To tip or not to tip

Another Pittsburgh restaurant joins the no-tipping trend. But is that what wait staff want? ask hospitality experts BRIAN WARRENER and PAUL BAGDAN

Dinette in East Liberty recently joined the minitrend of no longer accepting tips, following Bar Marco in the Strip District and a growing number of restaurants across the country.

To tip or not to tip? That’s a question that has perplexed customers from the beginning of time. Recently, some restaurateurs — such as Dinette’s Sonja Finn and the threesome who own Bar Marco — have taken away this anxiety, including the need for math skills, by eliminating tip service in their establishments. Instead, they compensate their wait staff with a higher wage. At the same time, a number of state legislatures are contemplating raising the minimum wage and tipped minimum wage.

Both efforts address employee compensation. There is no shortage of opinions on what consumers and restaurant owners think about eliminating tipping. But, for tipping to be eliminated throughout the industry, wait staff will need to buy in. So, what do we know about these employees who receive gratuities?

Servers are motivated by money. Serving and bartending are tough. The work can be physically demanding, the hours long, the workweek unconventional, and the public can be difficult. The primary motivation for holding these jobs is that they pay well. Yes, you need a passion to provide great service, but you could do that at a local department store without having to clock out at 2 a.m. on a Sunday. The sacrifice warrants a reward.

Servers are risk takers. We surveyed some students at Johnson & Wales University who are professional servers, asking them if they would prefer a steady hourly rate over the uncertainty of tips. All of them indicated they preferred tips, with many mentioning the amount of money they can make on a busy Friday. When asked about a dead Tuesday, they again mentioned the bonanza on Friday.

Servers are entrepreneurial. These same students indicated that they worked hard to provide great service and to upsell because of the direct financial benefit to them. They preferred working alone and expected to benefit from their effort.

Servers are transitory. Many servers are someone else: students paying their way through school, out-of-work professionals, teachers looking to supplement their incomes or stay busy during the summer. They want to make as much money as they can until they can move on. Most are not likely to be interested in professional development, promotion, specialized training, or 401(k)s. These items motivate careerists, not transients.

We also solicited the thoughts of hospitality professionals — both management and wait staff — in a survey posted on targeted digital

and social media sites, as well as through hard copies distributed at the 2016 Nightclub & Bar Convention and Trade Show in Las Vegas. Nearly 77 percent of respondents indicated that they had a generally unfavorable opinion of eliminating tips. In fact, tipped employees really hate the idea (89 percent unfavorable), while managers just hate it (72 percent unfavorable).

We asked if eliminating tips would result in our respondents “moving on.” One in four would stay in their current position if a tipped wage were eliminated. Forty percent would seek an establishment with tipping while another 25 percent would simply leave the industry.

Nearly half of our respondents suggested the quality of service they would provide would diminish if they were not working for tips. Only 3 percent anticipated improving the level of service provided if not working for tips.

An organic shift away from the tipped wage for service employees is unlikely. The majority of industry-constituent groups — customers, owners, managers and tipped employees — don’t like the idea. The few locations where restauranteurs have eliminated tipping tend to be in cities and states with a unique set of conditions: a higher than average minimum wage, a shortage of skilled kitchen employees and a customer base that has less price sensitivity and is more likely to accept the higher menu costs associated with the elimination of gratuities.

If the elimination of tips comes, it is likely to be driven by policy makers increasing minimum wage and eroding the tip credit, making it difficult all over to attract skilled hourly employees. To tip or not to tip – that is the question for restaurant owners and managers, as well as legislators considering bills that would increase the tipped and minimum wage.

Brian Warrener and Paul Bagdan are members (faculty) of the Johnson & Wales University College of Hospitality Management in Providence, R.I.