Motor giant Ford has dropped the practice of ‘managing out’ the lowest
performing 10 per cent of staff because of the negative reaction from
employees.
The company used the 10/80/10 approach to performance management championed
by organisations such as US energy company GE, but found it did not fit with
the Ford culture.
"Boy, did it get a bad reaction," John Walker, vice-president of
HR for Ford Europe, told delegates at the Winning the Global Talent War
Conference. "It turned a lot of staff against the company just by the
manner in which it was done."
Ford even had to face legal action in the form of ‘class action’ lawsuits
taken in the US as a result of the policy. "We’ve moved away from that
now," Walker said. "If you put in a performance management approach,
make sure it fits the company culture."
The company now uses a wide range of measures to evaluate performance and
boost employee engagement in the business.
Performance development committees assess the leadership potential of
employees, for example. These include line managers and an HR professional.
It uses business score cards and all staff are assessed against performance
metrics.
Walker said changing social values had led the company to drop its
authoritarian approach to leadership and to introduce new methods, such as
coaching.
All its HR professionals will have gone through coaching training by the end
of the year, delegates heard at the Pearn Kandola conference, held in
association with Personnel Today.
As part of its European transformation strategy, Ford has increased
productivity in its plants from 63 per cent two years ago, to 98 per cent now.
By Noel O’Reilly
