I have been working at the same large company (over 5K employees) for ~20 years. They do "merit-based" raises each year in January, based on the prior year's performance. Each year I have gotten outstanding performance reviews, and thus have been given an "above average" raise, which has still been pretty low (in the ~3% range). So I'll get told something like that my performance was excellent, so even though the average raise this year is 2.6%, I'm getting 3.1% (and I should be happy that I'm getting an above average raise). The way they company does raises is that they give a certain "raise pool" to each department, and they have to divide it up among employees. We don't really have any slackers in our department so it's hard to argue for a bigger piece of the pie when everyone is deserving.
They do their own salary surveys for each job category to make sure they are paying competitively. They say they aim to pay on average 105% of the industry average (adjusted for location, I believe). In the past, my managers have been vague about where I stood relative to the average, and I didn't push hard enough to find out. This year I found out that I am being paid 90% of the industry average for my job category. So I asked my manager why, given my very high performance rating, I wasn't being given a bigger increase to get me up to at least the industry average, and got the same fixed raise pool story. I asked why the department couldn't get additional funds if they have high-performing employees being paid below the industry average, given the company's goal to pay above average. He said they might be able to do that in an "out of cycle" action in the spring, and I should ping him again at that time. But he said that even then it would probably be done in small increments and could take years to get me up to the average. He said that there were people in our department being paid closer to 80 or 85% of the average, so they were the top priority this year for any extra funds they could get for that during this pay raise cycle. He did say that if I had other offers, he could bring them to upper management, but I don't really want to play that game. (I like the job and don't especially want to change jobs.)
Should I be more aggressive about this? I've been pretty passive about accepting whatever they gave me in the past, but I'm beginning to feel taken advantage of. (I'm a woman, which I mention because I know women are traditionally less aggressive about this kind of thing than men in the same roles.) My manager admits/agrees that I am underpaid given my role and performance, but claims "his hands are tied".
Although related to Is it standard for big companies to be inflexible on raises and promotions? I don't think my question is a duplicate (though you may disagree). The primary difference in my mind is that the company has a stated policy to pay above average, and admits they are paying me below average despite excellent performance. So I feel like I have the data to support asking for more, I just don't know how to handle it in a large bureaucracy.