Harrah's Entertainment, Inc

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Harrah’s Entertainment,

Inc :

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.

Background

Revenues were dropping off because of broader economic condition.

Company ProfileHarrah'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

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

company

Create Total Reward Program

Operating Strategy

1999 Hired Gary Loveman as Chief Operating Officer

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 competitiveWant head of HR who understood

operations & business strategy

1999 Satre offered Winn as head of HR

History of Harrah’s Culture

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

Developing People

• The Right People – Hiring Standard

• Hiring & Socializing Process – Quick Quits

• New Reward System to Motivate Employee to Achieve

Customer Service

Lowering Turnover

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-

• 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

New Reward System

Gain-Sharing Program

The last year’s incentive pay plan cost was..

US$16 Million

Competition

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

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

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?

Strength Effectively helps Harrah’s to

promote their strategy to be a

marketing-based & customer-

obsessed company (customer

service excellence).

Effectively compensates

employees according to their

customer service performance

(measured by the customer

satisfaction).

Weakness Considered as an

expensive program.

May caused a wrong

paradigm among

employees related with

the loyalty concept and

made them a money-

oriented employee.

Gain-Sharing Program

Problem Solving

Considering condition of Harrah, we recommend to stop the gain-sharing

Long-Term Flexibility Benefit Plan

Short-Term Reward Program

Good CommunicationKeep The Promise!!

Reward ProgramReward

Financial

Direct

Base Pay

Shift Worker

Indirect

Holiday

Medical Policy

Non Financial

Job

Challenge

Medical Reimbursement Program

Environment

Open & Frequent

Communication

Career Security

Problem Solving

Theory of Needs & MotivationMaslow’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

•Work ChallengesSelf Actualization

•Shift worker•Open and frequent communicationsEsteem•Medical reimbursement program•Holiday

Love/Belongingness

•Career security•Medical policySafety•Base payPhysiological

Theory of Needs & MotivationHerzberg 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

• Achievement• Recognition• Work Itself• Responsibility• Promotion• Growth

• 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

Hygiene Factors Reward Program

Pay and Benefits Base pay

Company Policy and Administration

Medical reimbursement program

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

Theory of Needs & Motivation

Problem Solving

How are market-based net profits derived?

Problem Solving

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-marketing/

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

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