Ford's Performance Appraisal System LO27128

Date: 08/09/01

[Host's Note: The first pararaph is a blatant adv... But, the article
beneath is stimulating. I think perf appraisal systems are often
obstacles. The system at Ford has certainly created a lot of
complaint. What can we say about perf appraisal from a learning
organization point of view? ..Rick]

We hope the following article prevents your organization from experiencing
considerable pain. If you have an interest in an automated PA system that
is legally defensible, please respond with a request for a demonstration
over the internet or visit us at

 ----- Article -----
Tuesday July 10 2:45 PM ET
Ford Changes Job Rating After Lawsuits

DETROIT (Reuters) - Ford Motor Co. (NYSE:F - news) said on Tuesday it was
changing an annual evaluation system that has triggered age discrimination
suits and would no longer dictate how many employees got poor job ratings
that would cause them to face possible dismissal.

The move to eliminate quotas from the job-rating system marks a setback
for chief executive Jacques Nasser, who launched the system in January
2000 as part of bid to shake up the company's corporate culture and put
more focus on bottom-line results.

Ford spokesman Nick Sharkey said the revamping of the performance
appraisal process and the elimination of its quotas were announced Tuesday
in a note to employees at the company's Dearborn, Michigan, headquarters.

The changes come just four days after the legal arm of the American
Association of Retired Persons, the leading U.S. advocacy group for older
and retired workers, said it was throwing its weight behind age
discrimination suits filed against the automaker.

Under Ford's rating system, about 18,000 mid-level managers were graded
annually and given ratings of A, B or C for their annual job performance.

One year at the C level meant no bonus and two years could lead to
dismissal or demotion. Ford told its supervisors last year that 10 percent
of managers should get the poorest grade, but the company had cut that
proportion to 5 percent for this year.

Sharkey said the appraisal process would continue, based on mutually
agreed objectives between managers and their supervisors. But he said the
A, B, C grades were being scrapped in favor of ``top achiever, achiever
and improvement required'' and there would no longer be any guidelines
regarding the number of employees grouped in the lowest category.

``There's no certain quotas anymore in the lowest category,'' Sharkey
said, adding that managers with the poorest rating would no longer be
barred from receiving bonuses or merit pay increases.

He said two years in the poorest performing category could still lead to
dismissal, but only under a worst case scenario. ''We certainly would work
hard to make sure that didn't happen,'' he said.


Ford, the world's second largest automaker, faces dozens of individual
cases and a possible class action lawsuit because of charges that it has
used the grading system to rid itself of older workers.

The system has also prompted reverse discrimination charges against Ford,
based on allegations that it was targeting older white male employees for

Sharkey said the Tuesday's changes in the job-rating process were aimed
strictly at boosting morale, however, not at influencing the outcome of
any lawsuits.

``Some of our managers have expressed a concern that this system had an
adverse effect on teamwork and morale. We listened, and were responsive,
and made some changes that we're telling employees about today,'' he said.



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