GM Implements New Employee Performance Ratings System
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High-performing employees of The General will now get significantly bigger bonuses, while underperformers will be pressured to up their game or quit, under a new performance rating system GM just implemented.
“A more intentional process is required that sets clear expectations for performance and holds people accountable” is how the new system’s goal is described in a GM company memo seen by Reuters, which reported on the details of the change.
The new system will divide GM workers into five categories, ranging from those who “significantly exceed” the automaker’s benchmarks for worker achievement to those who do not meet those goals. A 150-percent bonus will be paid to those in the top five percent, upping previous incentives. Those in the middle will get 100 percent of available bonuses, with The General estimating 70 percent of workers fall into this segment.
Meanwhile, those on the lowest rung of the five ratings will be subject to “appropriate action” such as “being exited from the company,” that is, fired. About 15 percent are expected to be low performers, though this includes the fourth category as well as the fifth and lowest.
Some GM employees say that the system will result in internal competition and all of the potentially associated problems. The distribution of workers and their bonus levels is expected to roughly present a bell curve:
- 5 percent, top performers receiving 150 percent of bonuses
- 10 percent, high performers receiving 125 percent of bonuses
- 70 percent, middle-of-the-road employees, receiving 100 percent of bonuses
- 10 percent, low performers, receiving 50 percent of normal bonuses
- 5 percent, worst performers, receiving no bonuses and potentially fired
The outgoing system ranked GM employees into three categories rather than five. The new ranking scheme enables more granularity in assessment while offering both larger bonuses for success and considerably smaller ones for failure.
A GM representative told Reuters that the automaker is “proud to have a culture where we foster and reward high performance.” The new system aims to attract highly skilled workers who will help The General make the transition to the extremely competitive and financially risky EV market, as it continues towards its goal of 100-percent electrification.
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Just a way to get rid of older employees.
Like Mary. She needs to score a negative 1,000.
Old employees are not the issue. Underperforming employees are the ones being incentivized to perform better. Maybe some old employees are complacent and underperform. Those don’t have to be synonymous though.
A lot of the evaluation process is very subjective and the raters usually see them as a nuisance. If the boss likes you, you’ll get a good eval; if not- or the employee is too expensive- you’ll get a bad eval.
And no shortage of nepotism at GM.
I use to set goals for employees. When done in a measurable fashion, it’s a great way to get the company what it needs and helps the employee know what is expected to help them get ahead.
Are you saying older employees are the bottom 5% of the workforce?? SMH
On the contrary: I feel older employees are an asset to the company with their knowledge and know how. Unfortunately many employers only see them as an overpriced expense that can be replaced by younger, cheaper employees.
Hmm. Performance based pay? What an interesting concept. Reward those that do good work, no matter their race or ethnicity. If only the rest of the corporate world would do that…
The older employees are the one’s doing the work!
This system has been around in other firms for a long time.
It’s good GM is stepping up the game to eliminate mediocracy.
Why did GM Authority stop the comments on the UAW supporting Harris article. They also deleted when I asked this question on another article? Aren’t forums supposed to be about free speech, as long as no one is being threatened with violence? You need to let us speak, you will get more traffic on this site if you did. If you don’t want political debate on this site, then don’t post political articles.
There were some pretty violent comments. Seems like it was locked/ cleaned up for good reason. Y’all gotta behave.
A lot of the evaluation process is very subjective and the raters usually see them as a nuisance. If the boss likes you, you’ll get a good eval; if not- or the employee is too expensive- you’ll get a bad eval.
Covering for Kammy.
Great observation. MSM does the same exact thing trying to cover for their favorite Democrat, and Kammy.
What does ”Kammy” have to do with this GM evaluation program?
Who is doing the evaluation? I have seen plenty of discrimination in evaluating. Never worked for UAW, am I white male. I worked my butt off, – but was -never – a suckup. Got passed by my whole career.
How does this effect “TEAMS “ and DEI ?
“The General make the transition to the extremely competitive and financially risky EV market” Read we need to cut headcount and save money. EV’s and stock buybacks are expensive.
Every company has deadwood. Too many years these low productive workers flew under the radar and were protected by the union.
It’s good to see a change coming, hopefully other companies will follow GMs lead.
There are no evaluations of union employees.
So they are back to the era of Forced Ranking where every year 5 percent will be fired, True an organization could have deadwood, but by 3 – 5 years in you’ve removed the deadwood and now you are tossing those who are performing. It will also depend of if they actually make good goals, and rate on the goals. Corporations usually have the raises figured out well before the performance reviews are completed, and the make the review match the predetermined ranking.
Ford got their butt in a sling because if this system.
As a salesman for 40 years, we always worked under this kind of system – performance oriented. As long as opportunities to perform/over perform, and the playing field is level ( no favoritism for any reason, or politics ), it can work. It will increase animosity among workers if any suspensions arise. It should work both way, by allowing the workers to evaluate and know the performance criteria of their bosses. Two way streets are better than one way, and get’s “buy in” for the process. Communication is always key, and the more often the better.
Just my two cents !
BUT there will probably be a sizable bonus for Mary ,,she is the first one to get a reduction or NO bonus.
Internationally or US only ?
Why are they showing workers on the line when they should be showing people sitting in an office, or making copies … sharpening pencils?
When you are a salaried employee working under a manager and director which are in the lower 15% of performance, you are doomed, but you will never know it because that information never flows down and all managers and directors act like they are top 5%. When a group in engineering has a technically competent manager that can manage people and projects, the whole group tends to perform above average. These types of performance evaluations for large organizations suck.
@Homer
If your whole group is performing above average then it just means the lowest performing of the high performers gets smashed with a huge bonus penalty. That’s how a forced distribution works. Good employees will get railroaded to the bottom because they are on a “high performing team.”
Yes this is true. This is challenge for a good manager to overcome.
I have worked for five major corporations, Hughes, Newhouse Communications, EDS, HP, and GM. EDS was by far the best run, the most productive, and provided the best service of them all. This is how they rewarded their best employees. This raised the level of the whole team and thus the corporation. There are many other things that GM could learn from EDS and Ross Perot if they would only open their minds.