[darren2000]

It can be good and bad:

good: a company tries hard to pay well, and welcomes being proven wrong by an offer letter so that they can correct the pay scales for everyone.

bad: by default, management won't review salaries or give pay raises for anybody. Every single employee must go interview with other companies -- and waste both their times -- to get an offer letter and then a pay raise. This rewards disloyalty, as the employees who don't waste time interviewing elsewhere end up paid the least. It also encourages employees to be disingenuous (or dishonest): some engineers (myself included) refuse to be disingenuous: if another company made a much better offer I'd take it, and would refuse counter offers.

Of course, there's a third possibility: companies that do not welcome being proven wrong about salary, and don't want to have money conversations or pay raises at all.