This "spread it around" sounds like some trickle down ecodomics madness to me =)

If the company can't pay more to a high performer they surely won't just give thast money to the average folks. It'll just go to C-staff bonuses and conference trips to exotic countries.

(Provided that the average performers are above the union minimum already)

The likely two outcomes are -- 1) the upper limit of salary band for everyone in the same role is raised high enough or 2) the high performing person is leaving to a place that pays it with a band or without.