Research shows a compliment can achieve more than a tip

The results of a study carried out among formal and informal traders in East London selling “slap” chips and ice-cream bring a small ray of hope to financially stretched small business owners.

Research by Nelson Mandela University economics professor Syden Mishi and University of Fort Hare Master’s candidate Kelvin Tantsi shows that small business owners can use methods other than money to boost employee productivity.

The study compared the effects of giving a cash tip and a compliment on portion sizes at fast-food outlets — and found that a compliment given with a smile led to a bigger helping.

“It was done mainly on small formal businesses, and a food caravan at the end of the street,” Mishi said of the research conducted at four Buffalo City eateries.

“One of our aims was to show how to motivate companies, given that they are mainly small businesses who may not be able to pay staff more in wages.”

The Business & Economic Sciences associate professor, who started this National Research Foundation-funded research while at the University of Fort Hare in 2018, said the experiment had particular relevance now.

“We are in lockdown, and there is no doubt this will negatively affect business, especially the small to medium and micro enterprises which are already struggling, and to which the government has pledged support.

“However, our findings bring a ray of hope to the informal sector and to the broader business community.

“Firms can do better by complimenting their work force on how they soldiered on since the first case of Covid-19 in SA, for example, and let them know what it means to the firm for them to be safe and stay healthy.

“Tell them the critical role each employee plays in the recovery path of the firm, and if at all possible, assure them they will receive full pay during April and beyond amid work disruptions.”

Tantsi, 32, said six students undertook the research on the streets of East London, but he had stepped in personally as well.

The Faculty of Business and Economic Sciences results specifically showed that: compliments increase effort as measured by the weight of a product a shopper would receive, for example a larger scoop of fried chips, chicken livers or icecream; compliments bring out more effort than a monetary reward or tip; and not complimenting or giving a tip produces the least effort.

Behavioural insights like this are key to unlocking productivity and growth in SA, said Mishi.

“Take care of your employees now, and they will be there to help you rebuild your business and recover from the Covid-19 effects and generally depressing macroeconomic environment.”

One of our aims was to show how to motivate companies, given that they are mainly small businesses who may not be able to pay staff more in wages