Does a Voluntary Tipping Policy Really Improve Service? An Examination of Consumer Agency in the Cruise Industry

Marketing and organizational - behavior scholars have identified several control mechanisms - behavioral, outcome, and clan - for managing employee performance. However, these mechanisms are inadequate in contexts characterized by high customer contact and complex, customizable service interactions (e.g., restaurant dining or spa services). In such contexts, we advocate a new, potentially more effective and efficient control mechanism borrowed from the economics literature - namely, consumer agency. We focus on a pervasive form of consumer agency - voluntary tipping - that has received little attention in marketing and report on three studies that test the effectiveness of this control mechanism as a means of improving service in the context of the cruise industry. Our results show that tipping does have a statistically significant positive effect on service. Implications of this finding are discussed for marketing theory and for strategic issues in services-marketing management