A Wise Choice: Caesars’ Bet on Employees Pays Off

Consumers in today’s market have a virtual buffet of choices. Whether it’s deciding on the hotel chain for a family vacation or the source for today’s morning coffee, the options are endless. Often, the choice is made based on a positive past experience. For your next caffeine fix, are you going to head to the corner coffee house, where the barista spilled a latte all over your laptop? Or will you choose the extra whip and a warm smile at the java joint down the street?

As one of the world’s largest hospitality and entertainment corporations, Caesars Entertainment Corporation knows how easy it is for customers to switch to a competitor. They also know the key to creating loyal customers, and it’s rooted inside the organization itself. Each positive experience at one of Caesars’ properties leads to more frequent visits and the increased likelihood customers will spend more money with each visit.

Providing exceptional customer service is at the core of Caesars’ business plan. Caesars CEO Gary Loveman believes that keeping frontline employees motivated and engaged is critical to retaining customers and better yet, encouraging them to visit again and again. This philosophy, coupled with a highly competitive landscape and tough economic times, prompted Caesars to look closely at how it recognized employees for excellent customer service as well as other key behaviors. Loveman is commited to sharing operational success with employees.

Cash vs. Non-Cash

For nearly a decade, Caesars’ internal employee recognition program focused on a cash-based reward system. Over time, rewards were getting confused with regular compensation and employees were beginning to see the cash-only program as more of an entitlement and less of a reward. The connection to employee performance – and ultimately customer service – was fading.

A recent Maritz study, conducted in 2010, validates the weaknesses of a cash-only program. While cash is the most offered reward for most recognition programs, the study finds that people receive more encouragement—from managers, coworkers, family and friends—to earn rewards like group travel, experiences and award points. Study participants said experiential rewards were more memorable than earning cash.

They also said they were less likely to share their success with others, by talking about their rewards, if they earned cash. In addition, two of every five survey participants said they use cash rewards for bills or other necessities, like gas and groceries. The cash becomes an add-on to existing salary for living needs, instead of providing a memorable, rewarding experience.

Teaming up with Maritz, Caesars restructured its internal recognition program and switched to a non-cash reward system that stretches across the company. Referred to as the Total Return program, the new initiative empowers employees and motivates them to perform. While employees work toward improving the customer experience, they earn credits in a variety of ways, including customer service surveys, safety, customer compliments, and community service. Total Return engages 60,000 employees across Caesars’ 40 properties, wrapping up corporate goals, property goals and employee desires into one unified rewards program.

Not only is the program saving dollars, it is also contributing to the most important business goal: excellent customer service. Customer service rankings are up more than four percent in the first year of the Total Return program, a testament to the program’s holistic approach.

Total Return was developed strategically, keeping in mind the factors influencing human behavior. Caesars’ experience is that, instead of using cash incentives to pay a credit card bill or buy groceries, employees are using their Total Return points to purchase items more meaningful to them and others. Some employees discovered ways to involve their family, friends and coworkers in celebrating success in the workplace.

For example, a Caesars cashier at Horseshoe Southern Indiana used her credits to purchase a special gift for her teammate, who had just returned to work after a tough battle with cancer. The cashier was shopping on the Total Return site when she saw a cancer awareness watch.

“I immediately thought of my colleague and ordered it,” said the cashier. At a pre-shift meeting, she presented the watch as a surprise gift to her friend, who was overwhelmed with the kindness and thoughtfulness of the gesture.

Another Caesars employee, a valet attendant at Harrah’s Joliet, used her rewards to put a smile on her three-year-old son’s face. “It’s hard being a single parent,” said the valet. “I wanted to

surprise my son with something special. So, when I learned about Total Return and how it works, I checked my account to see how many credits I had earned. I had enough for a bike … he loves it!”

Why is the Caesars employee recognition program such a success? In essence, it’s hitting on key human motivators— the things that make people tick.

Driving Performance

Caesars’ revamped employee recognition program gives managers the ability to recognize desired behaviors that align with and support the business’ ultimate goals and values – excellent customer service. In the months following implementation, customer service rankings improved by 4.7 percent and continue to trend upward. The level of employee engagement in the Total Return program and resulting behaviors reflect four biological drivers that influence human behavior. Paul Lawrence, professor of Organizational Behavior Emeritus, Harvard Business School and Nitin Nohria, dean of Harvard Business School write about these drives, which they refer to as the four drive theory, in their book, “Driven: How Human Nature Shapes Our Choices.”

Knowing the key to happy customers is engaged employees, Maritz worked with Caesars to incorporate the four drive theory into Caesars’ Total Return program:

The Drive to Acquire Stuff & Status

Caesars employees are amassing reward credits at record rates and acquiring personal and luxury items they wouldn’t typically buy for themselves, including trips, iPhones, cameras and handbags. By sharing rewards with family and friends, they are increasing their status in the eyes of their peers. And, as a tiered system (levels include diamond, platinum and gold), teams are working together and aspiring to reach the next tier and higher status.

The Drive to Bond

The program is revealing a front-line team that is hardworking and generous as they use their rewards to make someone else’s life brighter. The stories of the two Caesars employees are just two examples of how Caesars’ people are reaching out to help others.

“The Total Return program has connected our team in ways we never imagined. As the months go by, it is heartening to see employees discovering all sorts of ways to enjoy the fruits of their labors,” said Terry Byrnes, vice president of Total Service for Caesars Entertainment.

The Drive to Create

Caesars’ Total Return program is anchored with a focus on connecting achievement with individual passions and pursuits. People desire to creatively contribute to something bigger than themselves. By creating a recognition program more meaningful for the employee, it satisfies the desire for purpose and meaning.

The Drive to Defend

The program is standardized, making it a fair and equitable motivator influencing human behavior. The earning rules are clear, and employees are willing to cooperate with one another to achieve larger customer service goals, which in turn build loyal relationships and foster teamwork.

Caesars had the flexibility to customize the program for employees, and localize content, programs and awards appealing to its global employee base. Today, quarterly customer service surveys allow everyone at each property to be rewarded with a baseline amount of credits for achieving team goals, while still leaving opportunities for individual, performance recognition. In little over a year, all of Caesars’ US locations have qualified for at least one quarterly reward.

Caesars’ vision was to create a new way to connect achievement at work with each individual’s passions and pursuits in life. By doing this, Caesars can continue to focus on its key business goal: excellent customer service. It’s what keeps customers coming back again and again.

Paula Godar is brand communications director at Maritz. Godar and her Maritz team are dedicated to designing and operating comprehensive recognition and incentive solutions for Fortune 500 companies.

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About Maritz Research

As one of the world's largest marketing research firms, Maritz Research, a unit of Maritz, helps many of today's most successful companies improve performance through an actionable understanding of their customers, employees, and channel partners. Founded in 1973, Maritz Research offers a range of strategic and tactical solutions concentrating primarily in the automotive, financial services, hospitality, telecommunications and technology and retail industries. The company has achieved ISO:2 0252 registration, the international symbol of quality. Maritz Research is a member of CASRO and official sponsor of the American Marketing Association.