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I have only worked at one company and this is my 7th year. Each year I received a 1.5% raise (to keep up with inflation). Recently I looked around and discovered how underpaid I am compared to the current market rate for someone with my skills/experience.

I had a discussion with my boss to request a raise to be more in line with market standards. Knowing that my 7 years of knowledge on the projects I've worked on are critical to the company's business, I thought this would be an easy discussion, but he turned down my request saying that the company does not have budget for a raise.

Instead, he has offered me a bonus contingent on me training a more senior developer (in India, while I am in Europe) to make the organization less dependent on me.

I am not interested in resigning if possible, but I would like to know what tactics, if any, may be effective in turning a one-time bonus in to a base salary raise more in line with market compensation.

Question: Does anyone have any experience turning a one-time bonus in to a larger base salary package, or any other strategy to turn this situation in to my favor?

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    I am going to update your question to be a bit more in line with our guidelines (we look for concrete situations with concrete answers, not polling for opinion). I invite you to edit it after I'm done if you think I butchered it or left something out. In the meantime, if the no opinion polling leaves you confused, I recommend reading the FAQ and this post for a bit of insight. – jmac Apr 25 '13 at 5:21
  • be happy you got anything at all... Didn't get either a raise or a bonus for 5 years in my last job (neither did anyone else there below management level), had to move companies to get my salary back in the range it's supposed to be given my skill set and seniority. – jwenting Apr 25 '13 at 6:01
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    @jwenting having development in salary is very normal. Only when business is very poor in that sector I could imagine not getting a yearly raise. The job had better very good for it to give me less and less salary for the same work, and probably more and more responsibility. – Paul Hiemstra Apr 25 '13 at 9:48
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    @user327843 so they don't want to pay you more money, in stead give you a bonus in training your replacement in a low wage country. That does not sound good. – Paul Hiemstra Apr 25 '13 at 9:49
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    I think it is time for you to start looking for a new job, one where they appreciate you. I definitely would not resign, but just start looking and resign as soon as you find something new. – Paul Hiemstra Apr 25 '13 at 14:27
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This sounds like you are down to pure money - which is the hardest negotiation point - there's no in between win/win on money - whoever gets more money gets it from someone who gives up money.

Realize that bonuses vs. raises are quite different. Giving a raise commits the company to continuing to pay that value (and build upon it) yearly and the budgets are scrutinized much more carefully on raises than on 1 time incentives. What it sounds like he's saying is - "I can't justify the extra money from my budget based on the value you give the company." Instead, he can see a way to transfer the value you do provide to someone who may be more senior, but who is very likely to be paid less.

A thing to watch for here is what the outsourcing trends are. The current economy still has a trend of moving from high-salary Western countries to lower salary SE Asian countries. It sounds like that's what's happening here. Your competition for your position is not other potential employees in Europe, but employees who have already been hired by the company in India. Take a look at the salaries for those senior developers and figure that it is unlikely that you will manage a raise that exceeds them in the near term.

In the long term, the salaries will eventually balance out across the global labor pool - but that's a big economic trend, and it's going to take a while... don't ask me how long, I'm not an economist. But in the meantime, for an individual career, it's probably time to stop banking on your internal corporate knowledge and start looking at jobs that are less likely to get transferred to another country.

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Look at what your manager's solution was to you requesting a raise because you were a valuable member of the team: he offered you some money to take away the bargaining chip you were using! It seems like you've taken the right step in trying to get a raise (namely ASKING FOR IT and demonstrating value) but you were denied it. I would say that based on this, it is unlikely that you'll be able to backdoor in a permanent raise given this bonus.

Since the bonus is contingent on training a developer, a possible path for you to take is to perform the training well and suggest that you continue these duties - training others within the company - and that this added responsibility would come with a raise and a new title. This is assuming that you want to train people.

Otherwise, if you want to get market rate, it would appear you may have to go elsewhere.

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