> 3. Prove it, and I'll give you a raise.

I am assuming that this answers are not done on the spot, but after a minimum debate.

With this answer, the standard process for the employee will be to polish their resume, put themselves on the job market, research candidate companies, explain dozens of time why they want to leave their current job and interview up to getting a proposition.

At that point, there is sunk cost associated with all of that time spent, they have successfully came up with legit reasons to leave the job, and are facing people that want to work with them more than you seem to be.

At that point, I think that mentally moving to a new job is just easier than staying.