Ford Introduces OKRs To Cut Costs, Improve Quality

Ford is revamping its employee bonus system to prioritize cost savings and improve vehicle quality, aligning bonuses with strict performance metrics.

After a brutal year of headlines for FoMoCo, CEO Jim Farley has made it clear that employee accountability is at the forefront, with the revised bonus structure expected to hold employees to specific quality and growth targets. According to Reuters, the most significant change will affect managers, whose bonuses will be cut by 65 percent unless the company meets its targets. Unreal that we're this deep into the game and Ford is just now introducing objectives and key results for managers.

“Objective and Key Results,” or OKR, is a goal-setting framework designed to help organizations set, communicate, and measure clear goals and outcomes. OKRs are used to align team efforts with a company’s broader mission, ensuring that everyone is working toward measurable, impactful results.

This bonus overhaul is part of a broader cost-cutting push. Ford recently scrapped plans for a three-row electric SUV, absorbing a $1 billion hit, and announced a temporary pause in F-150 Lightning production from mid-November through early January to help manage inventory. Though sales of the Lightning are up 86 percent year-over-year, Ford has already scaled back production to one shift, acknowledging that demand has not reached initial projections.

To bolster F-150 Lightning sales, Ford is incentivizing dealerships with up to $1,000 for each model ordered from regional distribution hubs.

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