Managing Change
Scenario:
Danny Meyer Leads His Company Through the Challenges of Eliminating Tips
What happens when your CEO wants to remove the tip structure from your restaurant? Do you complain about the new prices as a customer? Do you worry about your
paychecks as a server?
Danny Meyer, CEO of Union Square Hospitality (home to some of the most successful New York restaurants), discovered these answers when he began eliminating the tip
structure in most of his restaurants. He had seen firsthand the largest negative impact of a tipping culture: employees stuck in frontline positions with no chance to advance to
management positions without taking significant pay cuts.
Meyer began by first involving the affected employees in town hall talks. These town halls happened months before any publicity was released. Meyer then hosted town halls with
customers to explain the importance of fair wages for all of his employees at the restaurant, not just the few who served the food. The transition period for each restaurant to
eliminate tips was usually 3–6 months.
As a result of eliminating the tip structure in most of his restaurants, Meyer has been able to increase the pay structure for cooks at those locations, which enables him to fill
more cook positions and address a common industry shortage. Meyer has also been able to hire employees with a purpose: to deliver exceptional hospitality. Meyer encourages
his employees to take care of each other first and to then take care of the customer, which creates a virtuous cycle of hospitality.
Meyer constantly uses feedback from his employees, even after the tip structure was eliminated. He wants to ensure that each employee feels that his or her voice is heard and
understood. Employees continue to have access to town hall meetings and internal feedback channels to offer honest feedback.
(Dunn, 2018; Feldman, 2018; Matousek, 2017)
Please answer the following questions:
1. What dimension of change is Danny Meyer implementing in this case study?
2. What level of change is Meyer aiming for in this case?
3. What type of change did Meyer implement?
4. What model would be consistent with Meyer’s process for designing and implementing change?
5. Meyer had a very specific set of activities that he hoped would help him achieve a specific goal. What kind of change would this be an example of?
