Assume we’re going to use a base amount with a cap for payout. Each host will have a cumulative gross theoretical goal and a couple of metrics-based objectives. We’ll issue partial payment for partial achievement, and metrics can be paid even if the host doesn’t achieve the theoretical target. We will also have a team theo goal. The individual theoretical goal is also subject to a superbonus payout up to the cap. We want the goals to be achievable but a bit of a stretch so the team has to work at them but won’t feel as though they cannot accomplish them. These will be quarterly goals, so they’ll be for a 13-week period.
Breaking down how the achievements will be paid is our first task. We decided to use a base amount with a cap instead of going with a salary-based bonus. Either way, you should start by determining how the bonus will be broken down into components for payment. The financial goals should be worth the most, so let’s go with 50% payout for achieving individual theoretical. The team goal should be worth 10% in this scenario, so that leaves 40% to be split among the strategic objectives. To make the math easier, let’s go with 2 of those for this exercise.
We decided we’d pay for partial achievement and that metrics will be paid even if theo isn’t reached. So we need to work out those details too. Reaching 95% of individual theoretical triggers a payout of half the amount available for that goal. If the host barely surpasses his theoretical goal, the full bonus will be paid, and super bonus is paid out to a host who achieves 120% of his theoretical target. These rules do not apply to the team bonus. It is either achieved or not and is not subject to a super bonus. Setting the same kinds of rules for metrics will follow once we’ve determined what they will be.
Let’s tackle the theoretical goals. We will use the 3.5% increase I mentioned above as one of our growth measurements. Assume each host has a list worth $200,000. (Let’s assume Sandy Palace Casino has 5 hosts.) With host attention, these guests should play more than the average unhosted player, so add in 1.5% for a stretch. That means each host’s goal is $200,000 + 5%, or $210,000. That means the team theoretical goal will be $1,050,000.
It’s time now for the strategic objectives. Since most casino hosts tend naturally to focus on maintenance, let’s build these objectives to reflect an acquisition goal and a reactivation goal. While it’s tempting to add layers to these objectives, it’s best to keep them simple. For example, instead of making the acquisition goal something like “sign up 45 new players in the quarter and bring back 15 with minimum ADT of $200 or actual of $300” it’s much simpler to use either the first half or the second half as a standalone goal. If you are setting goals for a new property and you need the team to focus on building your database, the first half is the way to go. If you are in an established market with a fairly large database, use the second half to encourage the hosts to make contact with players who appear to have the potential to spend more. We’ll use the second half as our acquisition goal. Then we’ll establish the reactivation goal accordingly and require the host to bring back 15 players who haven’t made a visit in more than 90 days with the same numbers above. Half the bonus will be paid if the host brings in 1 new player and reactivates 1 per week on average, so they’ll be paid half the available bonus for 13.
Here’s what the host’s goals look like:
Theoretical target: $210,000
Team theoretical target: $1,050,000
Acquisition goal: 15 new players make a return visit with ADT>$200 or actual>$300
Reactivation goal: 15 players return after 90+ days with ADT>$200 or actual>$300
Now that we’ve put together some goals and basic structure, what do we do?
Accountability. That’s what.