In my businesses, I've had employees do this a couple of times. Both times my response was "you should take that offer". Also both times, if they'd asked for a pay increase equal to what the offer represented, they probably would have gotten it.

Coming to me with an offer letter in an attempt to get a pay raise is a thing that I think speaks very poorly of the person. It's an attempt to extort me, their current employer, and it's showing great disrespect for the company they got the offer letter from (because the employee is basically just using that employer and wasting their time).

This is not how salary raises work IMHO.

In my experience as a new (~2 years) manager, you get many questions when proposing salary raises to people perceived as happy, satisfied and agreeable.

I always feel like I need to put more effort on behalf of my reports and kind of repeat many times the obvious fact that it is better if we don't wait for people to find another job so that we - as a company - come back begging for them to accept a counter-offer raise.

I'm too lazy to look it up and verify but IIRC the majority of employees who ask for a raise with another job offer on the table end up leaving within about 6 months even if they get the raise. So yeah, it wouldn't surprise me if doing that basically puts a red flag beside your name for management. You also probably don't want to go that route unless you are actually prepared to leave... there's no guarantee that they will agree to give you a raise. I left a company this spring after ~4 years and thought I was in a very good position to get a counter offer. I was lead for one of their most important projects and was slated to move into an architect role to oversee a major revamp and expansion of that project. When I turned in my notice I told them (truthfully) that I wasn't necessarily look to leave if they were willing to make a counter offer, but the answer unfortunately was that they couldn't go that high for my role.

I was under the impression that taking a counter-offer is unwise as it tends to mean they fast-track finding a replacement for you, as you're clearly disgruntled enough to find/accept other work and a salary bump generally won't fix the reasons.

Then again, this employee has just presented you with evidence that maybe your compensation isn't competitive, which is something you can bring to the higher ups to increase your budget. If you're not competitive, you'll have retention problems and business will ultimately suffer.

So you got the best rate you could at the time with the information available, but competing offers could change that equation.

The situation is essentially this: someone from the market just got a better deal. Maybe because of the current market situation, maybe because they are just good negotiator. How on Earth does it entitle everyone else to the pay raise? And if you think so, do you also think that when the next hire accepts an offer with less comp - everyone else should have a pay cut too?

> someone who had the same job title and the same experience

There's no such thing as the same experience. Every human being is unique, and every experience is unique too.

Anyway, getting offended without even talking to your manager, let alone just plain asking for the raise, is sooo counterproductive.

AND someone decided it probably costs less than hiring a replacement for you.

As far as I can tell, management that can see beyond the idea that your current payscale is what you should be payed is pretty rare. There's just something about anchoring on a price once it's negotiated.

That's the key. I want to know what reasons. It is the best possible feedback for me. If you want to earn X more, you need to do this and that like this colleague does.

It will force management to have better salary policies. I have seen people getting offered almost doubling their salaries when they say that they are leaving. Just because they were badly underpaid to begin with.

Openness forces for better justifications of your actions.

> Besides, even as a hiring manager, I really think it's none of my business how much that previous employer valued this person. What matters is here and now. I just ask people how much they want then I counter with what we're comfortable paying, and then we negotiate.

That's a really good approach. And looks like you are someone that will easily be able to justify the salaries of your hires. But there is a lot of managers that will not, and they will need to get better at their jobs if salaries where open.

Why do you say this? Surely underpaying people is one way to make them leave but not the only reason. Some people think “the grass is always greener” elsewhere. Others don’t last long because they are not easy to work with. Others are not great employees and so are encouraged to move along sooner rather than later. Lots of possible reasons. Most do not signal the type of person I want to hire.

Did this, got raise. I had an offer and other company offered me more, but I decided to stay anyway. It's been a year and I don't think I'll get another raise any time soon. I really regret about mine decision.

I'm curious - how did you end up accepting that job in the first place that was underpaying by nearly 100% ?

I've never tried it myself, but it's supposed to be common knowledge that perhaps more than half the time a company is forced into granting you a raise to match an offer you have in hand, they're only doing it long enough to arrange replacing you. There are certainly many reported exceptions to this, but why take a chance with a company that's already shown they don't respect you?

Most people are not skilled negotiators. That aside, the balance in that negotiation is in favour of the employer at the start. At that point you are worth nothing to them. They can just go to the next candidate. You on the other had have a mortgage, debts to deal with, bills to pay, family to feed, etc. It takes time before that balance tips towards the employee. That's when the company needs to reassess what they're paying you.

> There’s no bluff being called.

They know you're worth more but at your yearly performance review they'll do their damnedest to only give you cost of living if even that. Then they put the burden on you to prove you're worth more than that. "What did you accomplish this past year?" They know what you did for them. They're hoping you were too busy to document it yourself. "We can give you more but you have to take on more responsibilities." They were paying you less than you were worth for your current workload before this! This extra work will mean even more unpaid overtime which will nullify the raise and even turn it into an effective pay cut. Even if you do manage to document your past work and/or agree to more work you'll just hit the arbitrary raise cap they put in place. "This is the best that we can do."

They are bluffing. They're gambling that you can't find a better offer. Or that it's too much hassle to switch. But once you call their bluff that's when you get to finally see what they really could have been paying you.

> act rationally and in their best interests

Companies very rarely do this for long term goals. Short term gains is top priority. Saving money on payroll now is better to them than mitigating the big financial loss that loosing a key employee would cause in the future.

That is the reason why we see this counter offer behaviour each and every time. You've change the "he's going to quit sometime in the future" to "he's quitting NOW". You've now made it a short term issue and that's what finally got them to react.

You should negotiate, but do so from a position of strength and leave emotion out of it. The reality is that location-based pay is standard. This reason for this is labor market incentives. Whatever your manager says is not reality, it's just a story to try to placate you. How defensible the story is or how angry and demotivated you are about it is absolutely meaningless in terms of outcomes, and the sooner you come to terms with that and look at the situation from a purely rational perspective the better.

What matters here is how much leverage you have. The best leverage is having an offer in hand for more money. Short of that, if you are perceived as a top performer, that could confer some leverage, but keep in mind that location-based pay is probably baked into the cost structure of the entire office. You are likely better served by a strategy to demonstrate your individual value so that your raise isn't seen as precedent for why the entire location pay scale needs to increase.

That's why, if possible, you negotiate when you already have another offer. I negotiated a +50% annual pay raise at my last job because I was completely willing to walk away for another job.

I also got the raise because I was playing an important part in a high value project at that time. I felt a bit guilty about the possibility of leaving the project in the lurch, or negotiating when my value was at its highest. I thought it would lead to resentment from my managers if they thought I was strong-arming them.

But they agreed to the rate, and never showed resentment. Every successful business person or trader knows to sell high, but sometimes the rest of us forget.

> If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running.

If you can easily be replaced by a new hire or a consultant, you don't deserve the higher salary.

I'm sorry to hear that.

> I could probably find a new better paid job in a few weeks, but I don't really want to quit, the team is nice, I kinda like this work environment, it's a full remote gig with decent hours.

It sounds like there are real plusses to your current position, yet you are nonplussed. Would you truly be considering interviewing elsewhere if you felt fully satisfied with your current position?

> I've been thinking about interviewing for jobs that I don't plan on getting, just to get a better offer and force my boss hand, does that sound like a decent idea?

Generally, one may not force a superior's hand, at least not without real possibility of resentment and political instability. If you're going to the trouble of interviewing, wouldn't it be worthwhile to consider your options?

> What do you usually do in this kind of situation?

If I were in this situation, I would certainly feel under-appreciated at the very least. I would seriously consider my options, and I would not make any decision in haste. Nor would I take too long to decide. Carpe diem.

What would I have to lose by interviewing? Wouldn't having more options to choose from be advantageous, regardless of which option I were to choose? Optionality is valuable.

Frankly, if I were in your position and I were to have an outside offer in hand, I would not volunteer that information to my boss to elicit a counter offer. I would just leave. After all, he already made it known how much -- or how little -- he thinks I'm worth by rejecting my proposed raise in the first place. Even if he were to match the offer, would he really think that I'm worth it? How might it affect me in the long term if I were to stay, with or without the raise?

Best of luck, and I hope things go as well as they can for you.

It's painfully true very often.

I worked on a team where I was one of the most proactive people on the team and was one of the top performers (well, at least IMO).

I joined the company with an already relatively low salary because in the middle of covid shutdowns, the the startup I worked for didn't look stable enough, so I joined the bigger company even if their offer was the same as my previous salary.

After almost two years later, I asked what can I do and what's the process for salary increase, they told me that "sure, we can raise your salary"...

BUT:

* the company only raises salaries once a year, and that comes next year April, so I'll have to wait 7 months

* usual increase is 5%, if I'm very lucky, I might get 10%

* this increase is not given every year, so if I get it this time, I'll have to wait two more years for my next 5-10% raise

* I'll have to go through a long evaluation process with HR, which means lots of extra meetings spent begging and explaining that I'm actually pretty good

They think this is all acceptable while I had multiple offers with very little negotiation, all offering me 20%+ increase.

In the end, I got a 50% increase and on top of that a significant amount of stock options from a company that really has a potential to grow and go public.

Yeah, I can't be a lifer with those conditions.

That is not my experience at all. Saying that I am leaving brings salary pay raise offer immediately, asking for pay raise brings vague promise for pay raise if this or that, yadda yadda. I cant recall manager raising salary proactively to anyone, ever.

It is not that they would not value their teams, but they do see world in a business negotiation way and see it as their job to manage expenses too.

The threat of disloyalty being punished if there are cutbacks does not seem like all that much threat to me. There are so many factors in the decision, including who likes who and who drinks with who, that this is just a tiny drop in the bucket. Nevertheless, when there are cutbacks, having recent experience with job search and idea about how much money you can get elsewhere helps way more then theoretical sympathy - it reduces stress even if you are one of those who stay.