DETROIT -- A new Ford Motor Co. evaluation policy could leave some of its top 20,000 executives in a sort of cold sweat they haven't experienced since college.
Ford is instituting a global performance-review system for next year that's similar to the college practice of grading on the curve: Ten percent of the executives will get A's, 80 percent will get B's and 10 percent will get C's.
Those getting C's will see their raises, bonuses and stock options go to the folks who get the A's and B's. And if someone gets a C two years in a row, he or she may be demoted or fired, according to an internal company memo.
Ford says the program does not represent a work-force reduction or a trim in bonuses, but a way to improve performance and communication between managers and employees.
The program will apply to the top 20 percent of Ford's 100,000 salaried global employees. That means 20,000 executives; of those, 2,000 will be given C's.
Ford spokesman Ed Miller said there is some flexibility in the A-B-C percentages within small departments. And the whole formula will be revisited at the end of next year.
"But the object is to improve performance. If you were in the bottom percent for a period of time, that would not be good."
This is not the first fire Ford President Jac Nasser has built under his executives in an effort to focus the company on pleasing shareholders and customers.
The first wisp of smoke came in March 1998, when the company changed its executive bonus policy for the first time in 40 years.
Bonuses always had been tied loosely to company financial performance. But a new policy added other standards to the list for about 5,000 executives eligible for bonuses. Among the new yardsticks were corporate improvements in customer loyalty, warranty performance and speed in filling orders.
In July 1998, Ford began making buyout offers to U.S. salaried employees designated by their bosses as "low performers" or "average/solid performers with limited potential."
Miller said offers went to fewer than 2,000 employees, and fewer than 1,000 accepted the voluntary buyouts.
The July 1998 program met with mixed internal reaction. A few employees, displaying wry humor, reportedly pinned signs reading "low performer" or "make me an offer" on their backs.
Others viewed the program as a way to sweep out senior white male employees. (About 16 percent of Ford's salaried U.S. employees are racial minorities and about 26.5 percent are women.)
Employee suspicions about hidden agendas were reinforced, rightly or wrongly, when Group Vice President Richard Parry-Jones said in an electronic Ford newsletter in August 1999, "We are trapped in a monocultural environment that is dominated by old white males. We need to change. We need more employees who are more reflective of our consumer base."
Miller rejects the notion of hidden agendas.
"This program is designed to improve the interaction and coaching between employees and their managers," the Ford spokesman explained. "We want a lot of feedback -- from the people being rated as well as from the managers."
Part of that feedback could take the form of resignations by experienced executives.
Pub Date: 12/24/99