As someone who has been serially un-retainable to the point that I eventually got tired of it all and decided to take up consulting, here's my advice:
* Pay them their market rate. DO NOT WAIT UNTIL THEY ARE ASKING FOR RAISES. Nothing makes you feel unappreciated like not being fairly compensated. If I have to ask you not to rip me off, the relationship is already on very rocky ground.
* Give them interesting things to work on them and empower them to solve them creatively. Do not micromanage competent people.
* Let them have skin in the game by giving them a non-trivial stake of ownership. Nothing makes you go the extra mile like knowing that doing so is furthering your own success.
This really annoyed me with a previous employer. They gave me every raise I ever asked, but they always made me ask, and they never gave me more than I asked. It took all of the goodwill out of the raise.
I'm going through this exactly with my employer right now, they will never mention a raise until I ask. I'm disappointed, but it doesn't surprise me anymore.
For a lot of companies, a significant profit center is the delta between their employees' market rates and what they are paying them. Asking them to eliminate that profit is tough.
* Pay them their market rate. DO NOT WAIT UNTIL THEY ARE ASKING FOR RAISES. Nothing makes you feel unappreciated like not being fairly compensated. If I have to ask you not to rip me off, the relationship is already on very rocky ground.
* Give them interesting things to work on them and empower them to solve them creatively. Do not micromanage competent people.
* Let them have skin in the game by giving them a non-trivial stake of ownership. Nothing makes you go the extra mile like knowing that doing so is furthering your own success.