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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,