Earlier quoted context omitted.
> On the other hand, it also retains poor performers, who you want to steer to finding roles elsewhere If paying people less encourages poor performers to find roles elsewhere, it encourages your high performers to do this even more probably...
It really depends on the organization, its mission, the employee pool, and the local cost of living. Most software engineers are relatively well-paid compared to the wider labor market, even the engineers who are "underpaid". Kahneman's research showed that once you have enough money to pay your bills, making more than that has rapidly diminishing returns for your happiness. It's much more important to fit in - like…
I don't think we actually disagree here. I agree broadly with everything you said. My point was mainly I don't see a reason to support that assumption that if pay pushes out low performers, I don't see a reason why it wouldn't equally push out high performers? This goes on the assumption that lower performers optimise more for pay than higher performers?