Understanding restaurant tipping systems: a human resources perspective

Purpose – The present study aims to examine the different restaurant tipping systems on perceived fairness, distributive justice, and control from employees' perspective. Design/methodology/approach – Five different written scenarios of tipping systems were depicted in the present study. A total of 205 restaurant employees were assigned to each of the five groups and responded to a written scenario. Data were collected during the restaurants' briefings. Participants were asked to read the scenario and to fill out a survey instrument. Researchers administered surveys to 12 different casual‐dining, full‐service restaurants. Findings – Results indicate that when the service charge is added onto customers' bill and onto all tips collected for equal distribution among servers, this enhanced the employees' perception of fairness and distributive justice. Further, the traditional (non‐equal sharing) tipping system of keeping tips all to oneself is perceived as most fair and just to participants. However, in terms of equal sharing of tips, employees perceived sharing among all servers as more fair than the other tipping systems that include back‐of‐the‐house employees. Research limitations/implications – The current study has a number of limitations. First, researchers had very little control with regard to the accuracy of the procedure due to the use of professional‐oriented sample versus student‐oriented sample. Consequently, some demographic data were missing. Second, as much as the authors would like more back‐of‐the‐house participants, the majority of the participants (94 percent) were front‐line servers of the restaurants. Third, the results of this study can only be generalized to restaurant employees in casual full‐service dining restaurants. Finally, there is limited literature available specifically focusing on employees' preferences of different restaurant tipping systems; as a result consider this study as exploratory research. Practical implications – In order to satisfy FOH employees, restaurant managers should consider implementing tipping systems that permit front‐line servers to keep all the tips they earn to themselves. In some conditions, it is appropriate to include a service charge – the sample indicated this system as the next best choice. Originality/value – No research has been done investigating the different restaurant tipping systems and on perceived fairness, distributive justice, and control from employees' perspective in actual restaurant settings using professional‐oriented sample, and including front‐ and back‐of‐the‐house employees.