[quacked]

That's symptomatic of a dead organization, in my opinion. All employees should be compensated at the highest level the organization is willing to pay them at that moment, in terms of responsibility, compensation, and title. If there's no room to promote them because the org chart is full, but they deserve it, congratulate them, explain the situation, and give them a raise and more responsibility. Your employees should never be able to call your bluff, because you shouldn't be bluffing!

It really throws me for a loop when people say they were offered better work for more money when they threatened to leave. How can you call yourself a good manager if you're not advocating for the best possible work in exchange for the best possible compensation out of each of your employees?