The Pro’s and Con’s of Working for Tips

Abstract

Despite its prevalence and importance in the hospitality, personal care, and travel industries, tipping is a form of compensation that does not appeal to all workers. Furthermore, liking of this form of compensation is associated with satisfaction and tenure in tipped occupations, so there is value in correctly anticipating who will and will not like working for tips. Although research into the causes and predictors of worker attitudes toward working for tips is limited, it is possible to identify numerous pros and cons of tip compensation from a worker perspective. A greater upfront understanding of those pros and cons of working for tips would obviously benefit prospective workers by helping them to make better decisions about whether or not to seek and accept offers of tipped work. A more complete understanding of those pros and cons would also benefit managers of tipped workers who could use it to better evaluate the suitability of applicants for tipped work and/or could share it with job applicants to improve their self-selection into and out of the job. Accordingly, the current managerial perspectives article seeks to help managers by enumerating and discussing the major pros and cons of working for tips.