I can definitely understand why a team could dissolve. But there are really only upsides for employees to understand why they're being paid X and to be able to model their behavior after the person that gets paid Y.
Not necessarily. I once found out how much one of my team members made that started on the same day in the same role as I with the same amount of experience (the HR manager left his most recent offer letter open on her screen about a year and a half after we started). He was making about 66% more than I was (not an exaggeration) and our output was pretty comparable. Needless to say, modifying my behavior to be more like him wasn't the first (or 100th) thing that came to mind.
Was it fair? Who knows, it's not really possible to debate that because it all depends on your definition of "fair". But in my experience, it's not very realistic to assume that employee A sees what employee B makes and objectively understands how they need to improve to make what employee B makes. Especially since that's not really how pay is negotiated anyway.
The point is that what a person is paid isn't entirely determined by their behavior at work. Much of it is, in fact, determined by their charm, network, prior history and negotiating skills: none of which necessarily have anything to do with their day to day.
but the external market breaks that you might need to hire a new person when the market is hot and they will be paid more than some one hired in a recession
