Most jobs work that way. A job has a set pay, and you can get fired or promoted. Tipping is unusual: A janitor doesnt get paid a different amount each paycheck because of how clean others feel it is this week. Cashiers who help you find things in the store don't make more that day.
Base pay has to be the same. You get merit based raised after that. How will they know who's better and who's worse at first? They won't that's why base pay is equal for everyone.
Some employees have so much experience or other skills that they can immediately ask for a higher base pay but it's not the average experience.
the restaurant asked employees to sign new contracts that offered hourly wages for servers and bartenders of $30 an hour, according to Axios Denver. The new contract said they would no longer receive tips to supplement their wages
The article doesn’t say anywhere that they can get promotions. It seems to indicate that all servers are $30/hr and that no other levels exist to ascend to.
Then it becomes a competition not in who can provide the best service to customers, but in who is able to look the best to the boss. If that means being fast and efficient, and not minding if you step on customers' toes, then the customer experience will falter.