I think is a great step. I work for a big company and has been around for 4 years. when I joined this company, my salary was on par (also justified as per my previous salary). We saw a tremendous amount of growth in the technology and the team has grown by 20X. The people joining now are getting far better salary because either their current salary is high and they negotiate on that OR the company is ready to pay more for filling up the positions. But I feel very bad when I think of it, the employees who laid the foundations got very small hike over the years and I feel underpaid now. Also, I was the member who laid the foundation of the team and created the initial reputation which was required.
Salary negotiations based on previous salaries are just plain idiocracy. I have co-workers who are excellent in terms of the skillset and the value they create but they come from either smaller cities where the pay was not great or from startups which didn't pay very well in the early days. These people suffer a lot even though they know that their counterparts who come from large companies and had good salaries get paid almost 1.5-2X.
Salary negotiations based on previous salaries are just plain idiocracy. I have co-workers who are excellent in terms of the skillset and the value they create but they come from either smaller cities where the pay was not great or from startups which didn't pay very well in the early days. These people suffer a lot even though they know that their counterparts who come from large companies and had good salaries get paid almost 1.5-2X.