What Servers Think of Alternative Restaurant Management Models

By: Dahlia Snaiderman

10 Minute Read

Jul 11, 2019

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How many times have you watched your best server walk out of your restaurant in search of greener pastures and bigger tips? 

Being a server can be grueling and rewarding, in equal measure. Servers walk miles every shift while balancing trays, connecting with guests, delivering food, cleaning up spills, placating screaming babies, remembering allergies, rolling silverware, shining wine glasses, and keeping the manager in the loop about major issues – all while keeping a smile on.  

Servers, like the rest of the restaurant industry, have a high turnover rate for many reasons. Even minimally experienced servers know they can get another job elsewhere, no problem, maybe even the day after leaving a job. If they’re not getting along with a manager or are sick of serving a particular clientele, they can find another job that may be more lucrative without much effort.  

“If I do a better job, I'll make more money. If I try a little bit harder, there’s no ceiling for me. I can find a better restaurant to work at and keep moving up as much as I want to,” says Gabrielle Grant, who worked in the restaurant industry, both front and back of house, for over 10 years. “As a server, I'm in control of that. When you’re doing well, it’s really awesome.” 

For over a century, restaurants have relied on the tipping system and a hierarchical employee structure to keep the doors open and the food on customers’ tables. It’s one of the only industries where employers rely almost entirely on guests to pay half their staff’s wages. 

With such thin profits in such a precarious industry, many restaurateurs have been too scared to try out alternative ways of running a restaurant. Diners have also expressed that although they support restaurant staff getting paid more, they still struggle with higher menu prices, which is one of the most common ways for restaurants to increase wages. 

But there’s a lot that can be done to make your restaurant a rewarding, engaging place to work. Some restaurant management models require an overhaul of the books, but others can be tried and tested before taking the plunge. 

Resource: Download a Free Course on Hiring the Modern Workforce

Try Open-Book Management and Share Your Finances

Mei Mei, a Chinese-American restaurant in Boston, runs on the open-book management model, meaning that managers and owners share the details of the restaurant’s finances – like profit and loss statements – with their whole staff. The theory is that doing so empowers staff to realize that their actions, and their choice to work as efficiently as possible, have an impact on the business. Like many other open-book management operations, Mei Mei also has a revenue- or profit-sharing program as a way to incentivize employees to make changes to increase profit for the business. 

Aidan Dunbar, a server at Mei Mei, said in a blog post on Mei Mei’s website that he appreciates how management is “open and transparent about how things are done, and showing me the whole picture, which makes everything just much clearer.” He also likes working “at the kind of place that would invest in its employees.” 

In Somerville, MA’s Union Square, Juliet Restaurant also runs on a profit-sharing, gratuity-free, open-book management model. Server Sam Mangino says that it’s empowering “to talk about periods and overhead and cost of goods and labor costs.” She added that “to know not only what those numbers are but what they mean is really huge.” 

“We have a lot of people who are working at Juliet who don't necessarily want to work in restaurants long-term, but they're there because they can learn about the numbers, they can learn about our business model and they can learn how to run a business,” she continued.

We have a lot of people who are working at Juliet who don't necessarily want to work in restaurants long-term, but they're there because they can learn about the numbers, they can learn about our business model, and they can learn how to run a business.

Sam Mangino

Server, Juliet

Heather D., a server who has been in the industry for 15 years, has never experienced open-book management in a restaurant. "The only [financial] insights the companies I’ve worked for have given are goals in sales and whether we met them or not," she said. "At the last restaurant I worked at, the general manager was pretty open with the employees about how expensive it was going to be to put in new flooring, new blinds, and new booths, but not much other insight was given on profits, cost of goods, and expenses. Occasionally we’d be told about the price of certain food items to stress the value and to help us sell them."

Build Giving Back to the Community Into Your Business Model

Hannah Foster is a server at The Roost, a Longmont, CO restaurant with a specific mission. It was started by Sean and Rebecca Gafner as a way to support their NGO, The Rooster Party, that funds adoptions. 10% of all gross sales at the restaurant go towards supporting adoptions in their local community — there’s even an adoption funding request form on their website.

Since the restaurant uses a POS that tracks sales data, Foster actually gets to see how much is being given to the community and how small transactions add up. “A lot of people come in just specifically because they are giving back to the community, so that's pretty cool,” she said.  

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Don’t Cut Servers on Slow Days

In most restaurants, a slow shift means cut servers, which means some servers who got ready and came in to work have to leave early without making much money for their troubles. This is typically done because it can be expensive to keep servers “on” if there aren’t enough customers to warrant their presence. The restaurant would also legally be required to pay the non-tipped wage minimum wage to these employees.

At Juliet, though, there are no forced cuts. “We always have the option of whether or not we want the night off,” explained Mangino. “We're never told we're going to get cut. So if we have a really slow night, the option is we're going to do a lot of cleaning or one of you can take the night off – and there are some days where I'm like, ‘I'm so tired. I do want this night off.’ So at least if I'm not getting a day’s worth of pay, I I get to make that choice on my own.”

Resource: Online Restaurant Scheduling Template

Toy With Tip-Free or Try Tip Pooling

The idea of eliminating tips doesn’t appeal to many servers, because tips can make for a hefty, if somewhat unstable, income. Former server Amanda McNamara recalls walking out of a shift at a family-friendly sports bar with over $1000 in cash on a game day. 

Gabrielle grant square

When she was a server, Gabrielle Grant thrived on the energy of the chase – she says that when working for tips, her only job was to make sure every customer was happy, and if she did a great job, she received instant recognition for it. “Servers and bartenders know what they’re getting themselves into. They chose this job. If I sign up for a job knowing how I’ll make money, that’s on me,” she said. 

In DC, where Grant is from, there was a 2018 ballot initiative to phase out the tipped minimum wage, called Initiative 77. She says her community was largely against it. “You would be walking down 14th street, which is a super busy street for restaurants, and it was all 'vote no, vote no.'”

Hannah foster square

Hannah Foster, of The Roost, doesn’t feel particularly strongly about the idea of working in a gratuity-free environment especially if the hourly wage was good. “I guess it probably wouldn’t be that bad, but I just don't know of any places that do that. Especially here in Colorado,” she said.  

Zoe carlton

Zoë Carlton was a server for two years, and she said she would only consider working in a gratuity-free environment "if the wage matched the tips [she] made." She has left the industry, but it wasn't because of what it felt like to work for tips, she explained. It was more due to the drinking culture.

McNamara says that long-time servers have honed the craft of earning money through tips and they may not want to risk giving that up. “People who are career front of house are absolutely amazing when it comes to showing genuine hospitality and also at getting the tip as a reward,” she said. 

However, McNamara does see the benefit of going tip-free. If one of the restaurants she worked at announced they were overhauling the system and eliminating tips, she said she’d stay to see it rolled out. “I would have just been very curious because most restaurants don't do that. I think that it’s very revolutionary and I think that it's a shift in thinking from short-term gain to long-term gain,” she explained. 

Amanda

“The way the tipping structure now exists, it's all about short-term gain. You work hard, you get your money right now. Whereas a salaried or fair hourly structure with benefits gives you more of a long-term gain. A paycheck may be coming in a week and a half [instead of on the same day], but you also will be able to make that go further. And the same goes for benefits: They may not come into play right now, but they do when you're sick, they do when your car breaks down, or when your kid gets sick.”

Katie Rosengren is a general manager at Juliet, and she used to work as a server in tipped restaurants. She realized the flaws in the system over the years. “You could have an off day, you could really mess up a table or feel like you really did a bad job and someone will still tip you 20%, which is great and wonderful. Or you could be so on, do every single thing right, by the book have done a perfect job, and still get a 12% tip because it really doesn't matter. People know what they think is fair to tip and that's what they're going to tip regardless of what you do. And when you realize that as a server, it's pretty defeating actually.”

You could have an off day, you could really mess up a table or feel like you really did a bad job, and someone will still tip you 20%, which is great and wonderful. Or you could be so on, do every single thing right, by the book, have done a perfect job, and still get a 12% tip, because it really doesn't matter. People know what they think is fair to tip and that's what they're going to tip regardless of what you do. And when you realize that as a server, it's pretty defeating, actually.

Katie Rosengren

General Manager, Juliet

She explained that serving in a gratuity-free environment actually pushes servers to give better service – as counter-intuitive as that may seem. “[In a tipped environment,] there isn't really an incentive to do a better job. Whereas if you work in a structure like we have, where you're paid by your employer and when you do a good job, you get profit sharing because you increased the revenue of the business or you get promoted because you've done a good job. It's such a better and healthier environment to work in.”

Her servers agree. Sam Mangino says that tipping incentivizes servers to be more hospitable to tables that may be spending more money – but at Juliet, everyone gets the same hospitality.

Sam mangino

"At Juliet, our owners and the management team are really, really clear about what our hospitality standards are. You just go to every table and you provide them the Juliet hospitality, no matter who they are, no matter how much money they're spending. When I go to a table at brunch where someone is having a $20 meal versus someone who's coming for our three- or five-course meal, I go to that table with the same sort of hospitality. Because it doesn't matter."

Mangino added that the front- and back-of-house divide is nonexistent at Juliet because of their lack of tips. “I will say our dynamic between front of house and back of house, at Juliet, since none of us are working for tips, feels a lot more equal than what I have experienced in the past.”

On the other side of town at Mei Mei, they’ve adopted a tip pooling system for front-of-house workers, meaning that all front-of-house workers pool their tips at the end of a specific time period and then redistribute them among all front-of-house staff. They hope to phase out tips all together eventually. 

Share Profits With Your Staff

Profit-sharing (also known as revenue-sharing) is a great way to provide non-tipped workers with a little financial boost whenever the company is doing well. It's an incentive to work towards the success of the business and to take ownership in your work.

At Juliet, profit-sharing is distributed among staff four times a year. “There’s a benchmark number for profiting, and as long as we show that we're on track for that well within the first quarter, we start getting the payouts incrementally throughout the year,” said Mangino. “How it worked last year is after the first quarter, we got 10% [of the profit sharing pool], and then after quarter two, 20%, quarter three, 30% in quarter four, 40%. So that way it's not like you're waiting until the end of the year to get your full profit sharing check. It comes incrementally throughout the year.”

She said it was nice to get a bigger paycheck every once in a while on top of already having the benefit of always knowing how much she’ll make in a week (thanks to her hourly wage and not relying on tips). 

There are many ways to do profit sharing, but one of the ways the Mei Mei has done it is to create short-term challenges, like one where all staff were asked to think of ways to cut down on COGS (Cost of Goods Sold) for four weeks – and all the money that was saved due to any ideas and changes they made was given back to the staff. 

When it comes to running a restaurant, straying from the norm can be scary — especially considering the impact it can have on your staff. But trying out new management models can work wonders for decreasing staff turnover, and it can make your restaurant an outstanding place to both work and dine.

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