Will overpaying retail/restaurant employees lead to an increase in sales?

Answer 1

No, this will lead to increased salary expenses and decrease revenue unless employees are given the tools and incentivized to increase sales. For example, the a decent base pay and the incentive to make a lot of tips and/or bonuses will drive sales. This is under the assumption that the target market is willing to consume more and/or marketing activities can reach a wider customer base.