Yeah, I've never heard of this. I've also never heard of software development in the midwest :P
I really don't consider myself cynical in general, but I've worked for 5 companies now, and I always felt like they were doing everything they could to pay me as little as possible while acting like they were trying to pay me as much as possible and trying to get me to work as many hours as possible.
Examples:
"our annual pay adjustment will be delayed 3 months this year due to [something stupid]" - but there would be something stupid every year and the next year's adjustment was one year after the previous year's
"We do our pay raises and bonuses based on your rating, but we have rules that only 5% of employees can get a 5 (highest rating), and only 10% can get a 4, blah blah blah, no pay raise for you"
"This year's bonus or pay raise will be smaller despite record profits because of [stupid reason that wouldn't convince the most gullible person that ever lived]"
Without fail, once I have been at a company for 3 or 4 years my salary is at least 10% below the going rate, usually 20%.
What I'm saying is this sounds like bullshit. We give you a shit starting salary but we'll give you an unspecified pay raise every 6 months. What's that line from Jerry Macquire, I can never remember it? Someone please help me.