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Case 2

Tesla briefly had a higher market value than GM in 2017. Tesla's strategic plan was to first offer an electric roadster without compromises, then less expensive family cars that could charge with solar power. However, Tesla laid off 700 workers at its California plant despite needing to ramp up Model 3 production. Elon Musk defended the layoffs, saying performance reviews and higher standards were needed for Tesla to compete against larger companies. By early 2017 it was clear Tesla wouldn't hit its goal of producing 5,000 Model 3s per week, and it faced labor issues like pay disputes and high accident rates. Tesla hired a new HR head in 2017 to help address disputes between workers.

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176 views1 page

Case 2

Tesla briefly had a higher market value than GM in 2017. Tesla's strategic plan was to first offer an electric roadster without compromises, then less expensive family cars that could charge with solar power. However, Tesla laid off 700 workers at its California plant despite needing to ramp up Model 3 production. Elon Musk defended the layoffs, saying performance reviews and higher standards were needed for Tesla to compete against larger companies. By early 2017 it was clear Tesla wouldn't hit its goal of producing 5,000 Model 3s per week, and it faced labor issues like pay disputes and high accident rates. Tesla hired a new HR head in 2017 to help address disputes between workers.

Uploaded by

saharkhan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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By 2017 Tesla Motors briefly had a market value higher than the much-larger General Motors.

Tesla’s strategic plan,


formulated in 2006 by company founder Elon Musk, was to start by offering a high-performance energy-efficient electric
roadster “with- out compromises” and then expand to offer less-expensive family cars, while eventually enabling battery

recharging with solar power devices.83

Tesla also laid off about 700 workers at its California manufacturing facility. Many union activists asked why, having to
ramp up production of the new Tesla Model 3, the company would dismiss so many employees. Some felt it wasn't
because of poor performance reviews, but because Tesla wanted to fire employees who wanted a union. Elon Musk
defends dismissing the 700 workers. Basically, he said (1) most companies have performance reviews and use them to
screen out employees, and (2) because it wants the highest-quality cars, Tesla needs to have higher performance standards
than its competitors. As Musk says, if a little company wants to compete with a giant one, the little one must have a lot
more skill, or it will get pummeled. Some of Tesla’s HR procedures are also somewhat unusual. For example, Tesla requires
that new employees sign confidentiality agreements prohibiting them from discussing Tesla’s business strategy and
working conditions. The United Auto Workers filed unfair labor practice charges against Tesla, claiming that such
agreements violate employees’ rights. Tesla does use some sophisticated HR tools to improve its HR processes. For
example, they used talent analytics to determine if employee referral programs improve their recruitment and retention
processes and distributed an employee engagement survey.

By early 2017, it was clear that Tesla was not soon going to achieve its goal of producing 5,000 Model 3 family sedans per

week, and the company also faced numerous human resource management–related challenges. For example, hundreds of

workers stopped building Tesla’s battery factory near Reno, Nevada, claiming that outside contract workers were lowering
their pay. Workers at Tesla’s car plant complained of high employee accident rates. Musk reportedly said that Tesla wasn't

skimping on safety to make more profit, but rather to survive and continue to offer employment. By May 2017, Tesla

appointed a new HR head, Gaby Toledano, with the title Chief People Officer. In announcing the appointment, Tesla noted

that she would help Tesla address its labor and harassment disputes. Ms. Toledano acknowledged that some disputes

between workers weren’t reaching the HR office fast enough, but she said she’s working on the problem. Furthermore,

Tesla employees receive antidiscrimination and antiharassment training.


Questions
3-13. Was Tesla’s human resource strategy consistent with its overall strategy to produce “uncompromising” high-
performance cars?
3-14. Given what Kia UK accomplished, should Tesla implement such an engagement program? Why?
3-15. What would you do now if you were Tesla’s Chief People Officer?
3-16. Based on the case, provide examples for Tesla of at least four strategically required organizational outcomes, and
four required workforce competencies and behaviors.
3-17. Provide a brief illustrative outline of a strategy map for Tesla.

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