Michael: This was an interesting and thoughtful approach to the case analysis. You took a more academic approach than your peers. Overall you were able to weave the readings together with the applicable case details to create an insightful analysis. Grade: Check plus

Michael Ahern
Leadership in Organizations
Harrah’s Entertainment: Rewarding Our People

Harrah’s Entertainment Inc. form of entertainment is distinct from other traditional forms of entertainment like live theater, music, and sport, recorded film and television, or even video games. Harrah’s entertained its clients directly with its employees. Employees directly engaging the customer man the black jack, roulette, and poker tables. Wait and hotel staff directly engages the customer. The only significant revenue stream without direct employee engagement is the slot machines. Harrah’s customers’ human contact with its employees is Harrah’s primary product even more than the gambling, food, and hotel service. In this paper I will argue that Harrah’s should use the same or similar customer relationship management techniques to manage employee relationships as it does to manage customer relationships. More specifically customers are engaged with a great experience and that is what will motivate employees.

Marilyn Winn had experimented with customer service metrics as a means to motivate employees. The trouble with that incentive system was that it is demotivating to place an unattained carrot in front of people. As an example in “August 2001, customer service metrics had increased positively but not to levels that merited a payout at most properties.” Winn was correct to worry that at some point the employees would say, “Forget it!”

In contrast to customer service employee metrics, for customer relationship management Harrah’s developed the “Total Rewards Program…to gather information and understand customer preferences so they could tailor the most appropriate marketing strategies and monitor and improve customer loyalty.” Harrah’s had made no attempt to understand employee preferences and did not monitor or improve employee loyalty.

Herzberg argues in One More Time that employee incentive programs like the customer service metrics are “myths of motivation.” He believes that only when the employee has a “generator…we can talk about motivation.” Herzberg believes that “rising wages don’t or won’t do the job.” And her further states that “unless the ante is continuously raised” the employees will eventually become demotivated. Ultimate Herzberg argues that a KITA strategy “results only in short-term movement” and the “cost of these programs will increase steadily.”

The answer to employee motivation is similar to the customer marketing campaign. It’s about understanding employee preferences and monitoring loyalty. Herzberg discusses basic human needs and that we have a “set of needs [that] relates to that unique characteristic, the ability to achieve and, through achievement, to experience psychological growth.” Herzberg cites studies that elevate “intrinsic motivators” like achievement, recognition, and responsibility as drivers of employee loyalty. And that describe general work “hygiene factors” like company policy,