My coworkers and I work hard and are proud of our organization because we are compensated well. We are loyal to our organization and have remained with the business for as long as we’ve lived in Corvallis. However, we are all paid Oregon’s minimum wage. At our coffee shop, a significant chunk of our paychecks can be attributed to gratuities. Tips have incentivized us to develop closer relationships with regular customers, complete orders quickly, improve the shop’s curb appeal, and enhance our physical appearance. These behaviors also create more returning business for our organization without soliciting an increase in employee base pay, so we are encouraged to engage in actions that promote tipping in customers.
Conversely, I have experience working a serving job where the owner took a hefty cut of employee tips. In this position, my coworkers and I were less motivated and rarely did work outside of our required tasks. None of us took pride in our jobs, and that sentiment was reflected in the quality of our customer service. This organization suffered from high employee turnover and struggled to hire high-performing staff because everyone knew the tips were unfairly distributed. As a result, the cafe was trapped in an endless shuffle through unmotivated, short-term employees.
According the New York Times article featured in class this week, Moo Cluck Moo, a small fast food joint in Michigan, pays its employees a starting wage of $15 an hour- $5 over the state’s minimum wage. As a result, the business owners have experienced no turnover, resulting in low training costs and a high performing lineup of workers. Their workers outperform Moo Cluck Moo’s competitors and have customers coming back for more. Similarly to Moo Cluck Moo, the coffee shop where I work has high retention and lower training costs than competitors that do not encourage customer tipping, like Dutch Bros or Starbucks. Both the employees and the employers benefit from this.
Greenhouse, S., & Strom, S. (2014, July 4). Paying employees to stay, not to go. The New York Times. https://www.nytimes.com/2014/07/05/business/economy/boloco-and-shake-shack-offer-above-average-pay.html
