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This is my second job at a mid-size company after my masters in USA. During the interview for the job, my current manager "verbally" told me that every year we will get hikes and bonuses, therefore, I should not worry about the career growth. Then he asked me whether I can stay at least 3 years in the company if I was offered a job. Although I have better offers (guaranteed bonus + hike every year) at that time, I like my current manager's approach (and also the work is very interesting), said yes and joined the company. It has been 18 months, so far I am very happy with my work and with the environment in our team.

However, although I got good annual performance review, I was offered just 1% as a hike and No bonus, though my company is doing well. Moreover, my friends in other places received 10% hike and some bonus. I am very disappointed with just 1% hike. Therefore, I have been interviewing with a few companies and recently got a good offer (higher designation + 20% hike on my current salary + RSUs + guaranteed bonus every year in written form). However, I really like the work I am doing with my current employer. How should I approach my manager now so that I will get a match with my current offer or good hike so that I can stay at my current employer? I don't want to sound like "threatening to leave the company if I was not offered hike". Moreover, is it ethical to leave now since I said yes for staying at least 3 years?

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    1% is not atypical for large companies right now The better offers tend to come from companies such as startups where you're taking more risk that the job won't be there in a year or two. – keshlam Oct 31 '15 at 15:13
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    You're happy where you are, but does anything cause you to believe you wont be just as happy at the next place? – weston Oct 31 '15 at 16:12
  • @weston: Good point. I really don't know whether I will be happy as much as I am now at the new place. That is why the dilemma. I don't want to burn bridges. – samarasa Nov 2 '15 at 1:46
  • Did you tell them the 1% was unacceptable at the time? Have you brought it up since? – Nathan Cooper Nov 3 '15 at 0:34
  • @NathanCooper: Yes I told my manager. He replied me that he will talk with higher authorities to make sure to provide a better hike next year. – samarasa Nov 20 '15 at 1:40
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Consider Other Options; Your Career is Your Responsibility

[I]s it ethical to leave now since I said yes for staying at least 3 years?

While managers and executives are human beings, companies (as corporate entitites) are not people, have no agency, and have zero loyalty to employees. While you may feel personally loyal to your manager, you should never place responsibility for your career progression in your employer's hands. If you have a better opportunity elsewhere, or leverage to improve your current position, then you have an obligation to yourself to choose the wisest course for you.

Unless you have a contract with no termination clause, which is unlikely, you should be able to leave any position with proper notice. As employment law varies from place to place, it may be worth a call to a lawyer or government agency to find out what rules apply to you as an employee, but I'd be very surprised if you weren't legally able to provide notice at any time.

You have no moral obligation to a fictitious person like a company, and any social obligations you may have with your management team should be balanced by their interest in seeing you succeed in life. A manager who expects you to turn down an unsolicited opportunity for advancement does not have your best interests at heart.

Politely Asking for a Competitive Offer

I like my current manager's approach (and the project is very interesting), said yes and joined the company. It has been 18 months, so far I am very happy with my work and with the environment in our team.

If you've received a better offer elsewhere, but would prefer to stay with your current company under better terms, then you should present your case more or less the way you did here. You should:

  1. Genuinely be prepared to take the other offer if your current company won't negotiate.
  2. Politely let your management team know that you have received another offer, but clearly state that you would prefer to stay with your current company if they can make a competitive offer.
  3. Describe why you might stay despite having other offers, now and in the future.
  4. Be willing to negotiate, as a competitive offer isn't always the same thing as an identical offer.
  5. Be professional even if your current company isn't, or chooses to be indignant about you putting your own career ahead of their own interests, especially when those interests aren't aligned with yours.

They can say yes, no, or "let's discuss it." Be prepared for all three possibilities, and then make the best choice you can for your own career.

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    +1, I'd add that some companies just don't renegotiate salary. It's not that they're being unprofessional or unreasonable, they just won't do it as they feel that it would cost them much more if they let all their employees do that. – panoptical Oct 31 '15 at 17:50
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Perhaps in the first instance you should have made it clear you were not happy with the raise and given them an opportunity to improve on it.

I did this once, and was told that I was already above market rate, only then I decided to look elsewhere. I did get another offer with a 10% increase, I took that to my employer who was happy that I had done so compared with just leaving. But I was prepared to leave, you must be.

Ultimately though a leopard doesn't change its spots, maybe you'll get that raise like I did, but next year you could be back to 1% potentially. I doubt they will write in raises and bonuses to your contract the way the other companies does.

is it ethical to leave now since I said yes for staying at least 3 years?

Yes. You didn't sign anything to that effect, just like they did not sign anything guaranteeing the hikes and bonuses (1% is not even a hike IMO). If they had kept their verbal agreement, you might feel an obligation to them but that's still your preference.

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    I think this is the wisest first choice. Starting off by requesting counter offers seems a bit confrontational. Your ability to find alternative work should be self evident. Imho you probably shouldn't stay somewhere that waits for explicit proof of that before offering you a raise. – Nathan Cooper Nov 3 '15 at 0:39

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