Turnover’s Relationships with Sales, Tips and Service across Restaurants in a Chain

Abstract

This study used restaurant level data from a casual-dining restaurant chain in the Midwestern United States to examine turnover’s relationships with sales, tips and service. Turnover was negatively correlated with sales and service among high volume restaurants but not among low volume restaurants. Interestingly, the opposite pattern was observed for turnovers’ relationship with tip percentages – turnover was negatively correlated with tip percentages among low volume restaurants but not among high volume restaurants. Plausible explanations for these findings are discussed along with their practical implications.