Ford: Talent Management Challenges for Electric Vehicles

Abstract

The case explains a novel employee performance improvement system, the performance enhancement plan (PEP), implemented in 2022 by Ford Motor Company under the leadership of CEO Jim Farley. Through PEP, Ford offered an option of severance pay to underperforming engineers in the combustion engine division. These employees, under PEP, were exempted from taking Ford’s weekly performance evaluation tests. As part of these tests, engineers would have had to opt for pursuing traditional performance improvement under a mentor, which could be followed by termination if employees could not show performance improvement. Experts lauded PEP for the benefit to underperforming white-collar workers. However, as the market for electric vehicles (EVs) was growing, Ford, like other automobile industry players, was experiencing a talent crunch for the software coding needed for EV operations. How could Farley manage the talent crunch for its newly created EV division? Should he retrain the current combustion engine workforce for EVs? How could Ford benefit from offering severance pay? The case encourages students to explore performance improvement plans that companies can adopt. It also helps students examine ways of managing a talent crunch through reskilling.