Staff Motivation – why would you risk demotivating your Service Staff?

I read a news story recently that informed me that in some restaurants, tips you leave for service are not always passed on (fully) to the staff. New laws are being discussed to prevent restaurant owners from dipping into their staff’s tips, so thats a good thing. I was though confused as to why restaurant owners would do this in the first place though.

If you look at the restaurant industry, I can see three core components of the business offering;

1) Firstly, you are attracted to the restaurant by the marketing and branding of the restaurant, “the ambiance”

2) Secondly, the quality of food you receive, the delivery (both the taste and presentation) is a key thing

3) The third component is the service. When you eat a restaurant, you need the service to be good in order to make the entire event memorable.

If this were a transaction, then the transaction begins at when you enter the restaurant and finishes when you leave. As an owner, you can control the first two components, you can only influence the third.

You can train and coach your staff into how to deal customers and explain what you believe excellent service should be ..… but the customer leaving a tip is a great motivator to provide good service. The Service Industry in the US is usually recognised for your server’s greeting you when you walk in, giving you a service with a smile and then thanking you when you leave. These guys are reliant on their tips. They know it and I believe it’s a key driver for the good service they offer.

Here in the UK, we may ask “why do staff need more motivation, considering they are already paid a wage?”. The reality is as managers, or business owners, you do want to increase performance wherever possible. Staff can be motivated to perform better by giving them a Performance Related Reward. The trick is to make this an effective reward. Let’s say you have a team of 20 and you offer an expenses holiday (£5000 worth) to the best performer of the year. Now this is a great reward, but only 1 person’s going to win it. So you may find that a significant number of the 20 team members are not motivated by this. A better option will be to provide a reward which motivates and engages more of the staff and keeps more of them “in the hunt”. In retail, I find the most successful approaches are to provide individual Sales Commissions or Team sales commissions, depending on the specific product you are selling.

I use Commission as drivers in the business’s I own. So for instance “this weekend, if we take £10,000 in new business, I will give a team bonus, plus the best 2 salespeople will get an additional bonus”. Most of the time this works, because if they don’t make the target but get close, I still pay out some form of bonus. There is a team bonus and also something extra for individuals who shine. I find paying out an extra few % in sales commission is better for me, as the staff generate more revenue for me. Now I am not saying that the only way to motivate staff is through financial reward – good managers will know what motivates their staff as it maybe that a non-financial reward is more effective, so you should bear this in mind. Certainly those restaurant owners who do not pass on their tips – what message are they giving their staff? Are they saying, “we pay you to be here, but we don’t need you to deliver excellent customer service?”

The key things to remember here are;

  • Staff can be further motivated to perform better, just giving them a job with wages is not guaranteed to maximise their performance.
  • Make the motivation relevant and achievable …. Setting impossible targets will possibly just demotivate them.
  • Staff that cannot be motivated …. Well that’s a different story and I will let you think on that yourself.

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