Published 20:30 IST, August 2nd 2024
GM rebuilds employee ratings system to boost performance of US employees
General Motors is implementing a new performance ratings system for its US salaried employees, aiming to enhance rewards for top performers.

GM employees ratings: General Motors (GM) is implementing a new performance ratings system for its US salaried employees, aiming to enhance rewards for top performers while it will increase pressure on lower performers. The move for new employee ratings reflects GM's strategy to attract and retain talent amid the competitive transition to electric vehicles.
According to Reuters citing internal notice, GM will now award the top 5 per cent of employees with bonuses of 150 per cent of their target, a significant increase from the previous system. This change is part of GM’s effort to better align compensation with performance and meet its ambitious goals in the rapidly evolving automotive industry.
The updated system introduces a five-tier performance evaluation, ranging from "significantly exceeds expectations" to "does not meet expectations." Bonuses will be directly linked to these rankings, with the majority of employees expected to fall into the "achieves expectations" category, receiving 100 per cent of their target bonuses. Conversely, those rated as "does not meet expectations" may face "appropriate action," including potential termination.
“GM is dedicated to cultivating a culture of high performance, which is crucial for attracting and retaining top talent in this competitive environment,” said a GM spokesperson. The new rating system will be applied during the year-end performance reviews for GM's approximately 53,000 salaried employees in the US
Ford, another major automaker, has also been revising its performance evaluation practices, with CEO Jim Farley highlighting the importance of aligning bonuses with shareholder value in the company’s business transformation. Similar to GM, Ford has adjusted its performance review system to better reflect individual contributions.
Kristine Bhalla, a partner at ClearBridge Compensation Group, noted that the new five-point scale allows for a more detailed assessment of employee performance compared to the previous three-category system. She suggested that while such changes might involve incremental costs, they generally enable more targeted spending on employee remuneration.
As the auto industry continues to navigate the costly transition to electric vehicles, major manufacturers, including GM, have been reducing their white-collar workforce. GM's recent cost-cutting measures included offering buyouts and reducing contract staff.
(with Reuters inputs)
Updated 20:30 IST, August 2nd 2024