Union Square Hospitality Group: Hospitality Included

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Publication Date:
October 16, 2020

Industry:
Hospitality

Source:
Harvard Business School

In 2015, Union Square Hospitality Group (USHG), helmed by famous restauranteur Danny Meyer, sent shockwaves through the restaurant industry by announcing the end of tipping in its restaurants. Under its new policy, Hospitality Included (HI), USHG would charge higher menu prices and pay higher base wages to its employees, replacing tipping with a system of revenue sharing. The change sought to reduce inequality between front and back-of- staff and to provide more stability and fairness for servers, whose tip-based compensation depended heavily on the whims of sometimes-biased patrons. However, five years later, the organization was still struggling to implement HI, and evidence was suggesting that employees, customers, and owners were losing out under the policy in unanticipated ways. Chip Wade, the President of USHG and Patti Simpson, Chief People officer of USHG, had to determine a better path forward.

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Union Square Hospitality Group: Hospitality Included

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