>You might even give the employee a raise. This may sound innocent, but you have just created a strong incentive for political behavior. ...and if you don't, y

>You might even give the employee a raise. This may sound innocent, but you have just created a strong incentive for political behavior. ...and if you don't, you just created an even stronger incentive for all your talent to quit so you're left with the people who coast, knowing they are paid their actual value at most or who feel they would get less in another job. People who are good at what they do always, ALWAYS keep an eye on their value vs pay. Not to mention word of mouth - if you pick up a reputation as underpaying or unwilling to give deserved raises, it will affect who applies, reducing the quality pool by limiting applicants to people in an even more underpaid job, unemployed, or otherwise desperate, while anyone better will be seeking to use it as a stepping stone to somewhere that pays them fairly for their skill. I've worked at a company that followed that 'advice' before and as a result, everyone was grossly underpaid and there was a high employee churn rate, despite themselves advertising in their job listings (which they still do) as having good career opportunities.