In 2007, Gap Inc. found itself in a state of shock. The San Francisco-based retailer struggled in almost every area. From challenging business results to a failed new venture called Forth & Towne to the theft of a laptop computer that compromised the personal data of about 800,000 current employees and former applicants -- business at the Gap was edging toward unfashionable.
The company needed a makeover, which involved closing Forth & Towne, eliminating 2,200 positions, converting Old Navy Outlet stores to Old Navy stores and closing a distribution center. Eva Sage-Gavin, executive vice president of human resources, corporate social responsibility and communications, says one key philosophy drove her thinking during that time: Treat employees with "transparency and dignity."
"We wanted to make sure we set the standard on how people were treated and that there was an empathetic response to how unsettling this could be," says Sage-Gavin, who started with the company in 2003.
To that end, she flew out to Forth & Towne stores to meet with employees personally, whether they were being retained or moving on to a different job. "With this idea of transparency and dignity and personal empathy, we spent a lot of time asking, 'What would the maximum level of support look like?' "
While trying to preserve morale, Sage-Gavin also held face-to-face meetings with company leaders and employees, where they could recognize and discuss the company's problems, how they were caused, and the solutions -- even when they involved terminating some employees. The result was a workforce that openly communicated about what went wrong and how it could be fixed and prevented.
Sage-Gavin also initiated an HR summit, yet another forum to discuss important topics and answer questions.
"We went into tough business decisions [asking] 'How do we have a culture where there's a lot of trust and respect, and people feel that they know what we know as quickly as we know it?' "
It was this successful retooling to enhance the company's transparency and trust in such a difficult time that has earned Sage-Gavin a place on this year's HR Honor Roll roster.
During the laptop crisis, Sage-Gavin prided herself on keeping a focus of empathy on those who were vulnerable. She created a 24/7 helpline as well as a Web site that was updated frequently with any new information about the case. She also coordinated conversations between affected parties and Gap's senior leaders. She even took many of those calls herself -- often talking with parents of teenage applicants whose information had been compromised.
Her changes helped to keep employees engaged. In an internal survey, 98 percent of Banana Republic (also owned by Gap) employees, 97 percent of Gap brand employees and 90 percent of human resource staff agreed with the statement, "I understand why we are making the change related to cost savings and reshaping."
In an effort to reduce backlash and increase communication even further, she held open director-and-above meetings where workers were able to question senior leadership.
On the hiring side -- a facet of the business all too evident during the busy holiday rush -- Sage-Gavin introduced an electronic recruiting and candidate-management system to decrease a store manager's recruiting time and improve screening. The company gets approximately 1 million applicants and hires about 190,000 people per year; many of them work temporarily during busy times of the year, such as the holiday season. The full-time staff is around 150,000 in 50 countries.
Sage-Gavin is the first HR executive at the company to be a member of Gap's C-suite, meaning she is on the company's Executive Leadership Team and reports directly to CEO Glenn Murphy.
During a CEO transition to Paul Pressler in 2003, vice presidents were leaving the company at alarming rates. When the company was transitioning its CEO again in 2007, to Murphy, Sage-Gavin led the company's total-rewards redesign, moving it away from stock options and toward restricted-stock awards.
She also initiated a severance package for employees at the vice president-level and above, which made them stay longer. Her changes helped keep the turnover rate about half of what the company experienced during the company's CEO transition in 2003.
Sage-Gavin also made healthcare plans available to 80,000 part-time employees and introduced health-reimbursement accounts. In the first year, the targeted enrollment was 7 percent, but they actually achieved 19 percent enrollment.
Overall, her initiatives in the 2007 transformation helped lower operating costs by $55 million from the previous year.
Patrick M. Wright, director of the Center for Advanced HR Studies at Cornell University, interviewed her for an issue of the school's publication, Human Resource Planning, and touted Sage-Gavin's deep knowledge of the industry and passion for her work
Since working at the Gap, "she has overseen the development of a number of processes within HR to help promote Gap's corporate social responsibility efforts," says Wright, calling her a "tireless champion of these efforts."
He also says she has "been a model for progressive approaches to managing the workforce."
Sage-Gavin might be succeeding at her job because she truly sees it as "the most exciting experience of my career." A taste for fashion doesn't hurt either, as she notes how she loves seeing clothing-line reviews in the development stage.
"I like the idea that we're part of people's personal expressions of self."