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| Hey, how much d’ya wanna leave for a tip? Ah, 15 percent or double the sales tax or 20 bucks, the service was outstanding! Probably some of the most frequent mutterings heard in restaurants and private clubs throughout the country. |
| Usually how much depends upon our perception of the service and the offerings. Ah, that word perception again…what was our perception of the service, how good was the meal? What really is your policy? Is tipping allowed, or isn’t it? Does it happen anyway? Does tipping really affect the perception of your club, or how others view your country club? For some, obviously it does and for others not so! |
| And that perception in some situations means a policy of “no tipping,” or in the case of the Country Club of North Carolina, a new “no tipping” policy, proposed by the club’s vice president, beginning in January 2004. |
| “It’s what we’ve talked about for years, that it would be so nice to not have to worry about ‘no cash exchange’ whatsoever,” relates Ashton Harris, club manager of the country club near Pinehurst, NC. The club hasn’t had a policy on tipping and “that means there is tipping for some services and not necessarily for others. We don’t encourage any tipping anywhere in the club; it’s something that just happens, “ like at the golf bag drop, when clubs are cleaned, the locker rooms, shoe shine area and valet parking as it does with many other clubs around the country. |
| So why the new policy? The perception of the club’s reputation! |
| “The whole idea is that it will further enhance our reputation as a fine club. It’s more focused on the perception of our club, “ said Harris of the policy that’s been approved by the board of directors. “I think it’s an effort by him (our vice president) to further enhance the reputation of the club. That’s his intention. Also philosophy-wise, it would better to spread service for everybody, because naturally if you work the bag drop and there’s a member who comes in and gives a couple of dollars, are you going to be motivated to give better service, as opposed to someone who doesn’t leave a tip.” |
| Well, whatever your thoughts about tipping or the perceptions it creates, reputation is not necessarily an argument everyone buys. Take Norm Spitzig, for example. |
| “Personally I always thought the ‘tipping in the private club environment’ was a straw man issue: a lot of strong opinions and arguments both for and against something that, in the pecking order of private club issues, is a relatively inconsequential one. Having said this, I’ll vote for tipping over no tipping any day of the week,” said Spitzig, MCM, principal and senior partners in Master Club Advisors, a full-service executive search and consulting firm to the private club industry. Spitzig also served as general manager for nearly three decades at private clubs in Ohio, Indiana, Minnesota and Florida. |
| “Those who object to tipping as ‘unclublike’ argue that those who tip will get better service from the club staff. Well, duh, of course they will. That’s human nature – and why people tip in the first place! (I know it’s hard to believe, but those in the ‘non-tipping camp’ include all the cheapies who probably shouldn’t be club members in the first place. All their pontificating about how tipping is ‘inappropriate’ at clubs is illogical at best and, more than we all would like to admit, a disingenuous ruse by marginal members.) |
| “So, their old argument goes, let’s eliminate tipping so all members get the same level of service. More often than anyone cares to admit, these clubs get exactly what they ask for - the same mediocre, lethargic service from everyone on the staff,” opined Spitzig. “It reminds me of the current, politically correct trend for public schools to eliminate programs for gifted students and pay incentives for teachers who objectively perform as ‘unfair to everyone.’ The reality of the matter is that, in both of these cases, everyone descends to the same level of mediocrity. Wonderful. |
| “Worse yet, there are a good number of clubs that practice the overt hypocrisy of allowing some employees to be tipped and others not to be. The logic for this double standard includes patently hollow arguments like ‘it’s always been that way.’ or ‘the bag groom valet people just expect to be tipped.’ I can assure you that good general managers have a tough time buying such superficial logic and, tougher yet, ‘selling’ it to everyone on their staff. Presuming that the people who work on your behalf are stupid isn’t a very smart idea,” he bluntly observed. |
| Still, changes are happening at other locations as well. LaGorce Country Club brought in a no tipping policy in October says Ralph Pecca, CCM, GM and chief operating officer of the Miami Beach, Florida-based club. “It is meant to be a refreshing approach toward providing the membership with equal individual attention with the staff’s emphasis on ‘pride of service,’” the club said in a policy statement sent to members. |
| The club is pretty emphatic in saying the fees and charges are set so the club can establish an “excellent reward oriented pay scale for staff members. Staff does not expect additional tipping from members and staff is not permitted to accept additional tips or gift offerings. At the same time the club is asking members not to offer additional tips. |
| In its place, the clubs asks members “to support the annual holiday bonus program which, excepting the management, is shared by the entire staff,” Pecca related. For this program to be successful, Pecca says the “cooperation of all members is necessary” and that it’s important for all to understand “that superlative service is to be expected at La Gorce.” |
| The experiences of Elaine Webb, CCM, GM at the Rye Beach, New Hampshire, Abenaqui Country Club have gone from services charges to tipping and back a couple of times. The flavor right now is “gratuities” for a la carte services. |
| “After using the service charge for several years, we found the incentive was not there for staff,” she related. “Members wanted to leave a gratuity to reward good service. And last but not least, the service charge was taxed eight percent. We’re very happy with the system now and the bonus is that payroll has gone down,” Webb added. |
| She says the majority of the membership is happy with the change and that it doesn’t change the perception of the club “with the exception of a few who are members in very high end clubs. |
| “Our service has improved and we can now hire first quality and motivated staff with the tipping policy.” Although there are members who have their favorites, the “seating in stations does not allow much of that to go on. We have a couple who make a lot of money but they are superior in service and earn that extra. We do not allow servers to ‘greedily’ take more tables than they can serve well,” Webb stressed. |
| The pattern is long established at The Beach Club in Santa Monica, CA…it’s no tipping and has been in place since the club’s founding in 1923. A 15 percent mandatory service charge is applied to all food and beverage purchases. This money is placed in an employee “service charge pool” for distribution to employees who worked during the pay period and it’s based on position and hours worked during the period when the money was collected. |
| The ‘no tipping’ policy is based on a belief “that preferential treatment is either consciously or unconsciously given to those who tip and that the highest preference is given to those who tip the most,” said Beach Club GM Gregg Patterson. “Since our club believes in an egalitarian philosophy – that is, everyone within The Beach Club community is a member, equal and entitled to comparable attention, service and consideration – tipping would be inconsistent with our core values.” |
| Patterson suggests members have endorsed this philosophy over time and the principle is “so engrained in the culture that doing otherwise would shock and offend the vast majority of the membership.” |
| “The employee team is very happy with the service charge format and the organization of its distribution,” Patterson added. “The system is transparent, explainable and fair. |
| “Since tipping is not allowed, members don’t receive preferential treatment. The biggest tip, however, is being treated with respect, dignity and consideration by members. Those who are big “dignity tippers” probably receive extra consideration from staff.” |
| So either way, what’s the fallout for clubs? As Webb explains, with tipping the payroll for Abenaqui Country Club dropped, servers works faster and more efficiently and the club can hire first quality, motivated staff. |
| On the other hand, Patterson says, “club employees should have service genes and a passion for the club community. Money,” he says, “doesn’t motivate great employees – genes do. Our members seem to recognize they’re getting the attention they get because the employee and management teams care about their happiness. Those with the service gene are intrinsically motivated by their commitment to caring. Extrinsic motivators, such as tipping, seem hollow by contrast. Club service staff distinguish themselves for that very reason.” |
| The policy Patterson says “discourages some employees but attracts others. The employees who want ‘cash without taxes’ go elsewhere. Those who want fair compensation and an opportunity to serve in a more personal way are attracted to our club. Those who stay love the system. Those who leave take their feelings with them,” he observed. |
| How easy will it be for the Country Club of North Carolina to make the change? Even though it’s being done for specific reasons, “it may be easier said than done,” manager Harris agreed. |
| The club’s board has declared employees will not lose any money, and in some cases this may mean pay increases to replace the lost tips. However it’s done, the policy is going to cost the club more in employees’ wages. Harris says the club is in the final stages of making decisions on how the funds will be raised to make up the difference, and may include service charges, different locker room packages and perhaps some guest user fees. |
| “We’re anticipating this will cost about $90,000, but the board is not anticipating that this dollar amount will be paid by any dues. Our game plan is to have 2004 as a training period with a zero tolerance policy beginning in 2004,” Harris said. |
| There are some employees who have been with the club for 18-20 or more years, however, Harris is confident the employees will be compensated well enough that they will want to remain with the club. In fact, it may mean compensation for a particular long-term employee exceeds that “justifiable for the responsibility of the position.” Because of the value and experience of the employee…and “ because their wage has exceeded the range, the club is willing to accept that because of that employee,” Harris maintained. |
| We have a very low turnover in staff. A good benefit package, for both part time and full time staff, the environment, the culture and the membership are all draws for staff,” he related. |
| So as clubs across the country ponder “tipping-no tipping” policies, Spitzig offers this advice. |
| “If you must eliminate tipping (because you are one of the relative few who, for honorable reasons, believes that it is ‘just inappropriate in the private club environment’), do it. (As I said before, I don’t think this is the “life and death” issue some people like to make of it.) Just be sure that your club’s management team has the authority, talent and interest to develop and implement procedures to insure that the best members of the club staff have an opportunity to substantially outearn those who are not. A “pat on the back” is always nice – truly – but more cash is better for the bills.” |
| Publisher's final thoughts |
| So there’s a variety of opinions and that’s not unexpected, but it all comes back to the fact there two forms of tipping used at clubs across the country…either voluntary tipping where members tip at their discretion, or the second in which the club adds a service charge. My preference is the service charge. Clubs are different from restaurants and other locations where tipping is in vogue. Members sign their bills and the addition of a service charge is definitely a convenience for members. In my opinion it is imperative to take away the potential of employees providing better service to members who have reputations as good tippers. In a private club, all members need to be treated equally. |
| At least, that's the way I see it! |
| What's your opinion. If you wish to respond to the Publisher's Perspective, or other BoardRoom articles, contact Publisher John G. Fornaro by email at john@apcd.com. |
| John Fornaro Publisher |