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The annual merit increase program should keep sellers’ total compensation aligned with labor market levels and reward exceptional performance, sales collaboration and growth in professional competencies.

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For retailers, labor cost generally accounts for 10% to 20% of total sales and sometimes even more than 50% of total operational cost (Madhani 2021c).

While the results vary somewhat by industry, our research shows that annual incentive bonus payouts often do not relate well to total shareholder return (TSR) — a metric that tracks total value creation by measuring share price appreciation plus the effect of dividends paid out.

Megan Nail, vice president, total rewards practice at NFP, a national benefits consultant and property and casualty broker, said that at the top of the list of her firm’s recommendation for New York employers is to: Review open positions, whether they are new positions or open for promotions and transfers.

To ensure that there is sufficient focus on each of the metric areas, each performance measure should be at least 10% of the total award opportunity.