Compensation Practices in Restaurants and the Impact on Service Quality

Abstract

America's eating and drinking establishments employ over 4.7 million food servers. Over 2 million of these employees earn approximately 50% of their income from tips. Empirical research in occupational and organizational commitment has identified a positive relationship between occupational commitment and employee turnover. Identifying the relationship between the use of tipping and employee commitment could have significant implications for service quality in the restaurant industry. Researchers have documented potential negative consequences of the practice of tipping that affect organizations, employees, and consumers.