Does Your Annual Review Process Include Terminations?

By now most of you probably have had the chance to read the Telsla article where they terminated 400 employees directly after their annual review process. If not, check out the link. Also, my buddy Kris Dunn did a great write up on Tesla’s ‘unique’ culture as well over at the HR Capitalist.(Go Check it Out!) 

“The departures are part of an annual review, the Palo Alto, California-based company said in an email, without providing a number of people affected. The maker of the Model S this week dismissed between 400 and 700 employees, including engineers, managers and factory workers, the San Jose Mercury News reported on Oct. 13, citing unidentified current and former workers.
“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” the company said in the statement. “Tesla is continuing to grow and hire new employees around the world.”
My take is a bit different from Kris’s. Sure Tesla is a unique culture that has been ultra successful, but I’m wondering from an employee performance point of view, is firing employees during your annual process something that drives a sustainable culture?
Tesla is ultra cool, everyone wants “Tesla” on their resume or in their client list. Does that continue to be the case if you treat employees like this? I’m all for firing bad, underperforming employees, we all need to do this more and quicker. I think we all agree on that.
The question is, do you fire employees during your annual review process?
I’m wondering what the day or week before annual review time looks like at Tesla? Probably a lot of going away lunches and after hour drinks, but for everyone since no one really knows who will get ‘cut’ this time. Can you imagine those lunches!?
“Hey, team, everyone is invited to lunch next Thursday, just because, well, you know, it’s annual review time and we just want to say ‘thanks’ (“Thanks” now meaning “Goodbye” in Tesla speak) for all of your hard work, and, well, again, you just never know when one of us might want to do something else, and, oh gosh, we just never spend enough time together, so let’s break some bread!”
I’m also guessing the Friday after Tesla Annual Performance Review week is one big giant after-party!
Let’s face it, firing anyone during performance evaluation time is an awful way to run that process. You wait around for once a year to do most of your terminations, you’re not doing employee performance well at all!
If you have performance issues, high-performance companies address those issues immediately, work to correct, and if that doesn’t happen, they move to terminate as soon as it’s clear performance will not improve. Or you can wait around for f’ing ‘Death Day’ once a year and add a million times more stress to the process than is ever needed.
But what do I know, I mean it’s Tesla and Tesla knows all. Can’t wait to meet the ‘unicorn’ HR leader from Tesla at next conference I go to explain how brilliant they are for coming up with this nightmare.
HR on my friends.

One thought on “Does Your Annual Review Process Include Terminations?

  1. I completely agree with you Tim and normally I’m not that emphatic am I? 🙂 This is an abhorrent practice from a performance management perspective. It’s like that it might be part of a forced ranking process which is also an abysmal and archaic management approach. Come on people! You have the innovation to create the Tesla but not enough creativity to maybe have better performance conversations more than once a year?

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