It should be, but companies, like people, aren't as rational as we'd like to believe them to be. For whatever reason there is a tendency to keep people who aren't on leadership tracks (which often means getting picked by a leader above you) where they are and with minimal pay raises. But then they hire new people at higher rates (because you have to, to get them in the door). This law makes that much harder to accomplish without creating conflict. You announce a new job paying 20% more than your current employees get in that position, they'll know they're getting screwed.

I'm on Colorado and all our internal promotions are opened on the internal job board (greenhouse) even if we already have a candidate in mind.

1. The candidate has an opportunity to show how interested and qualified they are (or if the person we had in mind doesn't want the job)

2. Other people we didn't think would be interested have the same opportunity to show they do.

3. No one ends up feeling slighted for having been passed over.