Do grades help or hinder?

Do grades help or hinder?

By: Raphael Minder

Now jobs are scarce, business school students find themselves with anew balancing act to master: how to improve their recruitment prospects while making sure the tougher competition does not lead to a less pleasant learning environment.

One question that has come to the forefront is whether grades should matter. On Monday Columbia Business School gets the results of its referendum on a proposal to forbid students from disclosing their grades to recruiters. Many schools, including Harvard have effected the nondisclosure policy since Wharton initiated this trend in 1992. Most recently, the student body at Chicago ratified a similar policy.

While most companies say they do not rely on grades to assess MBA candidates, some employers do value grades as an indicator of future performance.

"With most recruiters grade disclosure is a non-issue but some of our top recruiters, primarily the top-tier investment banks and consulting firms, remain very interested in having grades as a metric to judge candidates," says Regina Resnick, assistant dean and director of Columbia's MBA career services. "In this job market, they want to feel confident that they are hiring people who have the demonstrated skill set and can hit the ground running."

Ms Resnick says one recruiter has warned that it may switch to other schools if Columbia stops disclosing grades. Such a threat strikes a particular chord at Columbia because the New York school has established strong ties with the financial services community, building on its proximity to Wall Street.

Banks are reluctant to discuss their hiring policy. One banker says it would be hard to draw an overall conclusion about the importance of grades since "what we are looking for when it comes to investment banking is, for example, not identical to what applies in sales".

The proposal for non-disclosure - the first such referendum at Columbia Business School - faces an uphill struggle because it requires the backing of 70 per cent of students to come into force. Columbia's administration has stayed on the sidelines of the disclosure debate - since the issue is in the hands of the students - but has indicated that it would prefer to maintain the status quo, not least because of concerns about how a non-disclosure policy could be monitored and enforced.

At Wharton, which has had non-disclosure since 1992, "the faculty does not like this [policy] at all because it feels that it degrades the value of the Wharton education", says Laura Bennett, head of Wharton's career advisory body. "To some [professors], it is almost disrespectful to have to teach people who do not care about their grades."

Grade disclosure can be seen as part of a broader debate among students about how far competition should be fostered at business school; and among faculty about whether grades are a valuable component of a business school education.

"Rather than talking about disclosure, I think that we should stop giving grades because students at business school should be treated like adults and it is stupid to try to beat them into performing," says Bruce Greenwald, a professor at Columbia.

"There is no evidence that your grades at business school say much about your prospects in your future business career. The real grade students will get is their performance five years from now," he adds.

David Beim, a professor who was formerly head of investment banking at Bankers Trust, disagrees: "I think grades are hugely important because they provide useful feedback and they help students decide whether a subject is something they should pursue in their future career."

Having interviewed many MBA students during his banking days, Prof Beim says that he attached most importance to the candidates' references but found grades did provide "a useful screener".

Schools that have decided not to reveal grades claim that this policy has not hampered job-hunting. "I have not heard that anyone has lost an opportunity or a job due to the inability to disclose grades," says Robert Zielinski, who heads the student body at Chicago Graduate School of Business.

However, companies often send employees who are alumni back to their former campus to recruit. "Many alumni want to be able to ask grades as another measure of determining if candidates, most importantly career switchers, have demonstrated certain competencies," says Ms Resnick.

"It makes them more comfortable in fighting for the candidacy of someone who may not have had prior industry experience."

Ola Al Dajani, a Columbia student who interviewed with five investment banks, says that she was asked about her grades in accounting and corporate finance at the start of all her interviews and felt that "grades preconditioned the rest of the interview". She backs the policy of non-disclosure because she says grades should not be prominent in interviewing and also believes the focus on grades "affects the classroom experience".

Indeed, the most common argument among those who want to bar disclosure is that it would make for a less cut-throat atmosphere at a time when students are already stressed by the gloomy job outlook. Some also argue that, were it not for worries about grades, students would choose more challenging classes rather than those in which they are likely to score highest.