Doesn't work in most cases. My wife, after a lot of encouragement from me, tried what you suggested. She told the current employer that she had not gotten a decent raise for the past 4 years. Her peers had gotten much better raises because they showed job-offers from other employers. She was getting a lot of calls from other potential employers too, but she didn't want to play the ransom game (I have this offer, now match it!). The employer told her that they can't offer her a good raise till she does exactly that -- bring an offer from outside. The problem is that when she does bring an offer and they try to match it, she'll not be interested in the match because she'd have made up her mind to leave.
This policy seems to attract and keep the wrong kind of employees -- those you're willing to play the ransom game from time to time.
IMO, you guys are putting too much stock into worrying what people might think of you. It is just that, a game, and only those who are willing to play can come out the winners. _Wages are your livelihood_ and if the only way to get a fair increase is to go outside and come back then so be it. I don't think people would look down on you for doing so if you were legitimately not being paid fairly.
You are right. I'm glad she finally tried to have a conversation about it. In a way, that conversation helps one come back to the right mind-set about the employer-employee relationship. Staying in a company for more than 3-5 years may be one of the best ways to get underpaid.
Does that make those people the "wrong kind of employees"? Why? Business is business and employers have no business paying their employees unfairly. Sure, if you're paid fairly then that's a different story, but I'm not going to invest myself in a business that is potentially ripping me off.
I think assuming that someone isn't invested is a faulty assumption. If I had made up my mind, I wouldn't give you a chance at all. I would just take the offer and put in my notice. At the very least, someone who goes back and gives their employer a chance to meet an offer is doing things respectably and at most has some value in their current employer, enough so to give them a chance.
You make a good point, but what I was aiming at was that people shouldn't have to threaten to leave to get a pay rise, it should be a discussion. Threatening is a hostile move, not a negotiation tactic.
The first part of your response sounds agreeable - I suppose it's not the "more money" aspect as much as the "threat" aspect which shows that for one reason or another the relations between the company and the individual have gone beyond amicable negotiations into ultimatum territory and the employee is not very savvy - 9.9 times out of 10 the company has far much leverage in these sorts of negotiations.
But the rationale sounds a bit weird to me:
"they're not invested anymore."
How could an employee be invested in a company if they've not actually invested? This sounds like an employee should have some sort of weird feudal allegiance for the corporation they work for.
Exactly! But the "bring offers from outside to get real raises " policy tries to keep exactly those kind of not-invested employees and forces invested employees to quit because they won't get good raises without looking outside.
This policy seems to attract and keep the wrong kind of employees -- those you're willing to play the ransom game from time to time.