It's not effective if tips are pooled and shared. However, if tips aren't shared, other than perhaps tip outs to bartenders and bussers, they can be effective. Mr. Kipper and I go to the same location for breakfast every Sunday, and always ask for the same server. She knows us, knows our drinks and food order, and takes care of us as far as ensuring that we have our fill of biscuits and drinks. She receives far more of a tip from us that she probably does from most, but then again, she knows when she sees us that if she does a good job, she's guaranteed a tip that amounts to something close to 40% of the check (check is usually about $25, she usually gets a $10 tip). She has an incentive to take really good care of us.

Another good example of how it's effective was our dinner on Saturday night. Mr. Kipper had a certificate for a free burger for his birthday at Red Robin. (Yes, Red Robin. Sometimes, it's a burger type of day). I have very low expectations for service at Red Robin. Saturday, we had a server who you could tell was doing her absolute best for all customers. We never had to wait on drink refills (she'd bring drink refills before we'd finished drinks), she kept offering additional french fry refills, and was generally very on top of her game. Our check was $15 after the certificate. We gave her $30 cash to cover the bill and told her to just keep the change. I'd think she learned that by doing her absolute best for customers, she'll earn more than by doing an ok job. FWIW, we also talked to the manager on the way out and told her how great the service was that night.
Generally, no. I'd figure that the employees had no incentive to go above the minimum at a restaurant that doesn't allow tipping, but rather, paid everyone a living wage.

I'd guess that at restaurant #1 in our scenario, good servers would want to work there, knowing that if they did really well, they'd earn more in tips. I'd guess that so-so servers, who didn't want to go above the minimum effort, would want to work at restaurant #2, where they knew they'd make a certain amount of money each night.

My general experience has been that many servers who are very good at what they do earn a lot in tips, and therefore, wouldn't want to switch to a non-tipping system.
For me, part of it is the service. If I want to fetch food and drinks myself, I'll either go somewhere that is fast food or buffet style, or will stay home and cook.

I'm curious if you feel that way as well in countries where that is the norm? Or just in the example given?

"Generally, no. I'd figure that the employees had no incentive to go above the minimum at a restaurant that doesn't allow tipping, but rather, paid everyone a living wage."


And how is it different when they assume that they are virtually guaranteed a 15% to 20% tip, just by working in a restaurant?
Because that's the state of affairs in most places now.

At least in the US, I see it working that way.
I've found that the good servers know they can earn more than 15-20%, and do what they can to earn it.

No-tip Restaurant, with their higher wages, will get more applicants for server positions than Tip Restaurant. No-tip Restaurant can then select the best employees, and if they aren't up to par, they can be easily replaced.

Tip Restaurant, on the other hand, will always have a mix of good and not-so-good employees, and the customers "select" the best employees by paying them more. Unfortunately for the customers, they might get stuck with a not-so-good employee, and the saving grace for them is that the meal is cheaper.

Personally, I would much rather go to No-Tip Restaurant, even if it costs 20% more (not 30%, that's a rip-off), because I find tipping to be outdated, stressful, stupid, and it contributes to income tax fraud.

Interesting. In my Disney example above, service has declined quite dramatically overall in the past few years. Many people attribute that in part to the mandatory tips imposed ie that servers are not as motivated to provide decent service, as they know that they will be tipped a minimum of 18% regardless of the service they do provide.

Of course, that is an 'artificial' environment, with a large number of unskilled, poorly paid workers in large part supplemented by exchange program workers and/or college program workers.

The wages are guaranteed higher only if you don't receive a lot in tips. If you receive a lot in tips, you'll earn more.

If you go to the same restaurant repeatedly, you can always select the best employees by requesting them.

Let's use the scenario above, where Restaurant #1 pays only minimum wage. In PA, that is $2.83/hour. We'll say that Restaurant #2 pays $10/hour, even though full minimum wage is $7.25/hour, IIRC.

Say that all servers have 4 tables/hour, and work 6 hours/shift waiting tables. Say each server does 2 hours of prep/side work. Base wages are $22.64 at restaurant #1, and $80 at restaurant #2. All that a server at restaurant #1 needs is for each table to leave $3 in a tip, and those at restaurant #1 will make more in an evening. If each table leaves 15% on a $40 check, that's $144 in tips. Why would good servers, who have a good idea that they'll pull in more than $10/hour in tips want to work at a restaurant that pays $10/hour, no tips?

Well, I chose the 30% markup because I would assume if a restaurant were to begin the "movement" that would be an answer to the OP, they would have to raise menu prices more than the equivalent of a 20% tip in order the keep the servers that they have. Most tables, at least at the restaurant I work at, tip 20% after tax. Additionally, we get that money that night, a huge incentive for me to do the job that I do. If I were to completely abandon a) the ability to earn more based on a good job and b) the instant gratification for working a shift by only receiving a bi-weekly paycheck, it would take more than paying me, say, $15 an hour to keep me. I make far more than that on my good nights. (And around that even on the worst of the worst nights).

For anyone that actually takes pride in their job, which in the restaurant industry unfortunately is not 100% of the employees (nor any industry for that matter), assuming the money is the same, guaranteed or non-guaranteed they should perform the job at the same aptitude.

That said, when given the chance to put the "automatic gratuity" on large party tables, I pretty much always decline the option. I know I do a good job, and want to be compensated accordingly. I don't "rely" on the fall-back of guaranteed money. But I also know a fair amount of my fellow servers out there don't do that great of a job, and would be rewarded as such if they had the guaranteed option.

I completely disagree with your statement insofar as the no-tip restaurant will not earn the server nearly as much money as the tip restaurant. Simply put, the restaurant will never pay me as much money as I earn in tips. I've tried to keep my own personal financial statements out of these tip threads, but I think it's time I have to divulge a little information. On a good night, I will earn around $50 an hour. $3 of that comes from the restaurant itself with the rest coming from tips (after including the deduction of 10-25% of my tips that I "tip out" to bussers, bartenders, etc. The amount is variable based on how much alcohol I sell and in what form).

I understand that that number might seem quite high to some of you, but that's how it is at nicer restaurants (and sometimes more). There's essentially no way that the restaurant would ever guarantee me such a wage. The highest hourly employees at any restaurant I've ever worked in got paid around $22 an hour. So that would be probably be the best I could hope for. I'm not taking a 50% pay cut, and no good servers that I know would be willing to either. If any restaurant tried to incorporate such a policy, I can almost virtually guarantee that every server would quit. In most restaurants, you would essentially get Burger King level service, because the people that deliver said service would be the only people willing to work at those establishments.

Also, the more that the restaurant has to pay their employees, necessarily the less they will want to have working at any given time. So if you think your server looks a little bit stressed tonight? Imagine if he had double the amount of tables because the restaurant was trying to aggressively slim down their labor budget. I worked at a very nice restaurant in Seattle where the minimum wage for servers was something like $7.60 an hour. You better believe on lunch shifts we ran bare bones staffs and it definitely showed in the service. I did the best I could, and I still got absolutely steamrolled regularly, and our clientele changed dramatically. Whereas we used to have a lot of business types, it was reduced more to the shopping crowd and tourists (essentially those with either a) a lot of time on their hands or b) had never been there before so knew nothing of the poor service that might be looming).

I'm not trying to predict the apocalypse here, but I think there's a lot more that would go into any kind of change in "tipping systems" than people who have never done the job on any kind of professional level would understand.

Outdated? Yes.

Stressful? Really? It's stressful to add 20% to a check?

Stupid? Yes.

Income tax fraud? All of my credit card tips are automatically logged to the IRS. Any cash tips I have to claim at the end of the night before it allows me to clock out. There are far more failsafes put into the system than someone who hasn't done the job would realize.

Ding ding ding.

Chris

I think there are a few, myself included, on this thread who have worked in the service industry in places outside of North America, and it is a touch insulting to suggest that a non-tipping environment results in Burger King type service. Thousands of servers work every day without any tips, from family dining, through to Michelin starred restaurants across the world. And I certainly never ran at a bare bones level (odd days of staff sickness aside).

Even in North America there are places where you don't tip the staff (private members clubs for example), and the service given in these places is incredibly good, certainly a notch above the waiters in may of the other restaurants in town.

In terms of managing money, I've been in jobs where I get the money when I do the work (freelance teaching for example) and where I get a monthly pay check, and various weekly / bi-weekly methods in between. You soon adjust to it, it just becomes the norm. I personally wouldn't care if I got paid the same day, or bi-weekly, after all my biggest bills (mortgage etc) are not daily.

If the argument is that servers will only provide good service if they are given tips as incentices, then why should this only apply to servers?
Does it mean that customer service representatives should be tipped to encourage them to really try to help you?
Or that you should tip school teachers, dentists, or any other employees that happen to be facing customers?
For all these other professions, if the employee doesn't do his job well, he will eventually be replaced by someone better - why should this be any different for servers?

"Let's use the scenario above, where Restaurant #1 pays only minimum wage. In PA, that is $2.83/hour. We'll say that Restaurant #2 pays $10/hour, even though full minimum wage is $7.25/hour, IIRC."

Huh? The PA minimum wage is the same as the federal minimum wage.

In the US at least, it's that those who are servers know they receive tips as incentives, while those who aren't servers know they won't.
In PA and in many other states, those who earn tips, in addition to a wage, can be paid a lower minimum wage, as it is assumed that the tips will make up for the difference. Servers earn $2.83/hour, minimum wage, figuring that tips will make up the difference.

Has anyone who has visited an American chain in both the US and in Canada seen a marked difference in the level of service received?

One thing I've noticed that in some cheap restaurants and mini bars, the staff is not treated well. they are hired on very low wages and no extra benefits are given to them as compared to star rated restaurants so they beg for tip as an incentive for them. Consequently if you are getting meal and services on very cheap rates than its not bad to encourage the staff as well.

I hate the tipping system and try to avoid going to restaurants where they expect a tip. I don't tip hotel maids or buffets.

However, I'm happy to make an exception for a business trip. My employer allows us to expense tips, including hotel maids. Half the time I'm on the road anyway, so in reality I do tip a lot, but it's all OPM.