Tipping adds 15% to 20% to any restaurant tab – a cost many consumers don’t even think about until they add up the bill.
How much should you tip for bad service? How much for exceptional service? How much for hardly any service at all?
Noodles & Co. CEO Kevin Reddy says his chain has been growing since the 2008 recession and the high unemployment that follow, in part because his servers do not expect to be tipped. With rising food prices – and increasingly cost-sensitive consumers – it’s been an effective strategy for Noodles.
Click here to read my column on Marketwatch.
And click here for one blogger’s take on the expansion of tipping expectations since the last recession.
May 28, 2012
I have always found tipping a nuisance. On a recent trip to Japan, I was fascinated to see a “no tipping” society that still provided
excellent service and was customer oriented.
Offering an employee a bonus for a specific goal or an employee that expects a tip, diverts the employee’s focus away from the bottom line of the company. An employee will divert resources or larger revenue from
the whole company to achieve their personal goal and bonus.
A former Marketing Manager of mine was doing such a thing. Whenever I would ask him about the expansion of our distribution network, He would come to me showing increased numbers of distributors. After he was gone, we found out that he was converting direct sales 100% list customers to first time distributors with a 10% discount. He was giving away 10% of revenue just to make himself look good!
And again, when I ask if any new distributors had follow up orders, he again diverted direct sales to “his” new distributors, at a discounted revenue, just to make himself look good.
Employees need to have a company bottom line focus. And the company must reciprocate. Employees will work for the company, not just for themselves, when they see that they will receive increased financial rewards when the company is doing well.
Skip the personal incentive and goal bonuses.