What's in a Tip? Answers From the Bartenders and Hair Stylists Who Serve You

A Lehigh University political scientist got surprising responses in her quest to unravel one of life's great economic mysteries

BETHLEHEM, Pa., Dec. 6, 2010 /PRNewswire-USNewswire/ -- What's in a gratuity? Is it a reward for good service? A bad way to redistribute wealth? Or a complex social lubricant, easing an awkward relationship?

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All this and more, says Holona Ochs, a Lehigh University political scientist who interviewed postal workers, bartenders, strippers and even prostitutes—more than 425 tip-earners in 50 occupational categories, to get their views on tipping and compensation. With the results, she co-authored "Gratuity: A Contextual Understanding of Tipping Norms From The Perspective of Tipped Employees."

"We found that tips are generally a weak signal of quality of service," said Ochs. "People appear to tip rather for social and emotional reasons. In other words, we tip because we care about how others perceive us.  And we tend to tip better those who meet our social expectations."

Ochs' interviews revealed that:

• Tips are a price set almost entirely by the customer and less connected to the economics of demand than to social code, making it a controversial, confusing, and highly variable social norms.
• With all the confusion in America over how much or when to tip, or how little we understand about how this unregulated form of commerce financially or emotionally compensates an employee, more than 90 percent of Americans tip.
• Customers appear to conform to tipping norms for social and emotional reasons, rather than rational ones—such as good service, a bonus, or as an incentive.
• Tips don't necessarily signal the quality of service received.
• Therefore, tips don't serve as an effective monitoring tool for management because they don't reflect quality.
• In fact, tip recipients use tip amounts to make assumptions about the tipper rather than interpret the tip as a reflection of the quality of their service.
• Servers make plenty of assumptions about tipping and act on them. Servers in the U.S. often assume that foreigners, kids, and the elderly are less likely to tip generously. Servers reported being more likely to spend less time or focus less on providing the highest quality service to those customers.
• The amount of a tip does not appear to increase in accordance with perceived social inequality. Such "Tipper Bias" creates a misguided redistribution of wealth. For example, customers are more likely to give a higher tip to an affluent college student waiting tables than a single mother working in a family restaurant.
• Therefore, tips don't consistently and accurately redistribute wealth.
• Furthermore, tips don't alleviate the social discomfort from the tipped employees' point of view.

Holiday Tipping

• Would a holiday tip be a slap in the face? "The holidays are a good time to show our appreciation for people in our lives who help us get our work done," said Ochs. "With that in mind, if we're motivated by tipping as being a redistribution of wealth, it's more likely a gratuity and not a demonstration of status. Tipping in this situation would be perceived a gratuitous act and not an indicator of status that may create an awkward relationship."
• Nannies, housekeepers, and dog walkers get few tips during the year other than the holidays, and even postal workers report receiving gifts.  Sanitation workers and teachers say they are likely to also receive a holiday gift.
• The typical combined holiday gratuity a worker receives is up to one week's salary.
• The standards for holiday tipping are especially discretionary and are transmitted primarily experientially.
• Holiday tips are still considered a matter of etiquette, but in a society as diverse as the U.S., conventions may conflict. For example, the failure to tolerate religious diversity in the U.S. is considered a social faux pas, so the custom of holiday tipping is less consistent because the major holidays are quite variable.

About Holona Ochs

Ochs is an assistant professor of political science at Lehigh University and a researcher in policy, public administration and the mechanisms by which governments and other authorities facilitate mutually beneficial relationships built on trust.  She has co-authored two books on nonstandard compensation systems in the United States, "Gratuity," and "Getting a Cut: A Contextual Understanding of Commission Systems." Ochs has published research on social justice and governance in journals including Justice Research and Policy, Journal of Public Affairs Education, Policy Studies Journal, Social Science Quarterly, American Politics Research and Public Personnel Management.

SOURCE Lehigh University