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 customer 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 do not affect customer 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 customer 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 re-evaluate 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 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.
 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.
• 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 analyse 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 customer satisfaction, as a result, employee
would reward for improving customer service.
Satisfied employees tend to provide high quality service, and it would result in satisfied
costumer and finally brings customer loyalty. Has Winn stated: “I can’t 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 was 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.
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 Sartre 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.
Itis 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.