Earls.67 tests mandatory 16% tipping system
Move designed to reward staff more equally
More than just the decor has been revamped at the Earls.67 location in downtown Calgary.
The Stephen Avenue location — which re-opened Friday after undergoing renovations — is also changing the way customers tip.
Rather than the traditional method of leaving a little something after paying the bill, customers at Earls.67 are being charged a flat 16 per cent hospitality charge (before tax) which will be shared among all the staff.
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To explain more, Craig Blize, VP of operations for Earls Restaurants, spoke to the Calgary Eyeopener.
Why are you doing this?
We're doing tipping because the restaurant industry is evolving. We want to test this to gain information and knowledge to see if there's a different way to reward and pay our employees.
What does a 16 per cent hospitality charge ensure?
It ensures a great guest experience, not unlike what we were doing before ... In the current model, 80 to 90 per cent of the tip goes to one person which creates a disparity in the hourly wage from our highly trained cooks, all the way to our servers. So in this model, a 16 per cent hospitality charge offers us the opportunity to redistribute that compensation in the form of higher, consistent wages. We're going to see if it promotes teamwork, engagement, and if that does, it should result in a greater guest experience.
Does the current system of tipping discourage teamwork?
No. The restaurant industry, as everyone knows, is built off teamwork. All we're doing is seeing if a different compensation model would promote teamwork and engagement at a higher level.
Now that there's a flat 16 per cent charge, what's my incentive to go that extra mile if I'm a server?
Now there's no pressure on the server to pick up tables or fight for tables. They get to support each other in ensuring that guest experience is there. The entire 16 per cent hospitality charge is going back to them so they're still rewarded on performance and their level of guest satisfaction will be rewarded as well — either through more hours or more shifts.
Do you tip for good service?
I find that I'm generally an X per cent tipper. I tip that percent every single time ... and research has been done through Guelph University that most customers are the same way. We like to believe that we tip less or more based on good or poor service but generally the majority of the population is the same.
A tip is usually at the discretion of the customer to reward good service, how do customers do that now?
The tip, for them, would be to come back and have a repeat visit and sit in that server's section and be served by that server once again.
How is the upcoming move to a $15 minimum wage in Alberta playing into this tipping strategy?
Because of Earls.67 being a prototype, allowing us to test new ideas and whatnot, this would be tested regardless and it's not only Alberta, but we do business in the United States so this will give us some good information and some great knowledge around a new compensation model if it works.
Are you doing this elsewhere in the chain or is this unique to Calgary?
This is unique to Earls.67, so Earls.67 just launched on Friday as a prototype Earls. It's our first prototype that we get to test these new ideas and gain information and knowledge.
What kind of feedback are you getting from customers so far?
So far, great. It's early on, it's Stampede right now in Calgary so everyone is very happy and enjoying the new design and the environment we've built. The best signs we think are happening is that over the last couple of months, we've hired 280 partners. If we couldn't hire 280 partners under this model, we wouldn't have been able to launch it. Because they've joined us and they're happy to be in this environment and they want to explore it and see if it works for them.
When will you decide whether or not this is a success?
We've decided six months. Six months is going to be our test. We basically wanted to get through the Stampede and summertime then downtown Calgary, September through October is a good testing period, but then we wanted to get through Christmas as well, so six months for us is a perfect test.