Chapter 8 Ethics in Practice Teslas Performance Review At Tesla, the automotive giant, the standards are set extremely high for their employees. In 2017, Tesla conducted its annual performance reviews as it does each year. Due to the review process, the company sees both voluntary and involuntary departures. During the review process, the managers discuss results that were achieved, as well as how those results were achieved with their employees.* Tesla also has a performance recognition and compensation program that includes equity rewards as well as promotions in some cases, along with the constructive feedback. The departure of employees during the review period is not unique to Tesla; however, in 2017 there was a large exodus of approximately 700 employees following their employee reviews. Elon Musk, who recently has stepped down from the role of chairman and has been under scrutiny for his behavior,* saw the media coverage of this news as ridiculous. You have two boxes of equal ability, and ones much smaller, the big guys going to crush the little guy, obviously, states Musk. So, the little guy better have a heck of a lot more skill or hes going to get clobbered. So that is why our standards are high . . . if theyre not high, we will die. Overall, approximately 17 percent of their employees were promoted, almost half in manufacturing. As Tesla continues to grow and develop new vehicles, it is consistently pushing the boundaries and pushing its employees to new limits. Performance reviews are of the highest importance for Teslas business to succeed; the company needs the best people with the best skills. It is constantly growing and attempting to suck the labor pool dry to fill positions at many of its locations and factories.

Questions: 1. What factors do you feel could have changed in Teslas approach to its performance reviews?

2. How can a high-pressure environment affect an employees performance? What factors should be considered to combat these issues?

Sources: K. Korosec. Tesla Fires Hundreds of Workers After Their Annual Performance Review. Fortune, October 14, 2017, http://fortune.com/2017/10/13/tesla-fires-employees/; D. Muoio. Tesla fired 700 employees after performance reviews in the third quarter. Business Insider, November 1, 2017, https://www.businessinsider.com/tesla-fired-700-employees-performance-reviews-2017-11; J. Wattles. Elon Musk agrees to pay $20 million and quit as Tesla chairman in deal with SEC. Money, September 30, 2018, https://money.cnn.com/2018/09/29/technology/business/elon-musk-tesla-sec-settlement/ index.html.