How a no-tipping policy helped this restaurant triple profits in 2 months

[LiberalArkie]

Last Tuesday, the upscale Pittsburgh eatery Bar Marco closed its doors for a different kind of workday.

In carpools to Target and on Craigslist runs, the restaurant’s team of 26 staffers was undertaking a redesign of its employee lounge and shower. They perused the aisles for bath towels and other decorative trinkets, and even traced down some vintage high school lockers where the team could stow its valuables.

Tuesday also happens to be the day that Bar Marco hosts a weekly financial meeting. During these gatherings, employees—each of whom has access to all of the restaurant’s earnings figures—can offer suggestions about how to improve day-to-day operations: a safer kind of candle votive, for instance, or ways to cut down on food waste and laundry costs.

Afterwards, staffers hand in a weekly homework assignment: a three-paragraph report about any nonfiction book of their choosing. “Anytime you’re serving people,” says Bar Marco’s 30-year-old founder, Bobby Fry, “you should have more to talk about than the weather.”

Snip

Read More at Fortune.com

[PatrickforO]

1. Here's the reason - they are sharing more of the profit with the workers.

"Earlier this year, the restaurant garnered national headlines when it announced it would completely eradicate tipping as of April Instead, every employee now receives a base salary of at least $35,000 (plus bonuses based on profits,) health care from date of hire, 500 shares in the business and paid vacation."

Now, if there were a restaurant in my area that made this decision, I would certainly make it a point to eat there. Now, the food would have to be good and so would the service, or as the article says, I wouldn't be back. But if both food and service were good, then I would become a regular customer.

This is a very regenerative approach (see essay regenerative capitalism - http://capitalinstitute.org/wp-content/uploads/2015/04/2015-Regenerative-Capitalism-4-20-15-final.pdf) because it values labor, the customers and the local economy. No wonder their profits doubled. People in the community, including their employees actually now have a stake in their success.

[Frustratedlady]

3. Back in the 70-80s, there was a similar plan called the Scanlan Plan.

Everyone was pretty much on an equal basis, contributed ideas to make the operation run more smoothly, save money and increase production. Our company was going to give it a try, but it didn't come to fruition. I wonder how other companies did under that plan.

[Erich Bloodaxe BSN]

6. Hell, I'd make it a point to try to work there. nt

[KamaAina]

23. I'd make it a point to try to eat there

if I ever found myself in the 'Burgh.

[Lordquinton]

13. Regenerative capitalism

Also known as socialism, a good step forward.

(It's a bit more complex than that, yes, but really we need to stop trying to make capitalism happen)

[PatrickforO]

14. There are a lot of local leaders in various communities around the US that are

looking at the types of ideas put forth in the regenerative capitalism essay - employee owned coops, slow money, slow food, microlending and other very cool things. This stuff is happening.

But, and it is big oligarchic BUTT, the new TPP will allow multinational corporations to challenge these things. The TPP isn't about free trade on goods, either, because we've had that for decades - it is about 'free trade' of capital, and it puts the oligarchs firmly in command of all signatory governments.

This is why we need to a) oppose the TPP, b) make sure our legislators know that we don't want the TPP ratified, and c) elect someone like Bernie, who will move to get rid of it when in office.

[Lordquinton]

21. I read a description of benevolent capitolism

which was like a company that made shoes that donated a pair for every pair sold and such, feel good actions by the company. It we swiftly undermined by pointing out that the company was making twice the profit on the shoes so it could give away one pair, it did not pass these benefits on to the employees or it's customers, just made them look good in comparison to other companies.

I'm wary of any system that tries to make it seem that any form of capitalism can stand on it's own, it needs tempering with socialism to take care of those that can't hack it in the capitalistic world.

I agree that Bernie is the best chance we have making that world, however you want to define it, a reality.

[PatrickforO]

15. Oh, one last thing...

I've found the very same Republican types who are virulently against anything that even whispers of (gasp) socialism (shudder) at the national level don't even bat an eye when you suggest this kind of stuff at the local level. Interesting.

[Lordquinton]

20. Those republicans don't know the definations of the things they are opposed to

nor the ideas they support. That whole "I may be back to living in a trailer, but thankfully a Democrat is no longer in charge" types are terminally clueless as to the nature of whom they support, and their single issue is more important than their own well-being. I don't understand that kind of cognitive dissonance.

[JudyM]

2. All great except the mandatory book-a-week.

That's a lot of unpaid overtime...

[Lancero]

4. Not so much the reading, but writing the paragraph imo.

Still, it's a bit of a sad example of our nation that - for some people - this is the only way they'd read a book.

[daleanime]

7. +1

[mrmpa]

11. Some cities.........

like Chicago have designated a book for Chicagoans to read. I know they designated "To Kill A Mockingbird" in the past. I don't know if they still do it.

My family is a huge reading family. For my 85 year old mother, I download books from the local library's digital collection. She has 3 books on it right now. She reads one a week.

I have a nook, that I take in my car every day. I once gave a book to my now 31 year old nephew, who said it was a great "Bus Book", meaning it had shorter chapters for the ride to work. His sister is the assistant director at the library in the town that abuts me.

BTW the restaurant is excellent. I have been there twice.

[JudyM]

18. May be valuable but also strikes me as a bit of a putdown and paternalistic.

Kind of like they're children that need to be told what's good for them.

[DawgHouse]

10. I wouldn't care for that requirement either.

I think a person can converse about things besides the weather without being required to read a book and write a report. I rarely ask waiters if they've read any good books lately, but maybe it's just me!

[JudyM]

17. Lol, I certainly haven't asked that, either. Nt

[ohnoyoudidnt]

5. I was at a restaurant in New Orleans recently that had a no tipping policy.

It's wasn't upscale, but it had been there a very long time and it was always busy with a line out the door during peak hours. Their profit is obviously very good. I knew nothing about how they compensate their staff, so I tipped anyway. The restaurant in the article did a lot more than just change their staff compensation to increase revenue, though. It is a good business model and would be nice to see more restaurants change to it.

[classykaren]

8. I wish they would pay better wages and no tipping on cruises

[Omaha Steve]

9. Thanks for posting

K&R!

OS

[blackspade]

12. This is a business practice that should spread.

It edges close to worker coops which I heartily endorse.
One day I hope to turn my workplace into a coop....

[Fumesucker]

16. A down side of this I suspect is a lot of marginal people will be shut out of working

Restaurant jobs are easy to get because the turnover is high, it's a lifeline for people who lack technical skills. As soon as employers start paying good money they are also going to expect a more qualified employee.

The gentrification for lack of a better word of the restaurant business isn't going to be without some sort of negative effects just like gentrification of neighborhoods also has downsides, sometimes fairly severe.

One of the little realized side effects of the highest incarceration rate on the planet is that the US has a lot of people who aren't eligible to work at a great many jobs, with this system restaurant work will become much more closed to those people.

[Hydra]

19. It's not an accident

In the system as it is built, there are a certain amount of people that MUST be shut out to scare the rest into doing more than they should be expected to.

Back when I was in high school and learning about basic politics and economics, I always thought that we should have 100% employment as our priority if that was how everyone was expected to survive. When I noticed that was not a priority, it forced me to look at why we say one thing and actually do another as a society.

Once I worked all of that out, I decided I wasn't a supporter of Capitalism. It doesn't serve most people very well, so we should not serve it back.

[niyad]

22. k and r and thanks for sharing.