General Motors (GM) has unveiled a revamped employee performance rating system designed to reward the company’s highest performers and attract top talent. This initiative aims to bolster GM’s efforts in the electric vehicle (EV) market by ensuring that the company retains a workforce capable of meeting its ambitious goals. The new system modifies the former three-tier ranking structure into a five-tier one, emphasizing clear performance expectations and accountability.
In the revised performance evaluation framework, employees are categorized from “does not meet expectations” to “significantly exceeds expectations.” Those who fall into the top 5% will receive a 150% bonus, while the majority, expected to be about 70%, will get their standard target bonus of 100%. GM has indicated that employees who rank at the bottom may face termination, a move aimed at maintaining high performance standards.
Structured Performance Ratings
The significant changes in GM’s rating system reflect a broader trend among legacy automakers to compete with newer EV-focused companies like Tesla and Rivian. These companies often attract talent by offering competitive pay packages that include stock options. GM’s approach aims to keep pace with these incentives by rewarding high performance while ensuring underperforming employees are held accountable.
Impact on Workforce
According to a memo from GM, the updated performance management system is a strategic move to ensure that the automaker has the necessary talent to achieve its EV and software goals. The company predicts that the majority of its 53,000 U.S.-based salaried employees will rank in the middle, with a small percentage at the top and bottom extremes.
Other automakers, such as Ford, have also made similar adjustments to their performance evaluation systems. Ford CEO Jim Farley has highlighted the importance of having a robust performance management system over the past two years to drive fundamental changes in company operations. Both companies recognize the critical role of talented and accountable employees in their transition toward electric mobility.
GM’s new performance rating system aims to align employee incentives with the company’s broader strategic goals. This change comes as part of a wider industry trend where traditional automakers are restructuring to better compete with startups that specialize in EVs. By focusing on clear performance expectations and significant bonuses, GM seeks to attract top-tier talent while optimizing its internal resources to remain competitive in the evolving automotive market.
