Tip Boxes

Over the last 4 years that I have been in Asia, I have noticed the emergence of tip boxes at cash registers in small cafes and coffee shops. I feel like this is a shame since the local cultures have not traditionally encouraged tipping; instead, salaries were (supposedly) designed to compensate employees fairly, and service charges are automatically built into the bill so employees (theoretically) still get some reward for the amount of work they do. What I always appreciated about the “no tipping” culture as a consumer was that whatever price was quoted to me was what I would pay, and I never felt compelled to find just the right amount of extra cash to share with the employees, especially when I ordered at a counter. That, however, seems to be changing.

Recently, though, I was in Singapore, and at one coffee shop I noticed a sign on the tip box that read “Thank you for rewarding any exceptional service you receive. Our management has committed to match every dollar that is contributed to the tip box.”

Now, this is something new. I have never heard of management matching tips before. I don’t know what the rest of their compensation scheme is like, but I do know that this concept is pretty unusual, and to me it says that management is putting their money where their mouth is when it comes to encouraging quality service. They expect their employees to put forth some extra effort, and the leaders are committed to supporting that rather than merely paying lip service to it. Extra effort should help encourage repeat business, which boosts revenue, and management is rewarding employees for their contribution to this long-term goal. It is an interesting concept that other businesses should consider.

Now, most jobs do not involve tipping, and I am not suggesting you should start passing around a tip box when you invoice the clients of your graphic design firm or software development company. When the day comes that I see a tip box next to a bank teller, that’s the day I will change banks. Instead, the lessons to take away are, first, to be innovative in how you compensate your employees, and second, to follow up rhetoric with real action.

When it comes to compensation schemes, it can be tough to figure out the best one. We often default to seniority, but that does not necessarily compensate the people adding the most value to your company as well as they should be compensated. We might pay people based on the education and experience they bring, but again, just because they are well-schooled does not always mean they are contributing the most. As you try to figure out the best way to compensate your employees – and compensation is a key factor in retention in many Asian countries, so take the opportunity to reevaluate your compensation program now as the economy and the talent market are evolving – try throwing out your assumptions about how compensation “should” be done and instead try to find a way that really fits your industry, your firm, and your workforce.

Consider, too, how that compensation method can express your commitment to certain goals, and to the values that comprise your organizational culture. One thing that always bothers employees in every field is when their leadership says one thing is important, but then they reward something else. Use compensation as one way to demonstrate what behaviors and effects are really important to you as you lead your employees.

I am still not thrilled to see tip boxes popping up in Asia, but if they must exist, then at least they have some extra importance.