Essay on Harrah's Corp: Loveman's Incentive Plan for Employee Motivation

The case study is on Harrah's Entertainment Corporation about Loveman's incentive plan of rewarding the corporation's employees as a secondary motivation. Gary Loveman is the Chief Operating Officer as well as the president of the Harrah's Corporation while Marilyn Winn is the head of Human Resource and one who helped Loveman in implementing the plan in the organization. Harrah's Corporation began shaping its new operation strategy in 1997 which helped in distinguishing it from its competitors as well as its past. It began by building new properties a strategy that did not last for long since it helped in making improvements for a year than later in the second year it was plateaued hence, as a result, the corporate moved from being a company that was product-based to being a marketing-based company.

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The company hired new marketing executives who brought their expertise in the database marketing from the academic industry as well as other industries. The plan did not move quite better until in 1999 when Phil Satre, the Chief Executive Officer and Chairman of Harrah's Corporate hired Loveman as the chief marketing officer as well as the chief operating officer making everyone else within the organization to respond to him in the following through of the new marketing strategy. He was given the responsibility mainly because, initially when he was a professor at Harvard Business School in the service management, he conducted on-site executive education courses for the corporation hence he was very aware of Harrah's business.

Satre began working in Harrah's in the 1970s where he worked as an outside counsel to the corporation a period when the helm of the company was Bill Harrah. During Bill's time, the company was able to retain staffs and recruit executives. His time also helped the company in negotiations with state and local-elected public officers as well as regulators. When Satre took over things changed and when he looked at the management that he was heading, he saw as if they only represented management and not leadership and so after moving the headquarters in 1999 from Memphis to Las Vegas he had to look for a new Human Resource leader.

Satre needed an individual who clearly understood the business strategy as well as the operations and an individual who was willing to get their hands dirty as they spent time at the casino sites. The individual that Satre hired was Winn who took some time to accept the offer since most of the operation officers did not like working at the headquarters and more specifically at the Human Resource department. They believed that the transparency at the headquarters is limited and there were more politics exercised there.

When win came in and was now the leader of Human Resource, she came up with a plan that focused on the tenure of the people of Harrah a plan that worked in a way despite it not having clear proof of quality reporting on turnover, there were no breakouts that showed how varying areas were affected also there was no data on the average tenure but the turnover rates were estimated to be over 70%. Loveman and Winn then set a goal of making a 15% improvement and this meant that they planned to bring down the average turnover of the previous year from 45% to below 38.5% by the end of 1999.

Indeed they achieved their goal and brought down the average turnover to 34% and this was a success as a result of their focus on finding the right people for the job, the socialization process in bring in new employees into the company as well as the long-term maintenance of motivating employees as well as their performance. On motivating the employees through the reward plan, it worked but by mid-2001, the bonuses that had been paid out in terms of bonuses through the gain-sharing program to non-management employees added up to $16 million a sum that seemed so high first in consideration of the dropping revenues of the company due to broader economic conditions.

It reached to a point where Loveman and Winn have to sit down and decide on the way forward since the employees need to be motivated while at the same time the company had to remain a customer-driven as well as a service-driven company. To fix the situation I would first ensure that I have made known to all employees on the current trend in the economic conditions and how they are affecting the company's output and with that, I would also encourage for the reduction of the amount awarded in the gain-sharing program. The reduction will be conducted in such a way that there is the balance in the goal of the organization of remaining a customer-driven and service-driven company, meeting all the needs of the employees including their motivation and enabling the company to make revenues and grow.