News Analysis: MBA Students Give New Policy Poor Marks

Administrators at Harvard Business School (HBS) chose yesterday to remove the veil over student transcripts, despite widespread opposition to the move among the school’s student body.

In the three weeks since Richard S. Ruback, chair of the Masters of Business Administration (MBA) Program, said he might do away with the non-disclosure policy, a heated debate has erupted on the HBS campus, with students arguing that the switch could rupture an atmosphere of goodwill at the school, where they have been prohibited from revealing their grades to potential employers since 1998.

A letter to the HBS administration, signed by 19 of the school’s 20 Student Association representatives, said the switch to optional grade disclosure “would have a significant negative impact on the learning environment and overall student experience at HBS.”

Others have said that, without evidence the current system is failing to motivate students, HBS should be wary of fixing a system that is not broken.

“I’m deeply concerned that the administration is trying to rush the new policy through,” Shawn P. O’Connor, a joint-degree student at HBS and Harvard Law School, said before yesterday’s announcement. “To get into HBS, you have to be incredibly driven. That is not the sort of drive that people give up once they come here.”

The vast majority of the HBS student body appears to agree, even though the change will only affect future classes. In an unofficial poll conducted by the school’s student newspaper, The Harbus, 95 percent of 272 respondents said they opposed disclosure of their grades.

But HBS faculty and administrators—as well as recruiters hoping to employ HBS students—generally supported the change in interviews over the past three weeks. And that support ultimately won the day.

“The faculty think it’s a reasonable proposal,” Ruback said. “The question in my mind is why students are so bothered about it.”

Most firms in the investment banking and consulting industries that have historically employed HBS students were reluctant to discuss the proposed change, perhaps for fear of ruffling feathers among the school’s administration. But those who did speak said that, while communication skills, a capacity to work in a team, leadership ability, and a range of other factors figure prominently in their hiring decisions, they would welcome the opportunity to see students’ grades as well.

As Google spokeswoman Megan Quinn wrote in an e-mail: “From Google’s perspective, it is important to get a good education, and to that end, academic achievement is an important factor we look at for candidates of all job positions.”

THE RIGHT INCENTIVES

The school’s current grading system allocates a Category I grade to the top 15 to 25 percent of students in a class, and the bottom 10 percent usually receive a Category III grade. The remaining middle 65 to 75 percent are given a Category II grade.

“What will be disclosed is that the vast majority of our students get a Category II,” Shad Professor of Business Ethics Joseph L. Badaracco, Jr., said in advance of the decision. “That’s not news. It’s like disclosing that everyone in the class is between five feet tall and seven feet tall.”

Many students and faculty agree that the grading system at HBS might not provide students with the right incentives to make academics a top priority.

“People think that they won’t be in the top fraction of the class and that they won’t fail out,” said Akram Zaman, co-president of the HBS Student Association’s Executive Committee, “so many of them take on the attitude that they don’t need to work as hard.”

Harvard is the only business school that actively enforced a non-disclosure policy. The administrations at three of HBS’s top peer institutions—Stanford’s Graduate School of Business, the University of Chicago’s Graduate School of Business, the University of Pennsylvania’s Wharton School—let their students decide whether they want to disclose their grades to recruiters.

“Here, it’s basically like cheating,” said Zaman, who did not take an official position on the change. “To tell your employers your grades is a violation of community standards. At other schools, it’s more of a norm than an enforced policy.”

In an interview before yesterday’s announcement, Ruback said that there was “nothing special on the timing” of the policy review, placing it among a broad series of reforms that HBS has undertaken in the past few years.

“We’ve been doing things that we hope will improve the classroom environment and the academic experience, and this is just one in that number,” he said. “It’s what came on the agenda.”

As a result of those reforms, HBS students now are typically not permitted to use their laptops in class, professors are cold-calling more often, and sharing of academic work has become more closely regulated than before.

But this isn’t the first time that HBS has undertaken a wide educational reform program, according to Badaracco.

“In the mid-1990s, HBS had a large-scale review of the MBA program that we called ‘Leadership and Learning,’” said Badaracco. “This led to a lot of different experiments in the program, of which non-disclosure was one.”

Before the current policy was implemented in 1998, students were allowed to report their grades to potential employers. The switch to grade non-disclosure came out of a debate that began in 1996 over the perceived unfairness of a “two-cohort policy,” according to Ruback.

From the mid-1990s until early 2001, each Harvard MBA class was divided into two parts. One cohort began its first academic year in September and finished in late April; the other cohort began in January and lasted through mid-August.

“The January cohort and the September cohort believed that they were not very comparable,” Ruback said, “and there was some truth to that. The students were not comparable, and the courses were different.”

And unlike their peers in the January cohort, the students of the September cohort were able to hold summer jobs that provided valuable work experience and connections.

The use of different educational tracks frustrated some HBS students, who felt that the two cohorts did not stand on equal ground in the employment market, according to Ruback.

“There was a lot of anger around when they were competing for jobs after the second year,” he said. “The students in each group thought the other group’s grades were not comparable.”

The administration decided that the best way to address the students’ concerns was to institute the non-disclosure policy.

“The view was that, since we were doing this experimental cohort, we would stop grade disclosure,” he said. “It was not this deep philosophical thing about cooperation.”

But Badaracco, who was also at HBS when the change occurred, said that “part of the ‘Leadership and Learning’ experiments was to encourage more teamwork among the students.”

“We also had a concern that there was some inappropriate behavior, locker-room-type behavior, that was resulting in a great amount of pressure on students,” Badaracco said. “The theory was that...we could reduce that pressure by not disclosing grades.”

FALLING INTO LINE

The new grade-disclosure policy at HBS announced yesterday closely resembles the policy in place at the Stanford Graduate School of Business. David M. Kreps, Stanford’s senior associate dean for academic affairs, called his school’s disclosure practice a “policy of neutrality.”

“The Stanford policy is that students own their own transcripts, and a student who wants to give a transcript to a recruiter can do just that,” he said.

The Stanford administration formulated its current policy based on the Family Educational Rights and Privacy Act, a 1974 law that protects the privacy of student education records.

“Our interpretation of the law is that we do not have the power to tell students that they cannot reveal their grades,” he says. “I don’t think we have any particular degrees of freedom on this.”

Ruback, Harvard’s MBA Program director, disagreed with that interpretation of the law.

“Students have the right to review their records,” he said. “The question here is whether students have the right to distribute grades.”

Although Stanford’s administration does not take a particular position encouraging or discouraging students to disclose their grades, Stanford business students have generally chosen to keep their grades out of the hands of potential employers, according to Kreps.

“Students have a norm that they do not disclose their grades to recruiters,” he said. “The administration has been encouraging students to think about the impact [of revealing their grades] on themselves and on their peers in the programs. At the same time, we recognize that it’s their decision, not ours.”

The practice is the same at Chicago, with no official policy dictated by the school, according to Allan Friedman, a spokesman for the university.

“It is basically a gentleman’s agreement,” April C. Park, the Graduate Business Council president at Chicago, said in an interview.

The same is more or less true at the University of Pennsylvania’s business school. “There is really no policy at Wharton right now,” Edward I. George, chair of Wharton’s MBA Executive Committee, said in an interview. “What’s in place is a system of more or less voluntary grade non-disclosure.”

“We don’t want to create a culture of non-accountability,” he added.

HBS spokesman James E. Aisner ’68 signaled yesterday that the HBS administration would not favor a student-enforced norm that discourages students from disclosing their grades.

“[T]he School believes that grade disclosure is a decision that each student should make INDIVIDUALLY, not as a group,” he wrote in an e-mail.

Firms that recruit from elite business schools, for their part, would rather see applicants’ transcripts.

Kermit O. King, vice president of North American recruiting for Boston Consulting Group (BCG), said grades are “one more data point to help assess a candidate.”

“On the margin, it might allow us to be a little bit more calibrated in finding people who would excel and thrive at BCG,” said King. But he added, “We are comfortable making decisions on people in the absence of grades.”

After yesterday’s decision, he may not have to.

—Rebecca M. Anders contributed to the reporting of this article.
—Staff writer Alexander H. Greeley can be reached at agreeley@fas.harvard.edu.
—Staff writer Daniel J. T. Schuker can be reached at dschuker@fas.harvard.edu.