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Recently, a screenshot titled "Spirit of the Group's Management Committee Meeting in July 2024" has been circulating on the Internet. The picture is suspected to be a screenshot of the internal management committee meeting of Chery Holding Group Co., Ltd. (hereinafter referred to as Chery Holding) in July. The content of the picture shows: "Implement the overtime issue in personnel improvement actions, 3 people do the work of 5 people and get the wages of 4 people, and eliminate ineffective and low-quality overtime." In this regard, the reporter of "Daily Economic News" verified with Chery Holding, but no response was received as of press time.

In fact, amid the price war in the auto market, automakers are generally under pressure. In the first half of this year, many automakers reported layoffs or performance appraisal adjustments.

"The adjustments made by automakers in talent management and performance appraisal undoubtedly reveal that the auto industry is entering a more complex and severe stage of competition. These signals mean that the competition in the auto industry is becoming increasingly fierce, and companies are facing greater market pressure and challenges. In order to remain invincible in the competition, automakers have to increase their attention to talent management and performance appraisal, and enhance their competitiveness by optimizing human resource allocation and improving employee performance and innovation capabilities." Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, said in an interview with a reporter from the "Daily Economic News".

Will the “345” strategy be implemented to improve personnel efficiency?

The above-mentioned screenshot of "Spirit of the Group's Management Committee Meeting in July 2024" shows: "The group's personnel department must implement the requirements on overtime issues into specific actions to improve personnel work, especially around the personnel '345' strategy, research personnel efficiency, work quality and work ability, and establish a human efficiency model for business segments. Remember not to understand it as a simple addition and subtraction, and truly achieve 3 people doing the work of 5 people and getting the salary of 4 people." In response to this, Chery Holdings responded to the media that the screenshot was indeed the content of an internal publication, but this was a normal industry performance management rule to improve personnel efficiency and (should not) be distorted and interpreted.

In fact, in July this year, the topic of Chery employees exposing the company's serious overtime work attracted widespread attention. Chery responded that "media reports about Chery's 'illegal overtime' and other content are unconfirmed news and are false information." The reporter also noticed that according to the above-mentioned online screenshots, the Chery Holdings Management Committee also emphasized the previous "overtime" public opinion, saying that the recent public opinion about Chery's overtime work has caused a certain degree of damage to the company and actually exposed loopholes in the company's management.

It is worth mentioning that in this management meeting, the Chery Holdings Management Committee stated that the company should treat employees as family members, and said: "We must abandon the simple and crude human sea tactics and fatigue tactics, and make every effort to create a 'Happy Chery'."

Despite the many challenges in talent management, Chery Holding's performance this year is remarkable in terms of sales volume. In July, Chery Holding Group sold about 196,000 vehicles, a year-on-year increase of 30.1%; in the first seven months of this year, Chery Holding Group's cumulative sales were about 1.296 million vehicles, a year-on-year increase of 45.4%.

However, the Chery Holding Management Committee does not seem to be satisfied with the above results. The above screenshot shows that the Chery Holding Management Committee stated in this operation meeting that Chery Holding's profit, operating cash flow and other indicators in the first half of the year have achieved the challenge version of the target, but revenue and sales have not reached the target, and there have been large deviations in the operation in the past two months. Therefore, in the second half of the year, Chery Holding must make every effort to expand the market, establish a normal distribution mechanism and a responsibility accountability mechanism, strive to improve the second half of the year, and plan for higher goals next year.

"Chery's '345' strategy not only improves employee efficiency, but also emphasizes attention to employee health and happiness. This is not only a strategy to cope with market competition pressure, but also an important part of corporate public opinion management. By improving efficiency, Chery attempts to gain an advantage in cost control and market response speed; and strengthening employee care will help maintain the corporate image and reduce negative public opinion caused by high work pressure and employee dissatisfaction." said Zhan Junhao.

Multinational car companies are also "rolling" employees

In fact, the pressure from the auto market has not only been transmitted to domestic automakers, but many multinational automakers are also under pressure.

General Motors recently announced a new employee performance evaluation and reward system to motivate outstanding employees and eliminate underperforming ones. According to an internal memo from GM, GM will give bonuses of up to 150% to the top 5% of employees to attract and retain talent. This move also puts more pressure on underperforming employees to either improve their performance or leave.

GM said that in order to achieve the company's ambitious goals, it needs clearer performance standards and responsibility systems, and the company hopes to build a high-performance workforce. However, GM China has not yet responded to whether the employee performance evaluation and reward system is also applicable to the Chinese team.

In addition, American auto giant Ford is also adjusting its talent management system. Ford CEO Jim Farley said in a financial report conference call earlier this year: "It is not enough to have the right talent. In the past two years, we have realized that we must establish the right performance management system. This is a fundamental change in the way the company operates."

Stellantis recently announced layoffs. The company is considering cutting more than 1,200 engineering positions in Europe and the United States, and plans to offer a new round of voluntary buyout programs to U.S. salaried employees to cope with the challenges brought about by declining profits and electrification transformation.

Some believe that the actions of the above-mentioned automakers reflect the automotive industry's emphasis on talent management and performance appraisal in the face of electrification transformation and market competition pressure.

In this regard, Zhan Junhao said: "These adjustments (in terms of talent teams) also reflect the importance that automakers attach to public opinion management. In today's world of rapid information dissemination, any policy or decision of an enterprise may arouse widespread attention and discussion. Therefore, when adjusting talent management and performance appraisal policies, automakers must fully consider the impact of public opinion, ensure that the policies can be understood and supported by employees, and avoid negative public opinion caused by inappropriate policies."

Daily Economic News