Strengths and Weaknesses of Harrah’s gain-sharing Program
Harrah’s strategy was to shift from service-driven company to a customer-driven company, and it invested in people development and bonus rewards. Company has introduced a gain-sharing program where employees were rewarded for improving customer service.
This program has required employees to have more interacts with customer such as hand shake “employees can lose their jobs for not interacting with customers in the regulated manner”, Loveman, the new COO of Harrah has said. Employees were rewarded for percentages of improvement in customer service scores within the department and within the property, collected through the Targeted Player Satisfaction Survey. The great thing about this program was that it was not tied up to the financial report, “if you improve service, irrespective of financial performance, you will still get rewarded” (6, Case). As the result, by mid-2001, Harrah’s has paid out more than $16 million in bonuses to non-management employees through the gain-sharing program. More employees were participated in the program, and this could be a real differentiating factor in regaining and keeping bigger market share.
The gain-sharing program pay plan was an effective motivator, employees of each Harrah’s location viewed this program differently, one can view this program to benefit them to motivate his food and beverage employees, others may view it as symbolic confirmation of the company’s goals. This program has not only increased customer satisfaction, but also successfully retained employees’ loyalty. As the result, company saw turnover go down from 70% to under 50% in one year, and employee set his own standard achievement “The two things I want to achieve this year are best in brand scores and breaking 99 seconds on how fast our employees get to our customers when called” (7, Case)....