Tip pooling is a form of tip distribution where tips are aggregated into a collective pool and then divided among a group of tip-eligible employees.
Tip pooling work best for our business since our team members interact directly with customers while others are equally working on the order but never interact with them.
We also believe that tip pooling strengthens the work relationship between team members and lead to a less competitive and more collaborative atmosphere. Team members are working together equally to improve a customer’s experience.
Point-System Method #
While there are other methods on how to divide the tip pool equally among team members, in Skalka we used the Point system method for tip pooling.
In the case of a pool, however, all the tips given by customers in a single service are combined into one pot. The pooled tips are then distributed to team members based on the points team members were assigned.
A tip pool based on points begins with assigning a number to each service position based on its level of responsibility. This number becomes that staff member’s “points in the pool.”
We don’t subtract the credit card processing fee from the tip and give the team members 100% of the tip left on a credit card.
Skalka’s Point Breakdown Table #
| Team Member’s Role | Point Multiplier |
| L1 | 1 |
| L2 | 1.5 |
| L3 | 3 |
| M1 | 4 |
| S | not included in tips but are given $50 bonus per shift. |
Tips Distribution Example #
Let’s take August 28, 2022 as an example.
For this day, the tips are $302.04. We have to divide this equally to all the team members.
First, we have to get the point-hours of each team member. The formula would be:
Point-Hours = Point Multiplier x Worked Hours
Example:
Since Alan worked as an L2, his point multiplier would be 1.5
- Alan = 1.5 x 5.68 = 8.52 point-hours
Sam worked as an L2, his point multiplier would be 1.5 also.
- Sam = 1.5 x 6.55 = 9.825 point-hours (etc.)
Jack worked as an L3, so his point multiplier would be 3.
- Jack = 3 x 6.55 = 19.65
Bella in the morning shift, worked as M1. Her point multiplier would be 4
- Bella = 4 x 5.77 = 23.08
After you calculated all the team members point hours, sum it all up. The total point-hours would be 183.52.
We have to divide this amount with the tips for the day. $302.04 (tips) divided by 183.52 (total point-hours) = $1.645
Next, we have to multiply the point-hours of each team member with the amount of $1.645
Example:
- Alan = 8.52 x 1.645 = 14.02
In conclusion, Alan’s earned tips is $14.02
- Sam = 9.825 x 1.6545 = 16.17
In conclusion, Sam’s earned tips is $16.17 (and so on. Please refer to the picture above)
For team members who has S shift role, they do not receive tips but instead they will receive a bonus amounting $50.
Click this link if you want to know how we distribute each team member’s tips:
References:
https://squareup.com/us/en/townsquare/what-you-need-to-know-about-tip-pooling