alurkerhere t1_iy97k08 wrote

When you think of workers as a distribution of motivation and attractiveness, you'll have varying distributions depending on industry, and for most, you can probably get away with small raises and not have that much turnover.

However, you want to reward the high performers more, but it can't be so much that other workers resent that amount, which leads to lower increases overall. Other companies want to hire better people, so they need to increase the total comp to compete.