I tip based on what I believe they "earned". I am not of the opinion a tip is mandatory and is discretionary spending by the customer. So if I get average service, I'll give an average tip of around 20%; exceptional service 25% or up; below expectations 15%; extremely poor service will be no tip and a discussion with management.
I don't tip to teach a lesson.
Why do you feel a server should be tipped at the same level no matter what the quality of the service?
If that last question was addressed to me, I actually don't. I just 1) have never received such bad service that I seriously considered a lesser tip, 2) can't usually be bothered to do the math if I'm only slightly put off by the service, and 3) I don't always know if my "below expectations" experience was the fault of the server or someone else. Was my food late because the kitchen was slow or because the server didn't pick it up? If they didn't pick it up, was it because they were lazy or because they were slammed? If you can be impartial enough to say "late and cold food is late and cold food," and dock the tip accordingly, then more power to you - I am not comfortable giving a server less then they deserve if my dissatisfaction was not their fault. I will admit to being a lazy tipper. Unless I was thoroughly disappointed and no effort was made to rectify my feelings, I am reasonably content with my dining experience and am happy to give servers their tip. I tip with gratitude and I tip with empathy, because serving seems like an unenviable job.
I appreciate your system - it is very clear and concise. I think the only difficulty I would have is deciding what behavior on behalf of the server made the service "average," "exceptional," etc. Everyone has their own expectations, which may even vary from situation to situation.
A culinary group I belong too (who have a number of members in the restaurant industry) had a similar discussion a few nights ago at a restaurant. We were comparing the quality of the service we receive in our city from waitstaff as compared to what we've received in other cities or countries and even our expectations on quality of service based on type/cuisine of a restaurant. We came to the concensus that the quality of service at many restaurants has declined because few people do really analyze why their service was above par or below and "if reasonably content willing to give servers their tip". In our group we all agree that it is not "the server's tip". It is the diner's money that the server needs to earn and only then becomes their tip. And we all agreed that there are some basic expectations we have.
At a chain fast casual restaurant like an Applebee's our expectation to get the standard tip is acknowledge I exist within 2 to 5 minutes of being seated with a smile, take and deliver my drink order correctly, take and deliver my meal as ordered, after delivering my meal stop back by within 2 to 5 min, make sure drinks are refilled when meal is dropped off, notice when we have completed eating, ask if we'd like the check and make sure our table is cleared in a timely manner. Do those basics and you'll get your 20%. If after 5 minutes the server hasn't even said in passing "I'll be with you in a minute", never comes to check to see if drinks are refilled or the meal was as ordered, or even forgets to put in your order for an appetizer, or seems to disappear for 30 minutes while you're trying to get your check, then the tip starts going down.
At a mid range restaurant expectations are a little higher. We expect to hear about specials, for the server to know the ingredients in and the price of the specials, able to recommend items on the menu based on your tastes, have some knowledge of the wine list and beer selections, stop by more frequently to check on your table but with the skills to do it without being intrussive, and have the skills to keep an eye on his/her assigned tables and realize when someone is trying to get their attention without verbalizing or aggressively waiving them down. Courses should be timed well and if the kitchen is backed up, the waitstaff should know it and communicate the delays to you, "The kitchen is a little backed up, would you like me to bring out your salad course first and then your appetizer?" And if a menu item is sold out, they should be aware of that when you are ordering unless it truly did just become unavailable.
At a high end restaurant the skills of the entire staff are part of what you are paying for with the higher prices. We expect an increased level of service that enhances and in no way degredates the overall dining experience.