Harrah's Entertainment, Inc. Rewarding Our People Case Solution

1. What are the strengths and weaknesses of Harrah’s gainsharing program?

The gain-sharing program instilled a mindset among its employees to be competitive because of which the customer service quality was improved. The employees began to realize that they had a stake in customer services and its improvement meant benefits for them. It incentivized employees who worked hard. Apart from that, the managers were accountable for their teams and were rewarded based on several factors such as customer satisfaction, and increase in profitability figures, and market share gain. This made the managers working towards the success of the customer reward program at Harrah.

The weaknesses, however, were that the effectiveness of the program was not as it was expected. The level of customer satisfaction expected to be obtained was not achieved. The level of expectations was being increased by the management. However, the employees were not able to meet the targets, and it was implicitly stated that the employees were unable to meet the targets. Several employees did not receive the incentives because they failed to achieve the ever-increasing targets. They were also de-motivated due to this sense of underachievement despite their long working hours and hard work to achieve the targets. One other weakness was that there was no integration of the gain-sharing program and the operating income. It means that the company’s earnings should be related to such a strategic program. If the increase in customer service levels did not increase the operating profit of the company, it meant that it was not credible enough.

2. What advice would you have for Winn about her recommendation to Loveman?

The advice for Ms. Winn is that she should reassess the gain-sharing program that was developed to motivate the employees to improve customer satisfaction. Improving customer satisfaction was the company’s strategic plan to gain market share and improve profitability figures for the company. It is suggested that the incentive plan be connected to the operating income of the company to increase its credibility and let the employees realize the impact that their hard work is on the company. By tying the gain-sharing program to the operating income, it can be stated as effective on the company monetarily.
Secondly, there should be a set target for the incentive program. These targets should not be increased momentarily. This will allow the employees to feel accomplished as they would be able to achieve targets and gain incentives.