Ford offers poor performers an easy way out | Rare Techy
Ford Motor Co. has introduced a new approach to dealing with low-wage workers, an unconventional strategy that has attracted the interest of HR professionals but may prove impractical for some employers.
The Wall Street Journal announced that the automaker has instituted a new policy for employees classified as poor performers — giving them the option of accepting severance pay or a traditional performance improvement plan (PEP).
Ford employs approximately 30,000 salaried workers in the United States. Previously, U.S. salaried Ford workers who were classified as inferior workers were not allowed to take severance pay. Rather, they were placed in Ford’s PEP, and if they failed to meet expectations, they were terminated.
Management consultant Liz Weber said she had never seen an approach to performance management like Ford’s new policy. He called it an impressive and “very gracious” move that shows Ford is supporting its white-collar underdogs.
“They’re really trying to help employees who don’t meet performance standards. That tells me they’re working hard to keep those people, they’re trying to do right by those people,” Weber said.
But some employers may not be able (or may not want to) “do it right” by replicating Ford’s performance management shift. For example, they may lack the vast resources available to Ford, which is expected to top $136 billion in 2021 revenue, which allows the automaker to invest so much in nurturing underperformers and generous severance packages.
Ford representatives could not be reached for comment. But company spokeswoman Marisa Bradley said
Detroit News that the updated policy is not intended to be attrition or to reduce costs. Rather, the change was made to “reflect market practices and internal feedback,” he said.
Benjamin Loring, an HR expert at consulting giant Gartner, said Ford’s new policy aligns with a “rethinking” of performance management over the past 15 to 20 years. Many employers are moving beyond the traditional check-the-box exercise that many employees have gone through as part of performance improvement efforts, he said. Instead, reimagined performance management measures give employees more input into setting work goals and add more ways to motivate poor performers to work harder.
Loring said Ford’s treatment of targeting specific underperforming employees stands in stark contrast to widespread layoffs at social media platform Twitter under new owner Elon Musk.
“Twitter is a case in point of bad performance management. I would say if you want your people to work, you wouldn’t do what’s happening at Twitter right now,” Loring said. “It’s not the kind of environment where creative and innovative work is done or where problems are solved.”
Lindsay Mastrogiovanni, HR coach at Paychex, a payroll, HR and benefits company, said workplace leaders like Musk could benefit from examining their own behavior when it comes to supervising underperforming employees.
“Give employees the opportunity to ask follow-up questions so they can better understand the expectations and the results they’re expected to produce,” Mastrogiovanni said. “Monitor your reaction to these conversations—negative responses can discourage employees from seeking help or asking questions.”
In addition, he said, managers should rely on the input of underperforming employees to create an action plan with clear management goals to help them do their jobs better. This should be accompanied by constant constructive feedback, Mastrogiovanni said.
“Waiting for an annual or semi-annual review may not be quick enough to deal with a poorly performing employee,” he said. “By scheduling regular meetings, management can provide positive feedback to employees and eliminate any deficiencies by focusing on actionable solutions or behavior changes.”
Monte Deere, CEO of shoemaker Kizik, said his company’s managers hold regular private meetings with employees to help improve performance.
“This kind of routine privacy takes away any perception that an employee is being treated unfairly. There are no moments where one person is called into the principal’s office in front of the entire class,” Deere said. “Having an element of privacy brings a level of trust that is necessary to deal with something as sensitive as talking about employee performance. How else can you instill confidence in that team member without that trust?”
Longtime CEO Kathleen Mennillo, interim CEO of the Michigan Audubon Society, warned employers against a “one size fits all” approach to performance management. Such an approach, he said, does not take into account the many causes of poor performance.
To be sure, an employer should establish a structured management program that includes elements such as write-ups and performance improvement plans (PIPs), Mennillo said. But performance management should go beyond those parts to include things like daily check-ins, “water cooler conversations” and genuine inquiries about interests outside the workplace, he said.
“Leaders are critical,” Mennillo said. “Being a leader comes with the responsibility of bringing out the best in others. The easiest way to do that is to truly connect with employees.”
Rhett Stubbendeck, CEO of the insurance company LeverageRx, said that as a manager, he works with the underdog to help them reach their “maximum potential.” To do this, he encourages employees who have increased their performance with rewards, such as an extra paid day off. Stubbendeck also encourages underperformers who could benefit from more expertise to attend training seminars offered by LeverageRx.
“Sometimes I also give them a mentor from whom they can learn and improve their work skills,” he said. “However, if an employee with low performance does not improve, I consider him a burden and a threat to the organization.”
John Egan is a freelance writer living in Austin, Texas.