This article discusses the benefits of providing few significant raises to high performing individuals rather than a nominal raise to all.

From the employee's (my) perspective:

* If I get a small nominal pay raise, I might stick around for up to the rest of the year, depending on how recently I started at the company. I don't know if this is a good idea, but sometimes promotions and raises aren't on the same schedule.

* If I get no raise, I'll be leaving ASAP.

* If I get a significant raise, I'm more likely to stay stay until next year's raise.

Having nearly doubled my salary in a short time by "hopping" at good offers, there's little reason to stick around in companies that value manager bonuses over employee retention.