Harrah’s Entertainment Inc. February 7, 2011

The goal of introducing the Gainsharing program was to increase employee motivation so they provide outstanding customer service. The differentiating factor in regaining and keeping bigger market share was through customer satisfaction.
The Gainsharing program was effective in increasing both customer satisfaction and employee loyalty. Turnover went down from 70% to 50% in one year. It also proved to be an effective motivator to the food and beverage department of Harrah’s Las Vegas. Another great feature of this program was that it wasn’t tied to the financial performance of the company and the payout would be paid regardless of operating income results.
Despite its positive features, the program had some drawbacks. The objectives that needed to be achieved in order to receive the gainsharing program’s bonus were not properly fine tuned. This led to situations where teams at most properties had missed their payout just by a small margin, leading to a feeling of let down. Also, the profits were not where they should be and the economy was dragging. Most employees were thankful to have jobs let alone bonus pay outs. The feature of getting a pay out regardless of financial performance was proving to be disadvantageous to the company. The incentive plan had cost $16 million in the previous year, and that felt like an especially big number now that revenues were dropping off because of broader economic conditions. Lastly, employees were getting tired of trying to achieve performance goals and then missing them by a small margin.

I feel that the Gainsharing program should not be eliminated completely since it did foster a team building spirit by focusing on the functional team’s success. It also proved to be a helpful tool in instilling a competitive spirit in the employees and increasing customer