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

Solution Id Length Case Author Case Publisher
1243 774 Words (3 Pages) Thomas J. DeLong, Vineeta Vijayaraghavan Harvard Business School : 403008
This solution includes: A Word File A Word File

Gary Loveman was hired as a COO at Harrah’s Entertainment. When he first joined the company, he was faced with a major problem of employee turnover. The employees were not satisfied, and this put the company in a situation in which it was unable to implement strategic plans to increase the profitability of the company. Loveman introduced a highly organized HR policy of hiring and incentivizing employees. This included adopting a testing system to hire employees. The incentive system was based on the company strategy for improving customer satisfaction. The customer satisfaction targets were given to employees for whom they received a bonus. However, the increase in targets to improve customer satisfaction led to most employees failing to achieve targets. This left Harrah’s with de-motivated employees once again.

Following questions are answered in this case study solution

  1. What were the challenges facing Gary Loveman when he took charge?

  2. What were the key changes he undertook?

  3. What were the consequences for employees?

Case Analysis for Harrah's Entertainment, Inc. Rewarding Our People

1. What were the challenges facing Gary Loveman when he took charge?

When Gary Loveman first joined the company the major problem with Harrah’s was the lack of employee loyalty. The turnover was high, and the company’s strategy of improving customer service could not be achieved if the employee turnover were high. The company was focused on marketing and customer service to achieve great financial results. However, the newly appointed COO realized that the employees were the ones that had to be motivated in order to obtain the aims that the company had. The managers were working by the rule and did not have any incentive to work out-of-the-box for the benefit of the company. They were more managers than leaders and the company needed leaders to motivate the employees. With the low motivation levels among employees, the customer service targets were not being achieved, undermining the business and making the competitors stronger.

2. What were the key changes he undertook?

The first major change that Loveman undertook was the employee hiring basis. The change was that the COO shifted the focus of HR to hire the best person for the job improving hiring standards for the company. The change was in the recruitment process as well with the recruitment not being on the basis of evaluation in interviews but by testing instruments. These testing instruments included personality tests, critical thinking tests, and leadership tests. The HR was provided with an employee with a doctorate in psychometrics to evaluate employees based on the results and hire the best person. They also made the employee programs flexible to make them satisfied with their job and reduce turnover. This meant to allow them to shift their roles in the company if they were unhappy with one role. The evaluation of this satisfaction and capability assessment was organized. The first three months of the employee were included with skills tests HR interviews, job meetings, and expectation meetings. Other than that, employees were paid to attend training that improved their skills.

The other major change was the implementation of an incentive system. This system was an integration of the HR policies and aims of motivation, and the strategy of improving customer service.

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