My policy (I'm co-in-charge of recruiting at Matasano/NCC, and a lot of folks report to me) is this:

1) Hire based on current ability, not potential. Hiring based on potential is a minefield that our whole process is designed to avoid. ("Enthusiasm," "cultural fit," talking a good game without being able to walk the walk, etc.)

2) Be aggressively fair in giving out promotions and raises. Keeping someone's salary low because they're bad at asking for raises is not a good long-term strategy, especially in consulting.

Seems to be working out.