A Las Vegas casino recently changed its tip policy for its table game dealers. The individual dealers now keep half of the tips that they personally receive from players, and the other half go into a tip pool that’s shared equally among all the dealers. I’m not sure how that policy change is working out.
Having been a tipped casino employee decades ago, I certainly have some thoughts on the topic. I was always in the top 2% of tip earners in whatever casino job I had, because I always gave great service and made sure my customers had fun. And I hated whenever I had to share my tips with fellow employees who had bad attitudes, put in minimum effort, and didn’t give two hoots about the customer.
There are three perspectives on tip policy: those of casino employees, casino management, and (the often-forgotten perspective) casino customers.
Good casino employees always prefer to keep their own tips. Bad casino employees (and those on the slower shifts and in low-limit sections) usually prefer pooling tips and being carried by the better tip earners in the busier sections.
Casino management typically prefers casino employees to pool their tips. It gives them more flexibility in scheduling without charges of favoritism by tip-earning employees. It creates more accuracy and standardization in tip disbursement and accounting, especially with government agencies. And truth be told, it allows management to keep a cap on how much in tips an employee can make, as in many situations tipped employees keeping their own tips can earn more than supervisors or managers, creating a disincentive for good employees to progress into management.
It may seem that casino customers don’t really care what the casino’s tip policies are, but trust me, they do. They enjoy tipping employees who provide them a fun exceptional experience. They’re disappointed when they learn that their generous tip to a great employee might have to be split 20 ways (or more), especially when it goes to the “lumpy” employee who ignored them earlier.
My fervent belief is that every casino employee everywhere should personally keep their own tips. Very few now do. Casinos claim it creates scheduling, accounting, and perception-of- fairness issues. They say that some employees will “rough hustle” customers for tips, that they’ll have a bad attitude on slow tip nights or, conversely, have a great tip night and want to go home early. Or sneer at customers who don’t tip much or not at all. I say get over it. One of the best things casino management can do is connect tipped employees better to the fruits of their labor and be better paid for providing better experiences to guests.
That’s not to suggest that changing a longstanding casino tip-pooling policy into a “go for your own” one will be without its challenges. But here’s a step-by-step plan on how to do that and what you can expect when you do.
- Let all your tipped employees know why you want to change the tip-pooling policy and why you think that would be better for them, the customers, and the casino.
- Ask for the employees’ input and buy-in for the changes. Have them help you identify all the potential challenges to the changes and how best to overcome then. Answer their many questions.
- Be sure to make it clear that the new policy will have zero tolerance for employees who rough hustle customers for tips or who treat non-tipping guests any less well.
- By whatever objective metrics you have for measuring who your best employees are (amount of tips should be a new criterion!), use them to allow your best employees preference to choose their shifts, hours, or work sections where tips will be generated. Add a system for improving employees to move up in their “tipping hierarchy” and declining employees to move down. Create a training program for all employees on how to generate more tips through great service and improved focus on guests.
- Communicate to customers what the new tipping policy is and why it’s being implemented. Ask for their feedback on how it’s working and if they see anything that could be improved.
- Post signage throughout the casino where employees have tip-earning opportunities. My message would be something like, “XYZ Casino encourages our customers to tip generously for employees who provide truly great service.”
- Monitor the new “keep your own” policy diligently and make needed adjustments as necessary.
Now, for those of you who say this doesn’t seem fair (what’s not fair about your best employees earning the most tips?), or it’s too tedious to implement and supervise, or the owners, tribe, or senior management would never allow it to happen, I can only say look at the results. And here’s what will happen.
Top tipped employees will earn a lot more money. Lagging employees will either have to accept making less tips, step up their game, or find another job where providing great service isn’t such an absolute and enforced mandate. Great employees from competitors’ casinos or other service businesses will want in, addressing that never-ending challenge of finding good employees in a tough labor market. Morale will go up. Guest service will dramatically improve and great guest interactions will become the norm, not be the exception. All by letting your employees keep what they have fairly, diligently, and skillfully earned.
Then if “no tax on tips” becomes more than a pipe dream or an empty promise, well, that will become the icing on the proverbial tipping cake.
