|____http://www.glassdoor.com/Salary/Goldman-Sachs-Salaries-E2800.htm____])
 * Pay for Skills**

__Peter:__ Compensation is determined by a number of factors, including: -The firm’s performance -The performance of individual divisions and business areas -Each employee’s performance in the context of her or his role -External and internal compensation benchmarks -The firm's retention and incentive goals for individual employees -**Performance Appraisal methods** -Ranking -graphic rating scales -critical incident diaries -behaviorally anchored rating scales -**Who does the performance appraisal?** -Self and peer evaluations -group evaluations -360 degree evaluation all of the above to improve employees performance in each certain ways
 * Performance Appraisal** (process of systematically evaluating performance and providing feedback on which performance adjustments need to be made) **-**
 * -Steps for improving performance appraisals**

-Also things they do not have and can work on for better performance appraisals

Three-year retention rate: **57.8%** Five-year retention rate: **38.6%** Merit raises are determined by: **NA** Date at which most entry-level hires are eligible for their first merit raise:**One-year anniversary** Promotions are determined by: **Both** Date at which most entry-level hires are eligible for their first promotion:**One-year anniversary** Frequency with which entry-level hires are formally evaluated: **Annually** Three most important performance measures for entry-level hires: **1-Analytical skills** **2-Team Player** **3-Enthusiasm**

Does the average vary depending on business unit or department? **Yes** Does the organization periodically monitor employee e-mail? **Yes** Does the organization periodically monitor employee Web usage? **Yes**

__Jedd:__ - Less stressful work environment - Different types of incentives other than cash bonuses for meeting company and individual goals
 * What the Company Should Improve on:**
 * -** Things they need and what they don’t have for rewards/performance management