[wombat-man]

This was talked about in The Hard Thing about Hard Things by Ben Horowitz, iirc, but from the other side. It advises to not offer a raise to keep an employee planning to leave. This is because the implication is that you were underpaying them before or that you're willing to overpay them now for threatening to quit. This encourages employees to follow suit instead of working towards promo. So pay what you're willing to and don't play that kind of game.

The book/article goes in more depth. I thought it was still online for free but I can't seem to find it.

[jonny_eh]

Sounds to me like it's the employer that should dislike counter-offers, not the employee. This advice is also made through an "employer is always right" lens. Is it really so bad to send a signal to an employee that they were underpaid?

[wombat-man]

To one employee? No. But other employees will probably find out. Now how will they try to get a raise? By working hard, or getting an offer letter and threatening to leave?

As an individual, if you fully intend to leave, and find your current employer trying to keep you that's a personal decision for sure. For me, I figure if I already put in all the effort to find a better job, I might as well take it. Maybe irrational, but at that point I've already weighed the decision on whether to go. My decisions to leave have usually not been purely about comp but other issues I have with the job.