A policy intended to encourage more intellectual risk-taking among M.B.A. students has been widely adopted at the nation’s top-ranked business schools, but it has also led to a decline in study habits, according to a new working paper released by the National Bureau of Economic Research.
Grade-nondisclosure policies, as they are known, allow students to withhold their grades from future employers. Supporters say the policy offers an incentive to students to take more challenging courses and work cooperatively with one another because they know their grades will not appear on their transcripts.
But that dynamic has not always occurred, according to the paper, “Grade Non-Disclosure,” by Daniel Gottlieb and Kent Smetters, an assistant professor and professor, respectively, at the University of Pennsylvania’s Wharton School.
“In practice, self-reported levels of learning effort have fallen significantly since the introduction of grade nondisclosure,” Mr. Gottlieb and Mr. Smetters write. They note that at Wharton, for example, students reported having spent 22 percent less time on academics in the four years after a grade nondisclosure policy was put in place.
Under grade-nondisclosure policies, students may receive grades, but they won’t be disclosed to recruiters. Or they may not receive grades beyond pass or fail, or their work may simply be labeled under one of four broad categories, such as distinction, proficient, pass, and fail.
Based on the premise that grades are the property of the student, several schools have allowed the student body to vote to establish a “social norm” about disclosing or withholding grades from future employers. While individual students have the option to share their grades, most choose not to, the authors write.
It is unclear, say Mr. Gottlieb and Mr. Smetters, why students at the most elite business schools would disproportionately elect to adopt such policies. Seven of the 10 top-ranked business schools, and 10 of the top 25, have put such policies in place. No school that places between 20th and 50th has one. (The authors used rankings by U.S. News & World Report, sorted by average score on the Graduate Management Admission Test.)
But, the authors also note, schools have other ways of signaling to the outside world the performance of individual students. Awards and honors go to the top students. And policies that allow business schools to identify students who don’t meet minimum standards ensure that the lowest-performing can be dismissed.
Other steps might be taken to lessen student support for grade-nondisclosure policies, the authors say. An external body could certify graduates, in a process similar to those for law, medicine, or accountancy. Business schools could also establish more stringent thresholds for minimum grades.
The paper is available for purchase (or free to subscribers) on the Web site of the National Bureau of Economic Research.
