Harrah's gain-sharing program had strengths in promoting competitive spirit and customer service improvements among employees by rewarding hard work. However, it also had weaknesses such as becoming more difficult to raise service levels for payouts. Additionally, operating income results did not factor into customer satisfaction goals. The memo recommends evaluating the program to better align rewards with company performance and solicit employee feedback to understand motivators. Harrah's aligned human resources with its strategy through recruiting qualified candidates, onboarding processes to reduce turnover, and the gain-sharing program to reward customer service and maintain employee motivation, though long term benefits of the program remained uncertain.

1. Name Lucia Veronica Denis Senwayo Student
Number
2B4047
Case Name Harrah’s Entertainment, Inc:
Rewarding our people
Date 2014.11.10
Memo
1. 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

2. levels that merited a payout at most properties.
Another weakness is that Operating income results do 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.
2. 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.

3.  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 do 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.
3. How has Harrah’s aligned its human resource practices with its strategy?
How well (or not) do 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.

4.  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.