National Customer Service Week gives us a perfect opportunity to celebrate the people who make hospitality businesses thrive. One of this year’s themes is employee engagement, and there’s one often-overlooked factor that has a massive impact on how valued your team feels: fair tipping practices.
When tips are handled properly, they’re not just extra income. They’re a recognition of great service, a morale booster, and a powerful tool for keeping your best people engaged and motivated. But when tips are handled poorly? That’s when you see resentment, distrust, and people looking for the door.
The connection between fair tips and employee morale
Your front-of-house and back-of-house teams work hard to create memorable experiences for customers. When those customers leave a tip, they’re saying “thank you for making this special.” But if that thank you doesn’t reach your team fairly, or if they don’t understand how tips are distributed, the positive impact evaporates.
Fair tipping practices show your team that you value their contribution. They create transparency in an area that has historically been murky and prone to disputes. And they build trust between management and staff, which is the foundation of genuine employee engagement.
The problem is, fairness can be subjective. Without a clear system, questions arise. Why did one person get more than another? Who decides who gets what? Are the rules being followed consistently? These uncertainties chip away at morale, even when no one’s doing anything wrong.
How a well-run tronc scheme supports your team
This is where a properly structured tronc scheme makes all the difference. A tronc scheme isn’t just about tax efficiency, although the National Insurance savings are significant for both businesses and employees. It’s about creating a fair, transparent, and consistent system that everyone can trust.
A well-run tronc scheme means your team knows exactly how tips are collected and distributed. There’s no mystery, no favouritism, and no room for suspicion. Tips from cards, cash, and service charges all go into one pot and are shared according to clear, agreed rules. Whether you distribute based on hours worked, roles, or equally across the team, the key is that the rules are transparent and applied consistently.
The Troncmaster plays a crucial role here. As an independent figure who manages the distribution process, the Troncmaster removes any perception that management is controlling who gets what. This independence is essential for maintaining trust, especially in businesses where tips make up a significant portion of take-home pay.
Transparency builds engagement
Employee engagement isn’t created by ping pong tables or free coffee. It comes from feeling valued, treated fairly, and trusted with information about things that matter. Tips matter to hospitality workers. For many, they represent a substantial part of their income and a direct reflection of the quality of service they provide.
When you have a compliant tronc scheme with clear distribution rules, you can share that information openly with your team. They can see how the system works, understand what they’ll receive, and trust that everyone is playing by the same rules. That transparency is powerful.
Recent legislation has strengthened workers’ rights to receive tips in full, making fair practices not just good for morale but legally required. The Employment (Allocation of Tips) Act 2023 and accompanying Code of Practice set clear expectations about how tips must be handled. Meeting these requirements protects your business, but more importantly, it shows your team that you’re committed to doing right by them.
Practical steps to improve your tipping practices
If you’re using National Customer Service Week as a prompt to review your approach to employee engagement, here are some practical steps to strengthen your tipping practices:
- Make sure you have a proper tronc scheme in place. If tips are going through your regular payroll, you’re losing the NIC savings and potentially creating compliance issues. A dedicated tronc structure keeps things separate and compliant.
- Document your distribution rules clearly. How are tips pooled? Who’s eligible to receive them? How often are they paid out? What happens if someone works part-time or joins mid-period? Write it down, share it with your team, and stick to it.
- Choose your Troncmaster carefully. This person needs to be independent, trusted by the team, and free from any hiring or firing responsibilities. If you don’t have someone suitable internally, consider using an independent Troncmaster service to maintain complete impartiality.
- Communicate regularly with your team about tipping. Don’t let it be a black box. Share information about how much has been collected, when payments will be made, and any changes to the distribution rules. The more your team understands, the more they’ll trust the system.
Fair tips create a better workplace culture
At the heart of employee engagement is feeling valued and respected. When your team knows that the tips left by satisfied customers will reach them fairly, without deductions or favouritism, it reinforces that their hard work matters.
A well-run tronc scheme isn’t just about compliance or tax savings. It’s about creating a workplace where people feel they’re being treated right. Where the rules are clear, consistently applied, and independently managed. Where tips are seen as the recognition they’re meant to be, not a source of confusion or conflict.
This National Customer Service Week, take a moment to review how you handle tips. Are your practices truly fair? Are they transparent? Do your team trust the system? If there’s any doubt, it might be time to look at how a proper tronc scheme could strengthen both your compliance and your team’s engagement.
Because when your people feel valued and fairly treated, that’s when they deliver the exceptional service that keeps customers coming back. And that’s what great customer service is really all about.