And this is how you deny telling them your salary history.

You can try this experiment if you own some seriously effective asbestos underwear. Grab a random sampling of people at your office. Sit them down in a room and tell them that you want to try a game to see if they can select their own salary. Get some poker chips or monopoly money, or something like that -- maybe 10 per person. Put all the tokens in the middle of the table and ask them to decide amongst themselves how to split the pot based on their value to the business. In the likely event that the people don't agree to split the pot evenly, the person who wishes to make more money has to explain why they are justified in doing so by comparing their performance to the other people who would make less. Allow the other people to respond if they wish.

As organizer, you get a bonus if you manage to come to a consensus without having to call the police (and honestly, you are wasting your time as a programmer if you have such amazing people skills).

The current situation sucks. In an ideal world, management would say, "Here is how we ranked people. I'm sorry if it doesn't match your expectation. If you wish to move up in the rankings, come and see us and we will work together with you to create a plan for doing that."

In an ideal world, people upon hearing this would say, "Awesome! I'm going to work super, super hard to make sure that I do more of what my management values and less of what they don't. And if it turns out that I'm limited by a lack of talent, I will feel good about myself because I tried my best".

I really, really, really wish I lived in that world, but I suspect the current crappy situation is likely to persist for some time to come.