New technologies seem to be popping up everywhere to make it easier for customers to exercise their power to pay. From personal phone apps to iPad kiosks in restaurants to video screens in taxis, a tip amount is instantly calculated for you just choose the percent or level you wish to tip. All this technological assistance on tipping is also creating exciting, new data sources. Increasingly, labor economists and other social scientists are using such data sources to better understand how people respond to incentives and the resulting workplace implications. The tipping examples described in this article offer some interesting lessons to employers and those designing compensation systems. Seemingly, tiny changes in how compensation systems are designed and communicated can have extraordinary consequences. If designed correctly, simple experiments in HR systems can save organizations a significant amount in unintended costs and problems when introducing systemwide change.
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Hallock, Kevin F., PhD. 2014. "Tipping, Technology and Lessons in Compensation Design." Workspan 57 (5) (05): 12.