How do you distribute your Tip Pools? We’d love your input on our new tip pool distribution feature!
Buckets full of (electronic) Cash!
Restaurants have always collected a Tip Pool for the Kitchen staff, and every week or two it gets distributed to the hard working crew in the back of house. The pandemic has forced the industry to rethink their method of operation and so we are also seeing an increase in Tip Pools being collected for front of house staff. Management is now handling the collection and distribution of thousands of staff dollars in multiple buckets.
This was all once done with cash. Remember cash? That’s a historical relic now; most transactions are electronic. Restaurants have been forced into acting as a bank for their employees. Most operations now find themselves routinely going to the bank to take out thousands in cash to distribute tip-out to their staff. Is this you?
Management and distribution system for tips should be electronic too. Managers need simple tools that accurately and quickly manage tips and their distribution, and it shouldn’t require regular withdrawals of gangster stacks of cash. We need to solve these problems while also building trust with staff, who want transparency in how their money is distributed.
What's your tip distribution formula?
K.I.S.S. (Keep It Simple Stupid)
The simplest and most common method is by hours worked. If you distribute tips weekly a staff member’s portion would be their hours worked (x) divided by the total hours worked by the whole crew (y). Are you using the simplest solution?
Spreadsheets are fun!
It’s tempting to make things more complicated. Perhaps the crew that works a busy Friday night deserves a bigger cut than the Tuesday lunch bunch. This method requires you track tips by the day or shift that they are collected. The math is essentially the same, except now you are doing the calculation each day. More complex, but easily accomplished with a spreadsheet, although it is more data for the manager to collect and harder for staff to understand. Are you using a hybrid method to fine tune tip distribution by day or shift?
If you really want to feel in control, maybe you add an “x-factor” into your tip distribution system. Perhaps the experienced line cook deserves a bigger cut than the pimply faced dishwasher. In addition to hours worked we can introduce a new variable, an “x-factor” that is also applied to the tip distribution math, like maybe an “experience level”: leader, staff, trainee. Do you have a variable other than hours worked that you use to distribute your tip pools?
You in or out?
Some include management (salaried) staff in the distribution of tip pools and others exclude them. How about you?
Let us know how you do things and we might build you a special tool in BlackFox to help out. Either way, we will happily share what we find out about how everyone is handling this rapidly changing landscape.Apr 12