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Goldman Partnership Shuffle Puts Spotlight on Politics, Pay and Team Building

He who giveth can quickly taketh away. As many as 60 partners at Goldman Sachs may suffer the grammar school equivalent of having their stars removed when the firm strips them of their partnership.

In sharp contrast, about 100 execs will be named partners in a secretive rite of passage designed to usher in fresh talent.

Such is the culture at the firm, where the winners and losers in the partnership shuffle will soon be as identifiable as Democrats and Republicans. Critics believe that this creates a hostile environment, with employees pitted against one another to the detriment of the whole.

City of London fund manager Barry Olliff believes that matters of salary ought to leave little in the way of suspense. Any competition, he says, should be with rival banks, not fellow employees.

It's quite different than what appears to be the prevailing culture at Goldman. One can only going from partner to rank and file - both in the face of colleagues, and in the wallet.

Silicon Valley venture capitalist Ben Horowitz believes that CEO's, in endorsing this system, pave the way for internal politics. He says that when an employee asks for a pay raise, essentially he's asking for more attention from the boss.

Regardless, Silicon Valley and Wall Street are vastly different. Most Silicon Valley companies are tech start-ups, with to varying degrees, each employee enjoying ownership in the company and a financial incentive to see it succeed. Wall Street is all about winning and losing, and not everyone can be a rainmaker.

That said, comparing the two isn't cut and dry when it comes to fostering a team-building environment. Competition is an inherent part of Wall Street. Competition for the corner office. The big raise. The M&A deal.

As a result, it comes as no surprise that Goldman shuffles its partnership the way it does. Up one day, down the next. It goes for markets, and people too. Even if it comes at the cost of building a great team.

AUTHORScott Krady Insider Comment
  • Ji
    17 September 2010

    Yeah, those poor ex-partners. deserve what they get.

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