Yes but that gets factored into the hiring because this salary scheme is for retention. If someone negotiates a higher salary it's taken as the market price for the position increasing and the company not wanting to lose their employees who will eventually or immediately realize they could be making more somewhere else.
I do not understand what salary scheme for retention means. There exists $x to pay everyone in the company. You can start from dividing it equally amongst all employees. As you pay some employees more, you have to pay others less.
Keep going along this track and “max(individual rate, group rate)” will break down as you winnow down the definition of group.
