Tipping Makes Restaurants Seem Less Expensive
Why do restaurants rely on tips instead of a flat wage to compensate waiters and waitresses? Why not build the cost of service into menu prices? One explanation involves the way consumers determine how expensive a restaurant is. According to this idea, consumers will perceive restaurants with higher menu prices but no tipping to be more expensive than restaurants with lower menu prices and tipping. A new study from the Cornell Center for Hospitality Research finds that this is exactly what happens.
The study, “The Effects on Perceived Restaurant Expensiveness of Tipping and Its Alternatives,” compared the expensiveness ratings of restaurants with tipping, added service charges, and service-inclusive pricing. Of those three practices, the one that seems the most expensive to customers is service-inclusive pricing. Tipping and service charges, on the other hand, seem to take advantage of lower menu prices despite higher add-on service costs. Thus, restaurant customers don’t appear to take tips into account when they judge how expensive a restaurant is. The study is available at no charge from http://www.hotelschool.cornell.edu/chr/research/centerreports.html.
Authors Shuo Wang and Michael Lynn, both of the Cornell School of Hotel Administration, used a computer simulation that allowed participants to make food selections from several restaurants, each of which used tipping, service charges, or service-inclusive pricing. Even after the participants saw their final bill, which included a tip or service charge, they viewed the restaurant with service-inclusive prices as more expensive.
“We concluded that our participants were generally using menu prices—and not the total bill—as their guide for how expensive they viewed our simulated restaurants,” said Lynn, an associate professor of marketing. “Thus, it seems to us that only restaurants with price-insensitive customers can adopt service-inclusive pricing without risking the loss of customers.”
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Why People Watched The Super Bowl
It’s a yearly tradition
55%
The commercials
54%
Last game of the NFL season
45%
Reason to get together with friends/family
35%
Ability to talk about game next day
26%
Fan of one of the teams in game
22%
Everybody else watches it
18%
(Multiple answers allowed)
Source: Initiative Futures via Insight Express online survey of 502 respondents (228 men/274 women)
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Just Like Family!
John has a great post on his blog today on the best example of how to treat your staff!
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Are You A Sheep Herder?
This is one of those times when an introduction to a great post isn’t necessary. What is, is that you simply read it and hope you don’t see yourself in it!
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NRA Opposes Free Choice Act Legislation
WASHINGTON, D.C. — The National Restaurant Association expressed its opposition to bill H.R. 800, the employee Free Choice Act, as it came before the House Education and Labor’s Subcommittee on Health, Employment, Labor and Pensions.
The bill was sponsored by Rep. George Miller, D-Calif.
The NRA said the proposed legislation would take away an employee’s right to a federally-supervised secret-ballot process when deciding whether or not to join a union. It would replace secret ballots with a card-check system that lets a union organize if a majority of workers simply sign a card. Under the system, workers’ signatures would be made public to the employer, union organizers and co-workers.
“When a union is attempting to organize a workplace, employees sometimes face intimidation and pressure about how they should vote from the union or from management or both,” said outgoing NRA president and chief executive officer Steven C. Anderson. “The only way to guarantee employee protection is through the continued use of a federally supervised secret-ballot so that personal decisions about whether to join a union remains private.”
Federal courts have repeatedly ruled that federally-supervised secret-ballot elections are the fairest and most reliable method to determine whether a union has the support of a majority of employees.
“No one — employers or union organizers — should fear an election conducted by secret ballot. It is the only way to protect an individual’s freedom to choose without subtle or overt coercion,” Anderson said. “We appreciate that a hearing is being held today to hear both sides of this critical issue for restaurant and all small business employees. We strongly urge Congress to take a second look at this bill that severely restricts many of the nation’s hard-working Americans’ right to freely choose their own union representation.”
Popularity: 5% [?]
