The Pros and Cons of Tip-Pooling: From A Server’s Perspective

Tips - Really the main reason any of us work in a restaurant, right?

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Being able to hustle for tips and make (great) money is a massive part of the restaurant industry and overall hospitality culture.

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Over the past few years, and after moving to Los Angeles, I’ve noticed a shift from regular, old-school tip-out structure to a more streamlined tip-pool, where everyone is making the same money.

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In this article I am going to highlight the pros and cons of a tip-pool structure from the perspective of a waitress who has worked in many different restaurants with many different tip structures.

The Cons

I am going to start with the cons, because honestly I don’t really like working in a tip-pool. I don’t think that many people do, unless there are perfect circumstances (see the pros list a little further down!). 

Good workers share, poor workers steal 

The number 1 con of a tip-pool is having to share tips! For restaurant workers who highly value the individualistic nature of the work (your section, your tables, your guests), not being able to rely on the money you make during your shift being in your pocket at the end of the night is a let down. 

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Of course there is also the added heartbreak of having to share your tips with team members who don’t seem to work as hard during the shift.

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While you are hustling, prioritizing and calculating your every move to make sure you don’t get behind and that your guests are having a great time, they are in the service well drinking their fourth sweet tea and asking if you can help greet their tables. Of course they’re not going to make as much money as you, they aren’t as good of a server/bartender/host.

You lose the need to hustle

In my experience, tip-pools have taken away my ability to control how much money I walk with (or whatever bit of control I felt like I had) which made me less willing to hustle, and probably just a less-fun version of myself. No one wants that.

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If you haven’t already figured this out, hustling is a HUGE part of being a server/bartender/restaurant team member of any kind! As a manager, keep in mind that if you are going to implement a tip-pool structure, a lot of your team members will be disheartened by losing the feeling that they get from counting their money at the end of the night.

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That’s a good segway into my final con of tip-pools, which is poor management.

Poor management = sunken ship

I am going to speak to my bias here, which is that I have yet to work for a manager or team of managers who was able to successfully lead a team using a tip-pool. Don't get me wrong, I think it can be done,  I just have yet to experience it.

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Poor management of a tip-pool culture looks like this:

• No communication about tip-pool, not sharing team members on tip sheet or explaining how it works.
  

• No regulation or consequence for team members who are taking advantage of the system. It’s not hard to see, don’t ignore the dead weight just to avoid conflict.
  

• Leading a team of mediocre workers because none of them feel value from their work, or feel like they aren’t making enough money. “I’m not going to do that extra thing, I only made $50 yesterday.”
  

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If you are going to switch your team from a tip-out to a tip-pool structure, ask yourself why? And also ask yourself if you and your management team have the resources to manage it in a way that puts your team ahead, not behind.

The Pros

Despite sometimes feeling let down in a tip-pool system, I did find some parts of it to be helpful!

Ability to transfer tables

The thing I liked most about working in a tip-pool structure was the ability to transfer a table to another server/bartender without worrying about losing the money. This really made things simpler when it came to switching sections or ending a shift.

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No one wants to have to wait around forever for a table to close out just so you can get the tip and go home. In a tip-pool, you can transfer the table to another server and clock out. As a manager I definitely see the benefit of this when it comes to regulating labor and hours.

Consistent money, even if it’s less

In my experience, working in a tip-pool meant more consistent money. I always kind of knew what I would make each shift, even if it was less than I was making on my own. When we’re talking about quality of life, this was actually a bonus, I felt like I had a real grown-up job where I could actually u=budget, plan, etc.

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One of the things that people don’t like about working in restaurants is that the money isn’t always the same. Of course these numbers depend on your venue and business levels, if no one’s making money then a tip pool doesn’t change that. However, if your venue is regularly busy, you might find that your workers see consistent paychecks.

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Good management = positive culture

Like I mentioned earlier, I have yet to experience or witness top-tier management of a tip-pool structure. If I could paint a perfect picture though, this is how I imagine it to go:

• Open, clear communication about the numbers. Use a shared platform like google sheets or a bulletin board to post daily numbers and breakdowns. Answer questions clearly and with urgency, this is your team’s livelihood and it’s important.
  

• If someone seems to be taking advantage of the tip-pool, manage it. Talk to that person, guide them in the direction of change you want to see. Give them the opportunity to change, and if that doesn’t happen, let them go. The rest of your team will thank you.
  

• Leadership! A tip-pool is designed to make the team function as just that, a team. And every good team needs a leader. Get creative with how you show your team that you value them, or give them extra opportunity to grow. Losing any type of financial compensation is risky, so make sure your team knows how much you value them.

Do I think it can be done? I know it can be done!

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If you are considering a switch to tip-pooling, or are already using it, take some time to put these practices into play. Your team and your customers will thank you.