General Motors (GM) has implemented a new employee performance rating system, offering significant bonuses for top performers. The revamped system aims to attract and retain talent critical for the automaker’s electric vehicle (EV) production goals.
“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,” stated a GM memo.
The new rating system transitions from three rankings to five, ranging from “does not meet expectations” to “significantly exceeds expectations.” Employees in the top 5% will receive a 150% bonus, while those in the middle tier will get 100% of their target bonus. GM plans to reward top performances significantly, while employees who fall at the bottom of the rankings risk termination, with the company stating that appropriate actions would be taken, including “being exited from the company.”
GM expects that 70% of its 53,000 salaried employees in the United States will fall in the middle category, and it predicts that 5% will rank at the bottom.
Legacy automakers like GM and Ford Motor have been enhancing their evaluation systems to compete with EV-focused companies such as Tesla and Rivian, which often include stock options in their pay packages. Ford Motor CEO Jim Farley highlighted this shift during an earnings call, saying, “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.”
