Gap Inc Refashioning Performance Management Case Solution

Talking about caveats when setting stretch goals, it should be kept in mind that the employees might resign and switch jobs, which would mean that those goals need to be taken ahead by the other members of the team or the replacement employees. They might lack the motivation to drive those goals, which would adversely influence the achievement of such purposes. Apart from this, as the goals would be long term, the employees might lose motivation in the short time as they would not realize the true benefits of performing hard in the present rather when the goals would be achieved in the future. Another issue is that the modified performance system might make the current employees lose the will to work hard as they might feel that they may not be able to get the high amounts of bonus as they previously used to under the new system.

To deal with such employee confusion and mitigate such risks that would threaten the long term sustainability of the business, specific measures would be put in place to ensure that the employees are kept in confidence, which will, in turn, positively influence their motivation and productivity. It will be assured that the managers are given sufficient leverage that would allow them to reward their employees based on their contribution towards the business unit performance. The employees would then be more oriented towards achieving collective success rather than focusing on individual success to earn bonuses. Collective success and strong teamwork would therefore reflect in the improved overall business productivity and well-motivated employees who would be focused on achieving their sub-goals, leading towards the achievement of overall goals. As the stretch components in the goals make them challenging and ambitious, it is highly important to have motivated staff who are willing to take leadership and responsibility for achieving the set goals. This can, therefore, be done by constant touch base so that managers can continuously provide feedback to the employees on their performance, and employees can grow in a continuous learning environment. As they would learn from their setbacks, they would be in a better position to perform well and improve the overall work quality required to meet the objectives and succeed in the long run. They would also be intrinsically motivated because they would feel that the organization is placing extra importance on their career progression by constantly providing them with mentoring and coaching opportunities that would help them move up the career ladder.

2. The old performance management at Gap Inc. Headquarters had a very “nice” culture. The new GPS (Grow, Perform, Succeed) performance management system supports a shift toward a “nice and honest” culture. It also replaces the year-end reviews with monthly “touch-base” sessions between managers and employees. Assume you were Ollander-Krane; how would you justify the changes? What practices would you introduce to support the implementation of the changes?  

The new GPS would help in shifting the organisational culture to a nice and honest one, which is a good thing as in the new performance management system, the employees will not be evaluated based on their year-end goals, which is usually a one-time thing but rather on monthly touch-ups where their supervisors would be giving them feedback, and they would be learning from their mistakes to perform even better. Through this method, there is a huge opportunity that the employees can improve their performance by improving upon the feedback received from their supervisors and increase their chances of earning a higher bonus than they could have in the traditional system as then they would have known about their performance and laggings at the year-end only and would not be able to do anything about it. With the monthly touch base, the opportunity for improvement is high. Not only will the employee performance improve on which his individual bonus depends, but there is a high likelihood that the performance of the entire department will improve, which will secure even higher rewards for the staff. It can, therefore, be deduced that a monthly touch base would prove to be a very effective technique for employee engagement and would allow for effective appraisal as the goals can be easily communicated to the employees. They can be motivated to perform well during the session by providing them with constructive feedback, which would therefore set the stage for an effective employee skills development plan. It helps establish the stance that under the new system, employees will be evaluated fairly as they would be constantly given a chance to improve and grow through monthly feedback sessions. By the year-end, whatever performance bonus employees get would therefore be a true reflection of their overall year’s performance.

However, being in the position of Ollander Krane, I would be considerate of the fact that bringing about such a shift might create a sense of insecurity among the employees who might not properly understand the system. Even the managers might show resistance to adopting the new performance management system, which is why I will make sure to have separate training sessions with the managers where I will make them realize the benefits of having a monthly touch base session and how it would potentially contribute towards improving their department performance. Once the managers own the new system, it would be easier to communicate it to the staff and the department employees. Also, effective manager training would allow them to provide valuable feedback to the employees and speak to them about the benefits of the new system. This way, there will be less resistance to change and smooth implementation of the new process.