This is "common knowledge" but I've never seen it in real life before.
I've accepted counter offers, as has my wife and quite a few former colleagues. And none of these people were ever let go from that position.
The logic doesn't even makes sense. In large companies, the hiring manager doesn't care about salaries beyond if it fits in the budget. And firing people is a huge pain in the ass. If the company wanted to replace a person with someone cheaper, letting them go would be the best strategy. That would give the company two weeks to get documentation of the job function in place and start interviewing.
I can see this kind of vindictive behavior a very small company, where decisions are made on the whims of a mercurial owner. But you're equally as likely to get fired from a place like this for any number of mundane offenses which the owner finds insulting.
I was told by a manager that HR has a difficult time figuring out salary levels for tech skills. And that an in-hand offer is very effective at convincing them, and upper management to approve a larger than normal pay increase. Worst case, they might just tell me to take it.
They'll fire you on the spot when finally you heal though.
I don’t know, I don’t necessarily think my employer is perfect, but they’re certainly good to me.
Can't underestimate job security in the evaluation of salary.
I usually only dress formally when I’m presenting outside of my company and people usually joke about my having interviewed somewhere else that day.
Withholding the truth is also lying, by omission. In that sense, your employer is already lying to you by not compensating you according to your actual value. I realize it’s a bit of a stretch but there’s something there.
Lying to get a financial gain is the definition of fraud.
That said, it's one of those technically illegal things that no one in a million years is going to get charged for.
However, I wonder if it actually is fraud. Intent matters. The intention isn’t to defraud the employer, but rather to short-circuit the whole process of job skipping for a correct wage. So it’s actually not an unfair gain, and that is precisely why I think it’s not even immoral in this case.
A person in my life changed jobs to a worse location and then changed back. Pay rise of like 20% and a better position (senior doctor). That is just not justifiable. Same employer, same hospital, same ward.
It's fair to argue whether it is moral to pay people less than what you think they are worth to you. That is questioning the morality of capitalism.
In contrast, "fighting fire with fire" is justifying lying. Maybe the ends justify the means in specific cases, but I believe that generally people and particularly ethicists agree that lying for personal gain is generally considered immoral/unethical. Of course, there are cases where lying is considered justified and the moral thing to do e.g. saying no if a Nazi asks you if you're hiding Jews in your attic. But in that case, you're lying not so much for personal gain but to help others.
For example, your manager would like to give you a raise, but company policy or unwritten "this is how it works" rules say that a raise of more than 15% can only be given when the employee has received an offer from another company. But they don't actually want to see the offer, they just want you to say it, just as your partner wants you to say "I love you" to him or her from time to time to continue receiving the benefits you have been looking forward to maintaining or increasing.
“Neoclassical” economists might say you made an irrational choice.
Human beings know that how you feel is as important as how much you’re getting.
I have a very cynical view about this sort of behavior. I feel that managers do this to make the employee lose the offer at hand and then are put on the "first to be fired" list.
Once a decision has been made to move and you inform your employer that you are leaving, it is best to leave. Even if the counter offer is higher than the new offer. It just shows how dis-honest your manager is.
I have been both an IC and a manager, and when I was an IC I saw managers as vampires who fed on the blood of ICs. When I was a manager, I saw ICs as a bunch of whiny, entitled cogs. I am exaggerating for illustrative purposes.
Perhaps the manager had not been informed before of the IC's financial demands; perhaps the manager could not offer a raise before the employee had received an outside offer because of company policies; perhaps the manager did not see the IC as particularly capable, but this offer from a solid company made them think they had made a mistake; or perhaps they thought it was a bluff, and now they are paying for the all-in.
It is good to be cynical and to have one's own self-interest in mind. But the caricature that sees management as incompetent, corrupt or vindictive is all too easy to present to an audience that is well receptive to these appeals. I have met many like those, sure, but I have also met many ICs for whom I could use the same adjectives.
People too often blame the former for constraints from the latter.
Because companies have imperfect reading on worker productivity, and are also trying to balance other priorities when determining pay, high output workers are consistently underpaid, called Wage Compression (https://en.m.wikipedia.org/wiki/Wage_compression)
After getting a 2% raise in the last cycle, and knowing that my granted options were going to be worthless (a factor which is under-discussed in popular news articles), I decided that it was a particularly opportune time to jump. Like many, I was not particularly unhappy, so I had not been motivated to go through the effort for search process before.
When I got an offer, my employer quickly matched it (suggesting that I really was worth that much to them) but burning a bridge with the contact you got me the new job was not worth simply reaching parity in my current one, so they lost me. If they had preemptively gotten a few percentage points closer before I sunk effort into interviewing, I probably would not have started looking.