Profit maximisation should never happen on the back of the underpaid and overworked employees…..
So what!? Well I think it is important to see company policy proposals like this in context. Hospitality, and the service sector in general, is one of the lowest paid sectors in the UK and the staff in hospitality are among the most likely to be on zero hour contracts (ZHC). The front of house staff are more than likely on The National Minimum Wage (NMW) and some employers target younger staff for the simple reason to pay the lower bands of NMW. After all, it is cheaper to have 16-25 year olds working than anyone over the age of 25. This intention is often masked by having young staff ‘repressing the fun brand and their target customer’ in the restaurant, which may hold some truths, but I’d argue it is to decrease operational costs and increase profit.
As someone with over fifteen years’ experience in the service sector, in both retail and hospitality, I have seen the degradation of working conditions and the control mechanisms first hand. The increased utilisation of scripting and technological monitoring controls the employee to act in a way the employer desires. The technology can monitor an employee’s average spend and rank staff from low to high performers; which can be used in performance reviews or prioritising who gets the hours. Regardless of their fluffy employer branding or ‘bring your personality to work’ you must act in a certain way at a certain intensified pace. You are constantly at risk of having your shifts cut short or altogether which can lead to financial instability. This can vary from company to company but it is common practice. I’ve been the manager having to make difficult decisions about not recruiting new staff and intensifying the workload of my team to squeeze out a little more profit for the shareholders. I’ve had to performance manage or discipline staff for not following procedures due to rushing through their workload or having stock stolen from their shop-floor even though they don’t have the resources to maintain company standards. I see it now through a critical lens, but I didn’t back then.
So what does this have to do with TGI Fridays and their new tipping policy. Well, it reduces the tips kept by the front of house staff. As a waiter all through my undergraduate degree and recent MSc, tips were what I lived off. It was my pocket money and it was the reason I stayed at my waiting job as it funded my studies. Secondly, TGI Fridays is not giving a pay rise to their kitchen staff they are using tips left by customers’ for the good service they have received. This means the company will make more profit by taking tips off front of house staff and giving it to the kitchen staff to increase their wages. This is what I see to be wrong in this situation, the pay rise should come from the company not the front of house staff.
Now, I have no issues with tips being split fairly between front of house staff and kitchen staff. The two would not be able to perform their job without each other. In Pizza Hut, where I worked for four years during my studies, kitchen staff are on a slightly higher wage than front of house staff and receive 30% of card tips from the floor. This has always been the way since customers could leave tips via card; which started in late 2016. All cash tips were kept by the server that was responsible for looking after the table but was not distributed. A separate article could be written about the ethics and fairness of pooling tips and redistributing them but this article is focussing on tips being used to increase company profit.
Tips should not be used to top up wages. There have been horrendous examples of this in Las Iguanas and other restaurants in the UK. The NMW should come from the company in exchange for the employee’s labour and any uniform which must be purchased should be subsidised by the employer. There have also been cases of companies having to back pay because they forced staff to buy specific shoes or trousers for work; these should be provided or reimbursed. As for tips, these should be between the staff and the customer. Different systems operate between employers but management and the company should not benefit from gifts being left by customers with the intent to reward the employees’ effort and the service they received.
Brian Finlay
MSc Student in HRM