Harrah Case Summary

I believe that there are two core problems with this case. The first problem was that the incentive plan was a continuous program; the other issue was that this improvement program was independent of Harrah's operating income.
The incentive plan required a 4% increase of service throughout their customers which created a more competitive environment throughout the employees to earn bonuses. Harrahs rewarded their employees to a $200 payout if they met quarterly satisfaction goals regardless of the financial performance of Harrahs. Since the plan was continuous, the improvement levels kept rising and employees started getting tired of the work becoming harder and harder to meet those needs. Revisions to this incentive plan could possibly be opting out of the continuous plan and set a high target customer satisfaction rating. By meeting the target satisfaction, bonuses could increase on how long an employee maintains a certain customer rating. Creating a survey of available valences for the employees of Harrahs could also help motivation knowing that the managers care for their employees by investing in them just as …show more content…
With economic conditions worsening and revenues decreasing it is not effective to have an incentive plan independent of Harrah's operating income. If their customer satisfaction is not resulting in customer retention than it would be hard to generate a revenue for the casino. Without this revenue, there would be a smaller investment to pay back the employees if the requirement for customer rating was met. A recommendation for Winn would integrate the incentive plan and the operating income. This would allow for better financial security for the company and allow employees to still earn their incentive reward. Although the downside to this idea would include a decrease in reward amount if the market conditions worsen depending on the quarter of the