(In this blog series, we share the stories of companies that have taken the first steps toward their employee development transformation. You can read the other posts in this series on Patagonia’s transition to real-time employee development, Adobe’s check-in culture and Goldman Sachs’ decision to completely remove numerical rankings.)
Anchoring performance management to a philosophy that unites your employees
With five brands and 135,000 employees across 90 countries, making HR process changes at Gap is no small feat. In fact, developing and adopting a new approach to performance management took the company two-and-a-half years. The transformation, however, was well worth the time and effort.
Gap had five main drivers for this change.
- Business performance was erratic.
- The review process was complex, time consuming and expensive. (For employees at its headquarters alone, the process took 130,000 hours and cost $3.3 million.)
- With all that being said, employees didn’t like reviews and they decreased employee engagement.
- The company needed a more consistent process globally.
- Most HR thought leaders were saying it was time for a change.
Rob Ollander-Krane, Gap’s Senior Director of Organization Performance Effectiveness, felt the company’s existing processes “only gave the illusion that employees will get feedback that is helpful in driving their performance, when it’s really designed to justify a ranking or rating that is tied to a compensation increase.”
Today, Gap’s review process is called “GPS” – which stands for Grow, Perform, Success – for two main reasons. First, the branding of the process matches the company’s stock symbol, also GPS. And second, it describes the main purpose of the process: just as a car’s navigation system guides the driver along a journey, Gap’s program allows employees to set a goal and re-calculate in real time to get back on path.
The program is based on four main components:
A performance standard
The company established a standard that employees use a guide for their performance. In Gap’s case, it asks employees to act in accordance with its company values and for managers to provide feedback and coaching to employees.
Gap asks employees to set eight goals or less by: (1) using the SMART methodology, (2) focusing on outcomes, not tasks and (3) stretching beyond their limits.
The “touch base”
This is the method by which information is collected and shared. For Gap, it means 12 informal, conversations per year between an employee and his/her manager on performance.
Gap managers hold 12 months of performance conversations, followed by one very short reward conversation with each employee each year. Rewards are based on both goal achievement and performance against the performance standard.
Gap has achieved remarkable success in terms of employee engagement and overall performance. A total of 90% of its employees were having monthly conversations with their managers. And, a company survey found that its managers were seeing better performance and its employees found they were learning more from these monthly performance conversations.
You can read more about Gap here: