How to hack your employees wages (as an owner)

You’re an owner of a service-industry business. You want to pay your employees less without letting them think you’re paying them less. How do you do this?

Gamification.

Gamification, or “gamifying” is the practice of adding features to a process, story, or system to poke your brain in all the dopamine sweet spots to keep you addicted.

The most classic version of this the slot machine. Pull the lever 1,000 times and get nothing. Then you pull it once and you get a big payout. You’re hooked. You’ll spend twice as much money trying to get that dopamine rush again.

Common digital examples of gamification include:

  • Reddit giving you artificial points (which they call “karma”) for creating engaging posts
  • Instagram feeds prioritizing the people you engage with the most at the top of your feed, so that every time you log into the app you get “rewarded” with some of their content
  • Duolingo and its many tools
    • Giving you “streaks” for consistent use of the app every single day
    • Awarding “gems” for lessons completed
    • Putting you in leagues to compete with other people for points
    • Seriously, a single app has three different points systems and yet they all work. They’re honestly the best at this.

How can a business owner get in on the fun?

Example: my time as a valet

I worked for a bit as a valet parking cars at parties and events. It was pretty simple side cash.

After a few months, I had a regular “gig” at a restaurant in the Price Hill neighborhood of Cincinnati. On one particularly busy night, I made $100 in tips. This was probably double the tips I made on a typical night. Not bad for a few hours of work, but here’s the trick: I remember that one night I made $100, not the previous 10 nights I made $50. I’m now on the hook for the $100 payout, and am willing to consistently take half of that revenue for the chance to get it again.

By getting one lucky break, I’m now more willing to work worse jobs for the chance to get lucky again.

Now, I’m not saying all jobs with tipping are scams. But I am saying that the system is designed to trick you into thinking with the irrational, dopamine-fueled part of your brain, not the logical “economist” part.

Okay, but like you said, isn’t this luck? What can a business owner do about this?

How an owner can hack your brain’s reward system

  1. If I work 10 jobs and make $50 each, maybe I start to think about quitting and finding a different job.
  2. The owner keeps strong metrics, and knows how much you’re getting tipped and how many jobs you’re working (the team “lead” at any job reported the group’s collective tips so that we could split it up evenly)
  3. The owner sees you’ve worked 10 jobs recently and they’ve all paid around $50. She decides to put you on the roster for the next big weekend party in the rich part of town where you’re probably going to make $100 in one night.
  4. Now you’re on the hook for 10 more jobs because you are waiting for the next big job.

But here’s the rationalist breakdown:

  • Quick math: 10 jobs at $50 each => $500 total
  • One more job at $100 => $600 total
  • Brings you to 10 jobs totaling $600
  • 600 / 10 = 54
  • Average payout per job => $54

By taking the “big job” you’re really only earning $54/night. That’s not much better than $50. But your brain has tricked you into thinking you’re getting $100/night, even though you know that isn’t quite true.

In the big picture, all it costs the owner is $4 more per night to keep you around. If they offered to give you a raise for that amount and no tips, you’d probably say no, because then you’d be missing out on the big emotional payout.

All of this isn’t even considering the fact that these are all tips coming from customers, not even the owner. The owner’s base pay they give you hasn’t even been touched. She’s just circulating all the workers in the way that maximizes their perceived reward so she doesn’t have to make up the difference in base pay—but keeps you the hook hunting for tips.

Is this unethical?

I don’t know. I don’t think so, unless anyone is lying about what they’re actually getting paid or promised. It’s more likely just an accident we discovered along the way, yet the incentives for the business owner means she will never change the rules herself.

What should you do as a worker?

Start tracking what you’re making, inclusive of tips. Track what days and events you’re making the most money from. Prioritize those days. Understand the average of what you’re making and don’t let the big events distract you. The only way to know if you’re getting ripped off is if you take the dopamine part of your brain out of the equation and start thinking with the boring, math-y part.

This applies to valets, servers, people in sales earning commission, and any other job with variable pay. Start tracking and know what you’re really earning per hour.

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