@roz One of my team leads came to me with an offer from another company. But it was in good faith and they were going to pay him significantly more than he was making - it made sense he'd take it if we didn't match. And he did ask if we would - and we did.
When there is trust from both sides it works out.
However if you expect that person to strong-arm their way out the first time they get the chance to make 4% more elsewhere, or they expect you to screw them over because that's the working relationship you've established with them then that whole exercise changes.