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Harrah’s
Entertainment, Inc :
Background
Incentive pay plan to reward employees at
Harrah’s.
To improve customer service metrics at each of
the Harrah’s properties.
To tell employees that they were at the heart of
Harrah’s strategy.
Revenues were dropping off because of
broader economic condition.
 Company Profile
Harrah's Entertainment, Inc. is a
private gaming corporation that owns and
operates casinos, hotels, and six golf courses
under several brands.
The company, based in Paradise, Nevada, is the
largest gaming company in the world.

http://en.wikipedia.org/wiki/Harrah's_Entertainment
was founded by
William F.
Harrah at 1937
Operating Strategy

A “must-see property”
Product-based company  Marketing-based company

Create Total Reward Program

1999 Hired Gary Loveman as Chief

Operating Officer
History of Harrah’s Culture
1984 Phil Satre as CEO of Harrah’s
Management exhibited pride & ownership
Harrah was very particular about the condition
of the property
The culture was not competitive
Want head of HR who understood operations &
business strategy

1999 Satre offered Winn as head of HR

Developing People

Marilyn Winn
• Was running Harrah’s operation in Shreveport,
Louisiana
• Had worked HR from 1988-1995
• Loved being in operation
• Plan for re-creating the HR strategy
– Compensation & Benefit
– Property Product & Service
– Executive Search & Leadership Development
• Loveman reminded about Turnover
Lowering Turnover

• The Right People – Hiring Standard

• Hiring & Socializing Process

– Quick Quits

• New Reward System to Motivate

Employee to Achieve Customer
Service
Customer Service

Good customer service can make customers feel

like even if they don’t win, they got an experience
they were willing to pay for, they had good time.
That’s what we want our customers to experience.
-Loveman-
New Reward System
• Gain-sharing Program
– Rewarded for improving customer service.
– There was no absolute level to reach, but employees
were rewarded for percentage of improvement in
customer service scores.
– The Targeted Player Satisfaction Survey (TPSS)

“If you improve service, irrespective of financial

performance, you will still get rewarded”. Loveman
Gain-Sharing Program

The last year’s incentive pay plan cost

was..

US$16 Million
Competition

Two most direct

competitors is

MGM Mirage & Park

Place.

MGM Mirage was a product of merger between MGM Grand Inc.

and Mirage Resorts, Inc. at 2000

http://www.lasvegassun.com/news/2009/nov/06/following-harrahs-lead-marketing/
Case Problem
The profit numbers were not where they should
be, the economy was dragging, and Harrah’s
employees were thankful to just have job, let
alone a bonus payout.

But customer service was more important, so how

keep employees motivated?

Was the bonus payout program an effective

motivator?
Gain-Sharing Program
Strength Weakness
 Effectively helps Harrah’s to promote  Considered as an expensive

their strategy to be a marketing-based program.

& customer-obsessed company

(customer service excellence).
 Effectively compensates employees
according to their customer service  May caused a wrong paradigm

performance (measured by the among employees related with

customer satisfaction). the loyalty concept and made

them a money-oriented
employee.
Problem Solving

Considering condition of Harrah, we recommend

to stop the gain-sharing

Short-Term  Reward Program

Long-Term  Flexibility Benefit Plan

Good Communication
Keep The Promise!!
Problem Solving
Reward Program
Reward

Financial Non Financial

Direct Indirect Job Environment

Base Pay Shift Worker Holiday Medical Policy Challenge Medical Reimbursement Program Open & Frequent Communication Career Security
Theory of Needs & Motivation
Maslow’s Hierarchy of Needs Maslow's is often portrayed in the shape of a
pyramid, with the largest and lowest levels of needs at the bottom, and the need
for self-actualization at the top, also the needs for people

http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs
Problem Solving
Maslow’s Hierarchy of Needs

Self Actualization ●
Work Challenges

Esteem
●
●Shift worker
●Open and frequent communications
●

●
●Medical reimbursement program
Love/Belongingness ●Holiday
●

Safety
●
●Career security
●Medical policy
●

Physiological ●Base pay

Theory of Needs & Motivation
Herzberg proposed the Motivation-Hygiene Theory, also known as the Two
factor theory (1959) of job satisfaction. According to his theory, people are
influenced by two sets of factors:

Motivator Factors Hygiene Factors

• Pay and Benefits
• Achievement • Company Policy and Administration
• Recognition • Relationships with co-workers
• Work Itself • Supervision
• Responsibility • Status
• Promotion • Job Security
• Growth • Working Conditions
• Personal life
http://en.wikipedia.org/wiki/Frederick_Herzberg
Theory of Needs & Motivation

Hygiene Factors Reward Program

Pay and Benefits Base pay
Medical reimbursement program
Company Policy and Administration
Medical policy
Relationships with co-workers Open and frequent communications
Supervision Work challenges
Status Shift worker
Job Security Career security
Working Conditions -
Personal life Holiday
Problem Solving
Problem Solving
How are market-based net profits derived?
Conclusion

Considering Harrah’s economic conditions, we

recommend to stop the gain-sharing programs,
even if the program proved effective in motivating
employees. To keep motivated, so we recommend
a short-time plan and long term plan.
Thank You
References

http://en.wikipedia.org/wiki/Harrah's_Entertainment

http://www.lasvegassun.com/news/2009/nov/06/following-harrahs-lead-m
arketing
/

http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

http://en.wikipedia.org/wiki/Frederick_Herzberg