We reward merit - if you muddle along and half-ass, we worry about how to better motivate you, and typically grant a small (5%) raise inline with cpi inflation.

If someone is working their socks off, then we're not shy rewarding it.

In terms of sustainability - if we hire a fresh grad at £24k, by year four they're on 45 or so, assuming all is well. Most we pay anyone currently is about 60k, which is a very respectable income in a small city 100 miles from London.

Essentially, as long as someone produces more and more value for the business, we reward them more and more.

It also helps to have a decent war-chest, as this gives you confidence to pay people properly, knowing you've a year or more of salaries in the bank.