Tips

Analysis

Tips constitute an automatic control mechanism that improves some dimensions of quality without being necessary for the organization to transmit and evaluate information about it.

In the structure of a tips distribution system, a great number of factors related with incentives and measurement possibilities are important. On the one hand, a high degree of interaction among workers facilitates the use of the “box” system (i.e., tips are put inside a box in order to share them afterwards). Those interactions are associated both with production and demand. An example of production-related interactions is the one between bar waiters and waiters serving tables. An example of demand-related interaction is the propensity of individual appropriation towards generating disputes in serving generous clients when work spaces are not clearly defined. On the contrary, the box system reduces the incentive to serve clients well. In addition, it is less convenient to implement when the tips are easy to appropriate individually. It makes sense, therefore, that in a sample of 56 hostelry establishments (bars, cafeterias and restaurants) it has been observed that the fewer the waiters, the smaller the probability of fraud and the higher the interaction among them, and that it is more likely for tips to go to a common box. In general, tips obtained in the bar are usually dedicated to constitute a box that is shared in equal parts.

Individual appropriation is usually more frequently used in tables, especially in the biggest establishments and in terraces. When restaurant services are offered, the employees working in the kitchen participate in the distribution of the box. However, in the smallest establishments, frequently family owned, tips are added to the cash register. It is remarkable that in large restaurants, more complex systems of sharing are developed, which are inherited across generations of employees and which aim at resolving all types of problems. Among them, it is notable the assignment of smallest parts to the youngest employees. Owners rarely intervene in the organization of the sharing, and when they do it is often to avoid new employees being marginalized by the veterans. Tips also interact with fraud. For instance, in some bars, the box system is used in order to avoid waiters dealing with personal funds during work time and thus remove of the possibility of taking part of the change due to clients. In the same vein, it is a very extended practice to replace the deficits in the cash register with money from the box, in order to encourage mutual monitoring among workers.