Harrah's Entertainment

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Harrah’s Entertainment
Nick Kaldunski

Harrah’s gain-sharing program brought about major changes to the culture and focus of the employees. It created an environment of competition amongst divisions and helped pull the focus more towards customer enjoyment rather than straight P&L. Due to the highly regulated environment of the gaming industry, to employees, bad customer service and little contact was preferable to too much interaction and losing their job. The new program got everyone on the same page, focusing on service and market share, increasing Harrah’s competitiveness in the industry. The focus on service created a focal point for employees. It created a sense of pride within divisions; each strove to become the best in their given location. Another major strength of the program is that it decreased employee turnover. Harrah’s St. Louis reported that in one year, turnover dropped from 70% to under 50%. The new program also had its drawbacks. After a few years the program seemed to stall. The program provided the correct incentive but not enough motivation. Upper management found that employees weren’t striving to be the best, but merely good enough. It became clear that the employees needed continued motivation on top of the provided incentives.

Harrah’s program seems to support the assertions of Frederick Herzberg. His two factor model discusses what is necessary to motivate versus what is necessary for satisfaction. The Harrah case shows that while the program addressed hygiene factors, thus keeping employees satisfied, it did not do enough to fully motivate the workforce. This brings up the difference between incentive and motivation. In its purest sense, incentives are merely disguised manipulation. Providing these incentives contingent on an act or behavior only works as long as the rewards continue, they do not motivate, merely promote compliance. If I were to give advice in the Harrah’s case, I would recommend that the company focus less...
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