Magazine article Workforce Management

Casino Spreads Dealers' Wealth to Supervisors

Magazine article Workforce Management

Casino Spreads Dealers' Wealth to Supervisors

Article excerpt

PAY EQUITY

Las Vegas gaming mogul Steve Wynn has broken a longstanding tradition by allowing casino floor supervisors to get a cut of the tips earned by card dealers at his $2.7 billion resort-casino Wynn Las Vegas.

Tips normally go to hourly employees, such as dealers, who rely on the money to supplement their base pay, which often is minimum wage, says David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.

The rules changed September 1, and the switch was necessary because the old model hampered employee development, says Andrew Pascal, president of Wynn Resorts in Las Vegas.

"The system is broken and has to be fixed," Pascal says. Dealers have more earning potential than supervisors do. Tips, which account for about 85 percent of total pay, raise their income to an annual average of $ 101,000, Pascal says. Supervisors have a base salary of $60,000 and ordinarily don't receive tips.

The disparity in compensation makes it difficult for Wynn Resorts, the parent company of Wynn Las Vegas and the recently opened Wynn Macau resort-casino, to fill supervisory positions.

"We had a situation where dealers wanted to stay in their positions and certain supervisors wanted to become dealers," Pascal says. "The model is not conducive to leadership development."

Pascal says that by making the changes now, the company hopes to start fresh with future projects like Wynn Encore, which is scheduled to open in Las Vegas in 2008.

After several months of analysis, the company decided to move ahead with a new compensation structure in which supervisors' base salary will climb to $65,000 and they'll take a cut-from 2 percent to 4 percent-of the dealers' tip pool. Combining salary and tips could translate to annual pay of $96,000 for supervisors.

Sharing gratuities with supervisors will reduce dealers' pay by $4,000 to $10,000 annually, with projected yearly salaries around $90,000 to $96,000.

Instances in which subordinates earn more than their supervisors are not uncommon, particularly in sales, where lucrative commissions can fatten base salaries. It can, however, lead to what compensation experts refer to as perceived internal inequity, a dynamic in which certain employees think there is an unfair imbalance in a company's compensation structure.

The scenario often is a byproduct of external market factors and not necessarily a deliberate move by management, says David Cichelli, senior vice president of the Alexander Group in Irvine, California. Recent MBA graduates often are hired at higher salaries than more senior employees because market forces have driven up wages. …

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