Case Study
Restaurant tipping systems
The notion of restaurant tipping has been studied widely; however, much of the previous research relating to restaurant tipping has focused on customers’ perspectives.
-It is important to understand tipping systems not only from the customers’ point of view, but also from that of employees’.
-The employees are the individuals who deliver the service and receive the tips given by the customers.
-Tipping is not a must but can be considered as a social norm in the USA.
-In other parts of the world, such as Hong Kong, Taiwan, Japan, Russia, and Australia tipping is not mandatory; in some instances tipping is forbidden.
Tips Workers’ incomes
- In the USA, tips make up over half of many restaurant workers’ incomes.
-Research findings by Lin and Namasivayam (2011) indicate that when the service charge is added into customers’ bill and into all tips collected for equal distribution among servers, this enhanced the employees’ perception of fairness and distributive justice.
-Further, the traditional (non-equal sharing) tipping system of keeping tips all to oneself as perceived as most fair and just to participants.
-However, in terms of equal sharing of tips, employees perceived sharing among all servers as more fair than other tipping systems that include back-of-the-house employees.
Back-of-the-house employees (BOH)
Front-of-the-house employees (FOH)
Questions
-Should restaurant providers begin to include back-of-the-house (BOH) employees when distributing tips since many service concepts suggest that satisfying employees is important to customer satisfaction?
-Would equal sharing with all employees (i.e. front-of-the-house and back-of-the-house workers) be perceived as more or less fair than individual servers keeping their own tips?
How can restaurant providers better design a fair tipping system?