Employee: "Hey boss, you should give me a raise."
Boss: "Why?"
Employee: "Because if you don't then the opportunity cost
of working here will be too great for me to
stay."
Boss: "Oh. Ok. Here's a raise."
The above seems like a perfectly reasonable conversation to me. And I can't see how else it should work. What it takes to retain an employee is so widely variable that it really can't be up to the employer to determine how much to pay each person they want to retain.
