An employee evaluation program is unsettling - and angering - thousands of managers at Ford Motor Co.
The program, which targets 5 percent of 18,000 managers at the company for not meeting performance goals, has drawn several suits charging discrimination against middle-aged male executives.
Championed by CEO Jacques Nasser, the program is adding more stress to Ford as it copes with the Firestone tire recall, falling sales and profits, and quality problems.
Ford stands by program
Despite the widespread opposition, the company stands by the evaluations. But a spokeswoman said they are undergoing routine review.
'The program is going to continue,' said Ford spokeswoman Anne Marie Gattari. 'There is always review going on of all of our processes. The lawsuits are not the reason the review is going on.
'When we implemented it, we said we could review it and look at how well it's working and if it's doing what it intended. There isn't a special task force in place.'
Under the program, managers receive grades of A, B or C. The suits allege that Ford planned to give at least 10 percent of the managers C's but later changed that to 5 percent.
Executives rated C risk losing their bonus or raise. If they receive C grades two years in a row, they can be demoted or fired.
One of several lawsuits was filed earlier this year by employee John Kovacs, a white male executive employed in the human resources department at Ford Credit. Kovacs claimed in his suit filed in federal court in Detroit that 'consideration of race and gender in employment decisions to benefit minorities and to disadvantage white males is standard operating procedure at Ford.'
Ford and Nasser have denied all allegations of wrongdoing.
GE was model
Similar performance review programs have been used at other large companies, such as IBM Corp. and General Electric Co., where Chairman Jack Welch instituted it.
But some question whether such a system can succeed at a company such as Ford, which is a family controlled business, particularly if family members take a strong interest in the welfare of its employees. Ultimately, such a program reflects on family-members, who may be uncomfortable with the harshness of the process.
The family is not the problem, it's just an excuse, according to Noel Tichy, a management consultant who advises Ford. Tichy, a professor at the University of Michigan Business School, compares Nasser to GE's Welch, and says there is always initial resistance to change.
Said Tichy: 'What he's trying is a no-brainer. No company can be world class without world-class people.'