Employee Reactions to Preservice Tips and Compliments

Abstract

Preservice tips are becoming increasingly common in the marketplace (e.g., online food delivery, quick-service restaurants). While prior research has investigated how the practice of preservice tipping is perceived by customers, how preservice tipping impacts the perceptions and behaviors of employees remains unexplored. Does tipping early actually elicit better service? Through a series of four studies, our research compares the effectiveness of tips—a financial incentive, with compliments—a nonfinancial incentive. The results indicate that early tips and compliments are both effective in obtaining better service, but the relative effectiveness of a tip versus a compliment depends on the service context. In closed service contexts—which involve a continuous, relatively short interaction—tips are superior. For example, when getting a drink at a bar, buying a sandwich at a quick-service restaurant, or dropping off a car for valet parking, tipping early should lead to better customer service. In contrast, in open service contexts—which involve multiple interactions over a more extended period and provide an opportunity for a social connection—compliments become more effective. The results have practical implications for customers wishing to enhance their service experiences and for managers in motivating their employees.