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Shifting the curve of distribution (changing its Skewness) alters the entire distribution this is basic statistics 101.

A positive skew will effectively reduce all employees wages

http://en.wikipedia.org/wiki/Skewness

This is also an effect of the "flat" org structure. Few annoying managers! and also almost no chance of becoming one of those managers.

I don't understand how employee A's salary is a factor in whether Employee B gets negotiated with.

From the article:

> Google, like the others, used a “salary algorithm” to ensure salaries remained within a tight band across like jobs. Although tech companies like to claim that talent and hard work are rewarded, in private, Google’s “People Ops” department kept overall compensation essentially equitable by making sure that lower-paid employees who performed well got higher salary increases than higher-paid employees who also performed well.

I'm in Atlanta, and our company does this too. So it's not just SV that is keeping salaries low.