Employees aren't worth the market value of their job title on the open market. They are worth the cost of replacing their contributions to the company's bottom line plus any gap in contribution that the market is unable to replace. Often early employees (regardless of objective skill level) hold tremendous non-commodity value to fast growing companies. It is ultimately very costly behavior to think of these employees as commodities.
[late note: the bottom line oriented valuation method that I outline, can of course be negative. If we take the gp's assertions as given, then the employee in question is clearly worth more to the firm than his/her 'commodity' price on the market. But it is possible for the commodity value to be higher than the value of a given employee, even once the transactional turnover costs are taken into account. In such cases, it may be preferable to allow the employee to seek his/her fortunes elsewhere. I note this to make it clear that this sort of valuation model doesn't unduly bias the firm toward retaining low or negative producing employees. By the same token, it frees the firm to recognize value in excess of 'replacement value', as any reasonable worker productivity model should]