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 propertyµ 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)

³If 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
y

Weakness
y

Effectively helps Harrah¶s to promote their strategy to be a marketing-based & customerobsessed company (customer service excellence).

Considered as an expensive program.

Effectively compensates employees according to their customer service performance (measured by the customer satisfaction).

May caused a wrong paradigm among employees related with 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 Long-Term Reward Program

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 ‡ Shift worker ‡ Open and frequent communications ‡ Medical reimbursement program ‡ Holiday ‡ Career security ‡ Medical policy ‡ Base pay

Esteem

Love/Belongingness

Safety

Physiological

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 ‡ ‡ ‡ ‡ ‡ ‡ Achievement Recognition Work Itself Responsibility Promotion Growth ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Hygiene Factors Pay and Benefits Company Policy and Administration Relationships with co-workers Supervision Status Job Security Working Conditions Personal life
http://en.wikipedia.org/wiki/Frederick_Herzberg

Theory of Needs & Motivation
Hygiene Factors Pay and Benefits Company Policy and Administration Relationships with co-workers Supervision Status Job Security Working Conditions Personal life Reward Program Base pay Medical reimbursement program Medical policy Open and frequent communications Work challenges Shift worker Career security 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-leadmarketing/ http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs http://en.wikipedia.org/wiki/Frederick_Herzberg

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