What are the strengths and weakness of Harrah’s gainsharing program?StrengthsHarrah’s gainsharing program allowed competitive mindset among employees and improvements on costumer service. By introducing this program, employees could understand that if they work hard, they would be rewarded, and could also feel they were at the heart of the company. Management bonuses were determined by multiple components: 25% based on market share, 25% based on customer satisfaction, and 50% based on operating income. This ensured that managers manage properly their department and thus, allowing the company to gain market share.
Assignment Case study: Harrah’s Entertainment, Inc- Rewarding Our People Name Lucia Veronica Denis Senwayo Student 2B4047 Number Case Name Harrah’s Entertainment, Inc: Date 2014.11.10 Rewarding our people What are the strengths and weakness of Harrah’s gain-sharing program? Strengths Harrah’s gain-sharing program allowed competitive mindset among employees and improvements on costumer service By introducing this program, employees could understand that if they work hard, they would be rewarded, and could also feel they were at the heart of the company Management bonuses were determined by multiple components: 25% based on market share, 25% based on customer satisfaction, and 50% based on operating income This ensured that managers manage properly their department and thus, allowing the company to gain market share Weakness Raising service improvement levels was becoming harder and harder work Some employees tire of working hard and coming close to reward levels and then not getting rewarded E.g customer service metrics had increased positively but not to levels that merited a payout at most properties Another weakness is that Operating income results not affect costumer satisfaction goals If for example the company is registering losses in operating income, it might require extra investment in incentive plan for employees and thus annulling the merit of the program So, the company improve in overall costumer services through the gain-sharing program did not result in increasing bottom line for the organization In long-term the program may result in employee demotivation and high turnover What advice would you have for Winn about her recommendation to Loveman? I would recommend Winn to reevaluate the gain-sharing program • The incentive program should fit to the company Operating income Whether the company gets decrease/ increase in Operating income it should be reflected in the incentive, thus, rewarding employees based on the return on the investment Otherwise, the company may reward employees even when revenues are getting down • Harrah’s should ask feedback from employee about the effectiveness of the program and find out what motivates and excites their employees just as they have done with their customers So, based on the results, if necessary, Marilyn should recommend to management that they start to value their employees • • with the same regard that they their customers The company should introduce reward for individual performance For long-term benefit, the company should enrich employee growth opportunity, so that the success rate will be higher and have a much longer- • term effect on employee’ attitudes Marilyn Winn should bring an understanding of human behavior and motivators How has Harrah’s aligned its human resource practices with its strategy? How well (or not) you think they conducted is alignment work? Harrah human resource focus on employee evolvement has a source of low turnover and increase motivation This would be achieved by: • First, finding people appropriate for the job – Harrah’s has focused on • recruiting the most qualified candidates Second, the socialization process around bringing new employees into the company – This initiative focused on pre-90-day turnover, “quick quits”, that allowed new entry employees to move to a different role if they are unhappy with their current roles, enhance interaction with Human Resources and functional mangers, to analyze and validate commitment So, through • communication with new employees, they could lower turnover Third, the long-term maintenance of employee motivation and performance – Gain-sharing program was introduced to improve costumer satisfaction, as a result, employee would reward for improving costumer service Satisfied employees tend to provide high quality service, and it would result in satisfied costumer and finally brings costumer loyalty Has Winn stated: “I cant deliver great costumer service unless I have a stable workforce You need to get our people to stay with us” So, prioritizing low turnover was a key strategy for sustainable growth, but there were no guarantee of long term benefit Gain-sharing program, since it was difficult to be achieved and it may lead to employee demotivation in future This article is a case study of hiring policies and reward system at Harrah’s Entertainment Harrah’s want to install an incentive pay plan that instill competitive spirit in the employees and competing against rival casinos as well as their own past records I think it is an excellent benchmark to start the project Also, I am impressed with the efforts of Harrah’s in converting the product based company to marketing based company They brought new experts in database marketing from other industries; they introduced Total Rewards program that helps to understand customer preferences It is not surprising to know that the long-term managers and employees felt entitled to be employed in Harrah’s regardless of their performance This was the big challenge to Phil Satre when he took over the company as the president He wanted to replace the institutional priorities of long-term tenure and employee happiness with ideals of excellence and customer satisfaction This does not mean that Satre threw the employees under the bus He brought a new human resources manager, Winn, who is familiar with field operations He hired Gary Loveman, who is very familiar with Harrah’s operation, as a new Chief Operating Officer New hiring philosophies were introduced Instead of hiring a person who meet the job requirement, Harrah’s want to hire the best person for that particular position I am pretty sure that can be accomplished only with higher pay and rewards I understand that it is not easy to satisfy casino customers who, in most of the cases, lose money It is the establishment’s responsibility to make the customers happy by providing valuable experience so that they will come back again Loveman and Winn worked hard to train their employees to provide such an experience Loveman introduced gain sharing program where employees were rewarded for improving customer service regardless of the improvement of operating income Managers used to be awarded solely based on the improvement in the operating income Loveman changed that structure Now, Customer satisfaction determines 25 % of the bonuses It is interesting to know the regulations in the casino industry If an employee handshake a customer, that employee has to raise his/her hand, pull the sleeves and show the hands to the cameras installed at the ceilings This procedure is followed to make sure that the employee did not get any bribe But the negative part is that employees were hesitant to hand shake with the customers