Note, this mechanism only works downwards: the company will never give a pay rise to nine employees on the grounds that the tenth already has a higher salary.

Note, this mechanism only works downwards: the company will never give a pay rise to nine employees on the grounds that the tenth already has a higher salary. You assume the outlier will always be at the high end. What happens when instead of one person being paid much more than everyone else, it's one person that's paid much less than everyone else?