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GAP Focuses Resources on Employees with High Potential

By William Keenan Jr.

“We understand that the single biggest reason employees leave an organization is because of their relationship with their direct manger, and it’s precisely for that reason that all managers from all of our stores take part in a detailed training program that promotes the importance of retaining employees for as long as possible by keeping them engaged.”

For GAP Inc. and its stores – including such brands as Old Navy and Banana Republic – engagement is part of the definition of a high-performing employee. “We think of a high-performing employee as one who is very engaged,” notes Marko Satarain, the company’s Director of Talent Management. “If they’re engaged they’ll produce more and stay longer. So there’s a business imperative as to why we would want to hire and retain a high-performing or highly engaged employee. If an employee is engaged, we know their productivity levels will be higher than the norm, they’ll stay with us longer and it will actually influence and inspire their contemporaries or counterparts to perform better as well.”

In order to ensure it has an available pool of high-performing and highly engaged people to staff its stores, work its brands, fill its corporate needs and support the GAP’s ambitions expansion efforts (it’s currently taking aim at Italy and China), the company pays close attention to the engagement levels of its employees and uses this as a way to identify the commitment and promise of what it calls “HIPOs” – high-potential employees.

“We look at employees’ rational and emotional commitment to the organization, basically through observable things like the way they approach their work, the quality of the work and their level of absenteeism or tardiness,” explains Satarain. In addition, the GAP also does an annual employee opinion survey that goes to the entire organization and captures employee opinions about the company, including their engagement levels. It asks questions about how satisfied employees are with their job, about the GAP’s reputation in the community and about employees’ intentions to stay with the company for the long term.

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Ability, Aspiration, Commitment

Using the employee opinion survey and observations of managers and direct supervisors, GAP divides its employees into three main segments – high-potential employees, key talent and core employees.

According to Satarain, high potential employees are those who meet certain criteria, regardless of what level they’re at in the organization. “They’re recognized as capable at what they do well,” he says, “and they also have what we call ‘learning agility’ – which means they’re able to face situations that are ambiguous, or have enormous change associated with them, and yet they emerge successfully after that change. In other words, they have a high technical and functional capability, and also a high degree of emotional intelligence.”

Satarain notes that if someone is going to be deemed a high-potential employee, the company also wants to determine what their aspiration is – “because someone who’s high potential has the ability to take on more, but the next question is, ‘Do they want to take on more?’ And sometimes they don’t. If they don’t have the aspiration, then they wouldn’t be considered high potential.”

And if they do have the ability and the aspiration? Says Satarain: “The final question is, do they have the commitment? This is one of the ways in which their level of engagement is important. Do they want to take on more at the GAP Inc.? Do they have the ability to do more and the desire to do more for the GAP? If they do, then we call them high potential, and we allocate training and other resources to develop these people in order to accelerate their ability to contribute in greater ways.”

Employees designated as having key talent, says Satarain, have a specialized skill set. “They may or may not be high potential, but their skills or their influence provide a competitive advantage for us. In some cases they might be the single point of failure if they weren’t available to their department or to the organization.”

Because of this, the company makes a concerted effort to engage and retain them. “That’s largely done through very specific conversations between them and their leaders, who are essentially encouraged to do what it takes to engage and retain that key talent,” explains Satarain.

The largest group, naturally, is core employees. They do what’s expected of them, but most aren’t key talent or high-potential employees. Still, “You can’t ignore them,” Satarain says. “They need to be cared for and nurtured, and you need to do what you can to sustain their satisfaction in the workplace and keep them there.”

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Preparing for the Future

High-potential employees – around 10% of the GAP workforce at any given time – are viewed as the company’s managers and directors of the future. “If you’re identified as high potential at the GAP, that basically means we have to do our part as far as providing you with training and development opportunities and capitalize on your ability to contribute at a higher level,” Satarain explains.

That might mean giving a high-potential employee a different assignment, moving them up a level or two, or even moving them laterally in some cases. “They may be asked to move laterally into a new area because we recognize that they can augment their current skill sets with what they already know by moving into a new area,” says Satarain, “and that might prepare them for an even larger move in the future.”

Managers can also provide their high-potential employees with some non-traditional growth and development opportunities. “Many times their development plan will include stretch assignments, or assignments with different task forces or committees charged with solving company-wide problems that we’ve identified as challenges for us,” Satarain notes.

Another developmental step for high-potential employees as they move up through the ranks is a five-day “premier class,” which is essentially a simulation of what it’s like to be working at the leadership team level at the GAP. “It’s a detailed simulation, and the people selected to go get first-hand exposure to the CEO, the chief strategists of the organization and other members of our executive leadership team,” Satarain explains. “They also get exposure to external thought leaders who talk about topics that can make them even more impactful leaders. It’s a premier opportunity for those employees to participate in a really amazing team-oriented developmental exercise that binds the people who go through it together, and they forge relationships with each other that last throughout their careers.”

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Rewarding Performance

The GAP does its best to engage all employees at all levels and in all segments through a number of other tools as well. “We try to reward performance through annual evaluation and feedback – which informs compensation and bonus decisions,” explains Satarain. There’s also a spot bonus program to recognize employees who perform extraordinary feats within the year, recognition for community service efforts and a peer-to-peer recognition program that enables one employee to recognize another.

Satarain says that in all these efforts, communication is key: “It’s very important that employees of all types receive communication from the corporate center and through their managers,” he notes. “We understand that the single biggest reason employees leave an organization is because of their relationship with their direct manger, and it’s precisely for that reason that all managers from all of our stores take part in a detailed training program that promotes the importance of retaining employees for as long as possible by keeping them engaged.”

GAP employee communication efforts also include an online portal called GAPWeb that communicates news about the company and provides an opportunity for employees to offer feedback on certain topics. There’s also an internal social media site called Sketch Book that encourages employees to blog, talk about different employee-generated topics and offer suggestions on how to improve the experience for the customer.

“Part of our corporate culture is to look at the value proposition we offer employees to either come to work for us or to stay with us,” says Satarain. “It’s a matter of regularly communicating our appreciation for their contribution and having them tell us what can actually engage them further – to benefit the organization, to promote higher productivity levels and to encourage longer retention rates. And an important element of that is how we communicate to employees and how transparent we are.”

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Use ‘Stay Interviews’ to Identify Engagement Opportunities

Most people are familiar with “exit interviews” – when an employee is leaving the company for any reason, their manager will sit down with them to ask about their experience with the company, what the employee liked and didn’t like.

“But an exit interview gets at that information when it’s too late to do any good,” says Marko Satarain, Director of Talent Management, for GAP Inc. He believes that if you want to engage and retain key talent and high-potential employees, a better strategy is to conduct “stay interviews.”

“These can be very revealing and help you tailor your retention and engagement efforts,” Satarain explains. “Imagine a manger asking: ‘Why do you stay with us? Why do you keep doing this job? What do you like about it? What keeps you coming back and not accepting offers from other companies? What are the things that keep you here?’ The manager might learn to maintain certain things that are valuable to the employee and not make adjustments in areas where key talent is saying, ‘I really like this attribute in my job. That’s one of the things that keeps me here.’”

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September/October 2010

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