General Motors (GM) launched a new employee performance rating system that includes 150% bonuses for the top 5% of workers.
The new system is expected to attract and retain the proper talent for the automaker. GM’s talent is expected to help the company produce electric vehicles (EVs).
A GM memo stated, “To ensure GM has the talent needed to achieve our ambitious goals, a more intentional process is required that sets clear expectations for performance and holds people accountable.”
GM’s new performance rating system changed from three rankings to five rankings. Employees are ranked from “does not meet expectations” to “significantly exceeds expectations.” The legacy automaker rewards top performances with a 150% bonus. Workers who rank in the middle will receive 100% of their target bonus.
General Motors employees who rank at the bottom will be at risk of termination. The company stated that appropriate action would be taken, including “being exited from the company.”
GM expects 70% of its 53,000 salaried employees in the United States to rank in the middle. It predicts that 5% of its salaried workers will rank at the bottom.
According to Reuters, legacy automakers like GM and Ford have been improving their evaluation systems for workers in the United States to compete with new EV-focused automakers like Tesla and Rivian. The latest generation of automakers offer pay packages to employees that include stocks from the company.
“We’ve learned that the right talent is not sufficient. Over the last two years, it’s been imperative that we go to a right performance management system. It’s a fundamental change in the way we’re running the company,” said Ford CEO Jim Farley during an earnings call.
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