I honestly believe its unlikely that you have an employee for, say, 5 years, then they come to talk to you without getting any counter-offers because they've gotten an average raise of 2% per year, have developed skills, and have market value of 25% greater than their current salary, and you say "ok, I'll give you a 25% raise."

In other words, unless you can contradict me with a straight face, you're basically just saying you underpay as long as you can get away with it and nothing can stop or change that.