I mean, both branches are a part of the same organization. There would never be a situation where branches are fighting over the same employee based on compensation. And compensation would be handled at the corporate level (as Jim also explains several seasons later when interviewing Michael's potential replacement). A transfer, sure, but not a situation where branch managers are battling. Suspending reality for a moment, it's a fun episode. Season 4 is peak Office.
As a side note, I always found it funny that Jim is initially portrayed as this universally likable character in the first seasons ("loved by everyone" is uttered multiple times.) And yet throughout, annoyances of him are seen from almost everyone. Oscar, Toby, Angela, Meredith,Kelly, obviously Ryan and Dwight. Basically everyone but Pam and Darryl. Just reminded from the Finer Things Club scenes and in the next episode where he tries to combine birthdays. Anyway, needed to fill my characters. You have one day.
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