HR departments are constantly looking at "market rates" for jobs which is a fancy way of saying they share salary data or get it from ADP and have much more information about what people are willing to accept.

At hiring time, they are willing to pay market rate (or some percentage of market rate) to get people in the door. Once you are employed, they don't care anymore and will let excellent people slowly fall behind market compensation with 1% to 2% raises.

When those employees get frustrated and leave for 20% bump in comp, the companies seem fine replacing them with a new hire at market rate. So now, they have a new employee making market rate, they have to train the new employee for months before they are productive and they've taken on the risk of an unknown vs. just giving the existing employee a raise to market rate. It doesn't make sense unless you want to telegraph the message that employees are fungible and you don't really care about people.