Restaurant Expert Witness Says “’Tip Pooling’ is Poor Management”

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Published: 18th November 2011
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Restaurant Expert Witness Says “’Tip Pooling’ is Poor Management”

Restaurant Expert, Howard Cannon, of Restaurant Consultants of America, has worked in restaurant operations for more than 24 years, teaching restaurant owners and restaurant managers how to be successful. According to Cannon, “Requiring waiters and waitresses to participate in a ‘tip pool’ is one of the worst management decisions that a restaurant owner can make.”

Tip pooling is a practice in which restaurant management requires all of the servers to combine the tips they receive from customers into a common fund called a “pool”, and then the total amount is divided among all of the wait staff – oftentimes, regardless of how many hours each person worked or how many customers each person served. In many instances, other employees, such as bartenders, hosts, and bus staff, are also included in the distribution of the pool.

“Whenever I see tip pooling, it is a clear sign that a restaurant manager or restaurant owner does not understand: (1) restaurant employees, (2) profitable restaurant operations; and, (3) how to motivate and drive their staff to better performance,” says Cannon. “Think about it this way, if you are the best server in a restaurant, do you want to give away part of your hard-earned tip money to other servers who don't work as hard as you do? Of course not!”

“Mandatory tip pooling has a negative impact on customer service and overall restaurant quality,” explains Cannon. “If you were the server, why would you be motivated to do a great job of customer service if you knew you would be paid the same tip amount no matter what you do? Tip pooling waters down all facets of good restaurant service.”

Cannon says he does not believe that sharing tips between servers and other support staff is always bad, but that mandatory tip pooling imposed uniformly by management is a poor decision. “There is a big difference between tip pooling and sharing tips,” says Cannon, “sharing tips is completely voluntary, and the waiter or waitress has control over when and with whom to share them.”

“The smart restaurant server will strategically choose to share his or her tips,” Cannon says. “The best way to get a busboy to clean your table is to share your tips; and, the best way to get a bartender to give great service to your customers is to tip him. Good waiters and waitresses know this.”

The difference with tip sharing, as opposed to tip pooling, is that the waiter or waitress is making a choice to share tips based on the quality of help he or she is getting from the individual members of the restaurant support staff. Cannon states, “The busboys and bartenders know that the server is sharing voluntarily, and that they will earn their shared tip money the same way that the server earns tips from the customer - by providing superior service.”

“When tip pooling is required by management, instead of allowing servers to use discretion in voluntary tip sharing, that's when you see the incentive to work hard and work well taken away,” adds Cannon.

Cannon is the CEO of Restaurant Expert Witness and Restaurant Consultants of America, and the author of The Complete Idiot’s Guide to Starting Your Own Restaurant©,Volumes I & II, published by Alpha Books and found in bookstores across America and in more than 76 countries around the world. His company provides restaurant expert witness services, as well as, restaurant consulting services in start-ups, concept design, restaurant turnaround and improvement, restaurant operations, and more – both nationwide and global.

Mr. Cannon is one of the most sought-after restaurant consultants and restaurant expert witnesses in the country. He has written and presented more than 200 industry articles, speeches and seminars, and has spoken at industry events, corporate gatherings, high schools, and universities across the country. A renowned speaker, author, consultant, and advisor, Howard Cannon is considered by many to be a foremost authority and expert on restaurant start-up, turnaround, and profit improvement. He has been interviewed by The Wall Street Journal, USA Today, Fox News, CBS News and Canadian Public Radio.

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