Big problems for small tips

A flawed compensation system can lead to several issues including inequity, rivalry and leadership challenges, says one study
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 09/23/2016

By Sarah Dobson

They may appear as a small item on the bill, but tips represent a huge challenge in the restaurant industry. And a recent study suggests there are several operational issues arising from tipping that include inequity and unfairness, a loss of control of service quality and difficulties in succession planning and promotion.

“If tipping is to continue, restaurants will continue to have to manage the significant issues that arise. The industry needs to take a hard look at the best model for customer interaction and staff remuneration for long-term success,” write the authors and University of Guelph professors Bruce McAdams and Michael von Massow in Ontario.