Author Topic: No-Tipping Policy In Restaurant  (Read 10267 times)

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amylouky

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Re: No-Tipping Policy In Restaurant
« Reply #75 on: June 18, 2014, 12:36:56 PM »
Really, calling this a "no tipping" restaurant is false. What it really is, is an auto-tip restaurant. The server is guaranteed a 20% "tip" from each table, unless that wouldn't make them $10.00 per hour, in which case they're getting more than 20%. That's a pretty good deal for a server.. most I know are very happy with 20% tips. It would be interesting to figure out whether tips normally average out to above or below 20%.

The $10/20% will be added to the cost of food, so it's really just an enforced service charge, rather than an at-will tip. That's not to say I don't like the idea.. I would have loved it in my server days. I usually tip 20% anyway (and often more, if the boys have made a mess). I guess that would be my only problem, not having the option to reward servers that go above and beyond.

If we're going to start calling every sales-based payment method for restaurant employees a "tip," regardless of who pays it and why, then the definition of "tip" is going to get ridiculously broad. This a flat percentage paid by the employer as their employees wages and built into the price of the food. We already have a term for this type of pay: commission. "Service charge" is a little more vague, but still more fitting than "tip." Would anyone say that that, e.g., car salesmen are paid in "auto-tips" just because they receive commissions for their sales? Like other commission systems, the restaurant in the OP compensates the employees based on the sales they make without attempting to be a way to review the service. It's a different system from tipping (both the American expected-tip system and the tip-for-exceptional-service system). The only major commonality is that the OP commission system and the American tip system both depend on a percentage of the sales, but that's nothing exceptional, since a lot of sales commissions are percentage based.

Sorry, I meant it as in the auto-tip process that already exists. IE, in some restaurants they automatically add 18 or 20 percent to your bill for large parties (at least, in my area). To me, this is the same thing.. they're not doing away with the tip, they're just rolling it in to the total price. Commission would be okay too I guess, but I think of that more as a sales and marketing payment structure, rather than a service oriented profession.

lowspark

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Re: No-Tipping Policy In Restaurant
« Reply #76 on: June 18, 2014, 12:45:11 PM »
Since the 20% really is a commission for sales, is that better or worse than if we went to a system where servers were just paid a salary or wage per hour, with pay level based on performance?

I get that there are definitely certain types of sales positions where commission is preferred because you can make a lot more money that way. But I'm wondering if restaurant service falls into that category.

The current tipping system is an attempt at performance based pay, is it not? Theoretically, the better service the server provides, the better tips s/he will earn. If we go to a straight 20% of sales for all servers, that eliminates the performance aspect of it.

Onyx_TKD

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Re: No-Tipping Policy In Restaurant
« Reply #77 on: June 18, 2014, 02:06:16 PM »
Since the 20% really is a commission for sales, is that better or worse than if we went to a system where servers were just paid a salary or wage per hour, with pay level based on performance?

I get that there are definitely certain types of sales positions where commission is preferred because you can make a lot more money that way. But I'm wondering if restaurant service falls into that category.

The current tipping system is an attempt at performance based pay, is it not? Theoretically, the better service the server provides, the better tips s/he will earn. If we go to a straight 20% of sales for all servers, that eliminates the performance aspect of it.

From my perspective, if a server is giving poor service, the natural consequence would be to assign them to hours and sections of the restaurant where they will impact the fewest customers, not cut their pay. In a commission-based system like the OP restaurant, this would almost certainly have the side effect of lowering their pay as well. If someone is giving poor service, then lowering their pay doesn't do anything concrete to help the customers get better service. All it does is provide a nebulous motivation to "improve."* OTOH, Adjusting the shift assignments so customers are only stuck with the "bad" servers when there are no "good" servers available (i.e., during off hours, when the restaurant is really busy, etc.) does have a direct impact on service. And I would expect that being stuck with less desirable shifts (and the resulting reduced sales commissions) would provide motivation to improve just as well as a direct pay cut.

*Another issue with adjusting pay based on performance is that you would need a very objective measure of performance. Otherwise, an employee's wages would be at the whim of whoever assesses performance, and I think that would open the business up to some nasty legal battles. Sales is one possible measure, on the assumption that improved sales means the customers are getting prompt and efficient service that allows for high table turnover and/or happy enough to linger over additional courses/drinks, or agree to upsells suggested by the server. It's also a measure that is directly linked to the businesses profits. If you wanted to get away from the commission model, you'd need other objective performance measures, and I'm not sure what they would be.

Yvaine

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Re: No-Tipping Policy In Restaurant
« Reply #78 on: June 18, 2014, 02:10:39 PM »
Since the 20% really is a commission for sales, is that better or worse than if we went to a system where servers were just paid a salary or wage per hour, with pay level based on performance?

I get that there are definitely certain types of sales positions where commission is preferred because you can make a lot more money that way. But I'm wondering if restaurant service falls into that category.

The current tipping system is an attempt at performance based pay, is it not? Theoretically, the better service the server provides, the better tips s/he will earn. If we go to a straight 20% of sales for all servers, that eliminates the performance aspect of it.

It's an attempt, but by its very nature a flawed one. I think that over a long stretch of time, a good server will, statistically, end up making a decent amount in tips. But on the day-to-day level it can end up being affected by so many things. Some customers won't tip if they don't find the server physically attractive, won't tip if their kid throws a tantrum, never tip on principle and happened to be in that server's restaurant and section that day, won't tip just because they're in a bad mood, etc.

shhh its me

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Re: No-Tipping Policy In Restaurant
« Reply #79 on: June 18, 2014, 02:24:58 PM »
Really, calling this a "no tipping" restaurant is false. What it really is, is an auto-tip restaurant. The server is guaranteed a 20% "tip" from each table, unless that wouldn't make them $10.00 per hour, in which case they're getting more than 20%. That's a pretty good deal for a server.. most I know are very happy with 20% tips. It would be interesting to figure out whether tips normally average out to above or below 20%.

The $10/20% will be added to the cost of food, so it's really just an enforced service charge, rather than an at-will tip. That's not to say I don't like the idea.. I would have loved it in my server days. I usually tip 20% anyway (and often more, if the boys have made a mess). I guess that would be my only problem, not having the option to reward servers that go above and beyond.

If we're going to start calling every sales-based payment method for restaurant employees a "tip," regardless of who pays it and why, then the definition of "tip" is going to get ridiculously broad. This a flat percentage paid by the employer as their employees wages and built into the price of the food. We already have a term for this type of pay: commission. "Service charge" is a little more vague, but still more fitting than "tip." Would anyone say that that, e.g., car salesmen are paid in "auto-tips" just because they receive commissions for their sales? Like other commission systems, the restaurant in the OP compensates the employees based on the sales they make without attempting to be a way to review the service. It's a different system from tipping (both the American expected-tip system and the tip-for-exceptional-service system). The only major commonality is that the OP commission system and the American tip system both depend on a percentage of the sales, but that's nothing exceptional, since a lot of sales commissions are percentage based.

Really it would be like any business.  The business charges a price and pays wages as part of their costs.

the way tipping works now would be insane in any other industry.  I wouldn't want to be a phone CSR my pay was based on "if you liked your service pay 10 cents to the CSR buy credit card now.  Because we (the company) pay them $2.65 a hour." or a grocery store cashier.

My issue with tipping tips are now their wages, $2.65 is not a wage. This one group of people is subjected to customers being able to just not pay them for their work. When I've heard people describe why they left  "poor" tip its about 10 to 1 "I don't tip/It's not really mandatory/I only have enough money for the meal" VS "I received poor service" and about 3 of 4 of the "poor service" complaints are restaurant issues not waitstaff issues.

lowspark

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Re: No-Tipping Policy In Restaurant
« Reply #80 on: June 18, 2014, 02:27:53 PM »
Since the 20% really is a commission for sales, is that better or worse than if we went to a system where servers were just paid a salary or wage per hour, with pay level based on performance?

I get that there are definitely certain types of sales positions where commission is preferred because you can make a lot more money that way. But I'm wondering if restaurant service falls into that category.

The current tipping system is an attempt at performance based pay, is it not? Theoretically, the better service the server provides, the better tips s/he will earn. If we go to a straight 20% of sales for all servers, that eliminates the performance aspect of it.

From my perspective, if a server is giving poor service, the natural consequence would be to assign them to hours and sections of the restaurant where they will impact the fewest customers, not cut their pay. In a commission-based system like the OP restaurant, this would almost certainly have the side effect of lowering their pay as well. If someone is giving poor service, then lowering their pay doesn't do anything concrete to help the customers get better service. All it does is provide a nebulous motivation to "improve."* OTOH, Adjusting the shift assignments so customers are only stuck with the "bad" servers when there are no "good" servers available (i.e., during off hours, when the restaurant is really busy, etc.) does have a direct impact on service. And I would expect that being stuck with less desirable shifts (and the resulting reduced sales commissions) would provide motivation to improve just as well as a direct pay cut.

*Another issue with adjusting pay based on performance is that you would need a very objective measure of performance. Otherwise, an employee's wages would be at the whim of whoever assesses performance, and I think that would open the business up to some nasty legal battles. Sales is one possible measure, on the assumption that improved sales means the customers are getting prompt and efficient service that allows for high table turnover and/or happy enough to linger over additional courses/drinks, or agree to upsells suggested by the server. It's also a measure that is directly linked to the businesses profits. If you wanted to get away from the commission model, you'd need other objective performance measures, and I'm not sure what they would be.

I'm not saying their pay should be cut for bad performance, quite the opposite. In the performance-based pay model, good servers would get pay increases for good service. Bad servers would get coached on how they could improve and eventually get fired if their performance didn't improve.

At least, this is how it works at my job. I get periodic reviews and raises/bonuses if I'm doing well. People who aren't performing up to par get feedback on what needs improvement and eventually, if they don't improve, they are let go.

How objective is the measure of performance? Well, it's not. It's subjective. It's based on how my boss perceives my performance. I don't work in a situation where output can be measured, as in, how many widgets I produced and whether they met standards. Similarly for servers, it would be subjective -- based on the manager's observations on how well the server is meeting the customers' needs.

As far as "Adjusting the shift assignments so customers are only stuck with the "bad" servers when there are no "good" servers available (i.e., during off hours, when the restaurant is really busy, etc.)", aren't you in fact, punishing the customers who come during those off-hours, etc. by providing them with a server you know is "bad"? That doesn't seem like a good business practice to me.

Again, I'm not necessarily saying performance-based is the way to go vs. commission. I'm just wondering if commission is really the best compensation method for the restaurant model.

amylouky

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Re: No-Tipping Policy In Restaurant
« Reply #81 on: June 18, 2014, 02:48:48 PM »
I wouldn't work a server job if I just got a flat rate wage. There are times when a restaurant is naturally slow, and other times when it's absolutely slammed. I think the percentage of sales (with minimum hourly rate) is pretty good for the server, actually.. it rewards them with higher pay at busier times, but assures a decent minimum at slow times.

I wouldn't much like being paid the same rate for working the Sunday church crowd brunch as someone who worked, say, the Tuesday afternoon coffee drinker/readers.

nolechica

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Re: No-Tipping Policy In Restaurant
« Reply #82 on: June 18, 2014, 08:31:51 PM »
You might not but people like me would.  I can be polite and attentive, but not warm or perky.  I'd rather a lower steady wage and less stress than having to be an underpaid actress.

ti_ax

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Re: No-Tipping Policy In Restaurant
« Reply #83 on: June 18, 2014, 08:42:21 PM »
You might not but people like me would.  I can be polite and attentive, but not warm or perky.  I'd rather a lower steady wage and less stress than having to be an underpaid actress.
Management might still insist on a warm & perky demeanor no matter what the tipping policy is.

nolechica

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Re: No-Tipping Policy In Restaurant
« Reply #84 on: June 18, 2014, 08:50:56 PM »
You might not but people like me would.  I can be polite and attentive, but not warm or perky.  I'd rather a lower steady wage and less stress than having to be an underpaid actress.
Management might still insist on a warm & perky demeanor no matter what the tipping policy is.

That would be misguided though if this thread is a decent cross section.

Another Sarah

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Re: No-Tipping Policy In Restaurant
« Reply #85 on: June 19, 2014, 08:01:42 AM »
I'm reading all this with a keen interest. I come from a non-tipping culture (the Netherlands) and I love it.
Service in the food industry is, on the whole, awesome, servers are friendly, polite, knowledgeable and know when to leave the customers be. You're also not rushed: when you occupy a table in a restaurant for dinner, you're not expected to relinquish it to the next customer, it's yours for the evening. So you can linger over your coffee, just talking with your company, or reading your book even, without any (pointed) looks from the waitstaff. Also the waitstaff doesn't try to ingratiate themselves to you, in the hopes of a better tip: there's no need to grovel when they're paid a living wage (usually well above the legal minimum wage).
And if the service is really, really good? Then you can decide to tip, as generously as you like, keeping in mind that 10% is considered very generous indeed. Or you don't tip, that's fine as well: tips are appreciated but never expected.
And if the service is bad? You complain and/or vote with your feet, as you do in any other kind of business.
This is not true, the Netherlands is a tipping culture. What yopu describe is tipping culture, what the US has isn't.

You have said this three times about the US. We do have tipping culture by our definition, so I don't agree with this. The restaurant in question is in the US, so I think we should go with that. I won't mind if it changes here, though.

I do love reading about "tips"  in other countries, however, and how it works for them, so please keep the stories coming!

I think the point Marcel is making is important though - not because what people are classifying the US as a tipping culture but because they are then classifying the rest of the world as a non-tipping culture.

A lot of the arguments for keeping the US system as it is boil down to "servers will not be incentivised to perform well" and "There will be no way to reward/punish for the level of service" - because people are assuming that a none-tipping culture means absolutely no tipping.

By paying a more fair base wage and moving tipping to something more in line with other countries, the emphasis on tipping goes to reward for good service. It is very rare that I (UK) don't tip a server, I just tip them between 5-10% for standard/good service and 15% if they were exceptional. If I choose not to tip, that says something to the server because they didn't get a reward for good service, but I paid for my dinner, they worked their hours and they will go home with a living wage. If they want to earn a bit extra, they have to up their service level, and I don't have to be guilt tripped about starving someone who did a sub-par job.
(and in the UK commission jobs work the same way - base pay is low but liveable with)

squeakers

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Re: No-Tipping Policy In Restaurant
« Reply #86 on: June 19, 2014, 11:49:38 AM »
Back in the Stone Ages i worked at a pizza and ice cream parlour and we got paid minimum wage.  We seldom got tips even with the most attentive of service.  Tips were included in birthday packages but that money went straight to the business (but sometimes the parents would give cash tips.)

We were not a full service store though: you ordered at the counter but a waitress would carry your drinks/plates etc to your table.  When the pizza was done it was called out over a microphone (for a while they tried the number system and the waitress would take the food out but they went back to having the customer grabbing it).  The waitresses also would take ice cream orders, bring them out and settle the bill for those.  But mainly they/we were pretty busboys and wranglers of children (there was a game room, coloring paper and balloons to be handed out.)

It was nice knowing if I did a 3 or 6 hour shift I would be getting paid for all of it and not have to rely on how someone else felt my service was.  It also meant I could work anywhere in the shop whether answering phones, running loads of dishes through the washer or ringing up orders.  About the only thing I didn't do was make the pizzas (no way was I going to deal with the burns on my arms from the ovens) or deliver the orders (no way was I going to use my car even with mileage on top of hourly wages and tips... mainly because I suck at maps let alone remembering where streets are even in the city I grew up in.)
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amylouky

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Re: No-Tipping Policy In Restaurant
« Reply #87 on: June 19, 2014, 12:40:31 PM »
You might not but people like me would.  I can be polite and attentive, but not warm or perky.  I'd rather a lower steady wage and less stress than having to be an underpaid actress.

Fair point. I guess I was thinking of flat rate as opposed to this restaurant's $10 or 20% policy, not compared to the current tip culture. I agree, you shouldn't have to be an actress to get a decent wage. But I wouldn't like being the one scheduled for the busy shifts, when those who worked less busy shifts got the same pay I did, with no extra incentive. I guess that would be a management thing though, to make sure the busy shifts were evenly spread out.

Allyson

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Re: No-Tipping Policy In Restaurant
« Reply #88 on: June 19, 2014, 02:23:45 PM »

Fair point. I guess I was thinking of flat rate as opposed to this restaurant's $10 or 20% policy, not compared to the current tip culture. I agree, you shouldn't have to be an actress to get a decent wage. But I wouldn't like being the one scheduled for the busy shifts, when those who worked less busy shifts got the same pay I did, with no extra incentive. I guess that would be a management thing though, to make sure the busy shifts were evenly spread out.

Well, there are a lot of jobs where certain shifts are way busier than others, and tipping isn't really a thing, aren't there? Also some people prefer working busy shifts because they tend to go by way faster than when it's slow...so I think yeah, that would be a management thing that nobody hates the shifts they are working.

lady_disdain

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Re: No-Tipping Policy In Restaurant
« Reply #89 on: June 19, 2014, 03:32:55 PM »
You might not but people like me would.  I can be polite and attentive, but not warm or perky.  I'd rather a lower steady wage and less stress than having to be an underpaid actress.

Fair point. I guess I was thinking of flat rate as opposed to this restaurant's $10 or 20% policy, not compared to the current tip culture. I agree, you shouldn't have to be an actress to get a decent wage. But I wouldn't like being the one scheduled for the busy shifts, when those who worked less busy shifts got the same pay I did, with no extra incentive. I guess that would be a management thing though, to make sure the busy shifts were evenly spread out.

On the other hand, on a system where the waiter depends on tips, being scheduled for the less busy shift might mean not earning enough to cover the bills.

Having peak times and down times does make scheduling difficult but, once again, it is hardly something exclusive to the restaurant business. For example, how do stores manage to keep their staff happy when they also have very busy shifts and others that aren't as busy?