Casino Enterprise Management

Does your performance management program reflect your company’s primary goals? Are you saving labor dollars with increased productivity, employee morale and creativity? Gaming is a fast-growing industry but with recent economic conditions, casinos have a greater focus on financial efficiency and competitive marketing. Incorporating the company’s vision and goals into your performance management program will lead to financial efficiency through labor savings and increased productivity, morale and employee creativity. An effective performance management program defines business critical goals, strategy, communication and evaluation to improve productivity and reduce costly behaviors that result from low morale. Move the focus from personnel issues, behavioral problems and increased absenteeism, and instead focus on a strong performance management program that measures employee performance, allowing everyone to focus on the business. A strategic plan will create a cohesive team environment that does not tolerate costly behaviors such as absenteeism. Make your competitors green with envy by providing employees with the tools necessary for success.

Business-Critical Goals
The process begins with defining business-critical goals and translating them into standards that build the foundation of a strong performance management program. Consider developing five or more business critical goals—such as profitability, sound financial practices, guest satisfaction, teamwork and workplace safety—as performance standards, providing employees with the opportunity to develop professionally and focus on meeting organizational expectations. Employees can achieve goals that are aligned with their job responsibilities in a uniform and consistent manner. In one case, a casino set the following business goals to improve profitability: EBIDTA for financial efficiency, overall guest service, service times, cleanliness of facility, and guest tracked play. Each department adopted these goals as daily operational and employee-specific goals so that employees understood how to contribute to the organization’s success. Defining business-critical goals starts the process, while a well-developed strategy determines reasonableness and methods for measuring goals.

Goal-Defining Strategy
Developing a strategy that defines the goal and determines its reasonableness and method for measurement is the next step in the process of managing performance. Let’s assume that teamwork is a business-critical goal for the organization, further defined as the ability to work well with and provide support for other employees. The goal is reasonable but requires a method for measurement. Because teamwork measures behavior, you need to define the behaviors that make up teamwork. Defining the behaviors removes subjectivity and builds strong and objective criteria for determining acceptable and unacceptable behavior based on the standard, as opposed to on an attitude or opinion. Using this critical goal, the department defined teamwork as employees slapping each other on the back during shift changes. Although it meets the basic definition of working well and providing support to other employees, it is unreasonable. The practice of slapping each other on the back is unreasonable because it could result in injury or horseplay. However, adjusting the goal so that employees are required to smile and greet each other during shift changes is a reasonable goal. This is one example of many behaviors that define teamwork.

A reasonable goal should have five or more observable behaviors or actions per evaluation that are specific to the department or employee. Each position has a specific purpose and requires standards aligned to the position to ensure success. For example, there are differences in roles and responsibilities for a security officer versus a maintenance porter. Although it is important that both employees maintain good attendance and appearance standards, it is not as important that a security officer ensures cleanliness of the facility or that a porter ensures the safety of all guests. Observable behaviors in the cage department for teamwork, for example, may include (1) workstation clean and stocked at shift change; (2) smiling and greeting other employees; (3) assisting other employees when requested; (4) returning from breaks and lunches on time; and (5) refraining from spreading rumors or teasing other employees.

Once the observable behaviors are set, they need to be measured. If the issue is employee behavior, then determine a method for handling employee behavior issues, such as counseling, documenting or corrective action, and use this method to measure the behavior. Use existing programs that provide performance feedback, such as recognition, secret shoppers and guest comment cards, to measure behavior. Consider a program that shops and documents behavior, giving management the opportunity to “secret shop” its team and provide immediate feedback and recognition.

Use the evaluation process to measure performance by assuming that an evaluation is worth 100 percent, similar to a school grading system. The casino may determine that two instances of behavior that do not meet the teamwork goal results in a 5 percent reduction in the overall employee evaluation; three violations reduces the evaluation by 7.5 percent, and so on. Using this evaluation technique will identify problem areas or behavioral issues and directly impact the employee’s overall performance and annual merit raise. However, meeting the goal and receiving recognition should result in an increase to the overall score. The number of acceptable negative observations resulting in lower evaluation scores and positive observations that increase employee evaluation scores determine acceptable, unacceptable and exceptional performance. If properly documented and communicated in advance, employees will understand how to manage their behavior and how it impacts their annual evaluation. Each department has the same overall goal—teamwork—but may define that goal differently and it should be appropriately measured.

A standardized evaluation can provide the needed flexibility for customizing criteria to meet department and position responsibilities. In one case, a one-size-fits-all evaluation with multiple choice questions was implemented for all employees. The evaluation stated, “Employee has the ability to maintain an optimistic outlook and spirit.” When asked to define the criteria for “optimistic outlook and spirit,” different management had different ideas, some assuming spirit meant that the employee contributed artistically while others thought the employee needed to display a cheerleader-like attitude—jumping, smiling and laughing. If left undefined, “optimistic outlook” and the “spirit” may result in inconsistent standards based on each manager’s opinion and not the casino’s standard for behavior.

The casino used three ratings—Needs Development, Meets Standards and Exceeds Standards—to measure each goal. The rating is easily improved when the measurement criteria is defined. These ratings were not further defined, leaving it to a manager’s opinion and not the casino’s standard. Written objectively, the evaluation could have further defined “optimistic outlook” as greets guest with a smile, uses communication courtesies, and refrains from making negative comments and spreading rumors. Redefining the criteria ratings further improves the evaluation. For example: Exceeds Standards means two documented recognitions and zero negative observations or write ups; Meets Standards means no more than two negative observations or one write up; and Needs Development means three or more negative observations and/or more than one write up.

Given the varying definitions and interpretations that are unavoidable when a criteria is subjective, how will employees gain clear understanding of what is expected of them? An evaluation that defines goals and how to achieve those goals removes the guesswork from performance management. Employees choose their own score by behaving in accordance with the documented criteria. A department test pilot of an objective evaluation based on organizational goals resulted in increased productivity and significantly less absenteeism and personnel issues. Goals were set with specific measurements and communicated to employees in advance of the evaluation period. The effectiveness of the objective evaluation system was validated when a cage cashier who was receiving her annual performance review commented that going into the last month of the evaluation year, she knew her score would be 90 percent or greater if she was not absent from work an additional day. When management asked how she pre-determined her annual rating, the cage cashier referred to the documented criteria and her quarterly progress reports. The employee aimed to achieve an “Exceptional Performance” rating, and she knew exactly how to get it.
 
Performance Communication
The employee that tracked her performance and received an “Exceptional Performance” rating was only able to do so with advance communication from her managers. Communicate the evaluation details to employees during one-on-one meetings may not always be practical, but try keeping meeting sizes small. You will have the opportunity to hear employee perspectives and opinions about the evaluation and performance management program. It’s a great time to show employees exactly how they can measure their own performance. 

Set the expectations through communication and follow up with mid-level management and front-line employees, listening to concerns and responding timely. Employees often have strong opinions and several questions about changes, but the focus should remain on the critical goal. Mid-level managers may require coaching for conversations that involve individual complaints and resolution. Listen for suggestions to improve broken processes or minor issues that aggravate the goal achievement and performance management process. Improving a process is inexpensive and communicates the importance of the employee’s job. 

The communication process includes each employee’s role, responsibility and contribution to the company. Potential pitfalls and concerns should be identified in advance so that the team can develop communication plans and resolution. The team can focus on the goals and employees instead of problems and concerns. In one case, the cage and slots leadership teams met to brainstorm about changing the performance evaluation process to include players club sign-ups. The goal was to implement a sales goal for slot and cage cashiers to solicit sign-ups as a way to increase tracked play and guest loyalty. The leadership team discussed issues related to tracking sign-ups, the number of sign-ups, quarterly and annual evaluation calculations for sign-ups, and the strategy for department-wide execution. There were two primary concerns that required resolution prior to making the change in performance evaluation. The first concern was determining the appropriate number of sign-ups for different positions and shifts, and the second was the communication plan, as this was the first time either department was held accountable for selling the players club and it would affect their pay. The leadership team resolved the concerns by setting reasonable and achievable goals and extensive communication prior to implementation.

Performance Evaluation Tools
The evaluation document sets the expectation and measures and memorializes performance against the communicated standard. Evaluations measure performance for a specific period of time, typically one year. Simplicity, easy navigation, an easy-to-understand scoring system, and straight-forward criteria are essential in an evaluation. You don’t need a lengthy evaluation to get your point across. A standard form with clear and consistent criteria and a simple grading system is a great way to document standards and evaluate performance. Each section should include a small area for comments and recommendations to improve performance or to highlight accomplishments associated with that section. A good evaluation can be crafted in less than six pages: a cover page, two or three pages to outline up to seven criteria for performance, and one page that includes the final score, signatures and employee comments. For example, the cage may outline appearance, safety, attendance, variances, other corrective action, guest relations and teamwork as criteria on the annual evaluation, breaking down performance to monthly or quarterly measurements and aggregating the information to provide a comprehensive picture of overall performance. The monthly or quarterly evaluation must measure the same expectations as the annual evaluation to tie scores into the annual evaluation. Divide the expectations and standards for the annual evaluation into quarters or months and determine the best method for measuring the standards. For example, if attendance is an issue that requires special attention, you may set a range of absences that are acceptable and tie that range to a particular score or percentage of the overall evaluation.

Providing constructive feedback quarterly or monthly, versus annually, can improve guest service and employee performance. It is easier to manage employee performance through constructive feedback, incentives and recognition than it is to threaten, ignore or punish an employee for an error. It may not seem easier at the time, but given the choice to improve guest service and reduce errors increases the chances of an employee understanding the standard and their performance. Punishing, threatening or ignoring the problem does not provide an opportunity for employees to correct their behavior. Instead, it scares employees into doing what’s expected out of fear and leads in a lack of respect for the leadership, organizational standards and overall view of the guest experience. In one instance, a guest approached two employees to request help with a game. The employees continued their conversation with each other while the guest waited for assistance. A supervisor noticed the employees’ behavior towards the guest but instead of addressing the issue with the employees or advising the department manager, the supervisor ignored the behavior. As a result, the employees continued the behavior while receiving good marks on their evaluations. When the employees’ behavior was finally addressed, it became a challenge to support corrective action or coach them, based on the positive feedback from their evaluation. The focus for improving employee performance is constructive feedback, supporting organizational goals and improving employee performance instead of ignoring poor performance.

A performance management program is fluid and changes as critical goals are further defined in the organization. Similar to the annual budgeting process, goals are defined and documented annually. Performance management planning should be included as part of the goal and budget planning process to ensure the success of annual goals. The goal in this economy, for many casinos, is to remain financially safe and competitive in the market. Incorporating the company’s vision and goals into the performance management program annually will result in financial efficiencies throughout the year. The performance management program guides employees toward financial efficiencies through increased productivity, decreased turnover and enhanced guest service. If goals are well defined, reasonable and measurable, and allow employees to succeed, with each success, the company will meet its goal of financial efficiency, savings and security in a challenging economy.

Mindy Letourneau is the Cash Services Director for Viejas Casino. She is also the founder and owner of Casino Essentials, which focuses on maximizing profitability through professional development, operational efficiencies and labor strategies. She can be reached at (858) 610-5053 or mindy@casinoessentials.com.