Only in dumb organizations.

I transitioned away from engineering to data science in 2008. FreshBooks took a risk on me but they obviously were going to pay me as a junior data analyst.

I got 2 bonuses and 2 real raises in a year and a half because they could tell I was drastically improving my skills and had much more of an impact than they had originally anticipated.

If your organisation can't identify who is making a difference and do what it takes to keep them, then they're not going to win. That being said, most people asking for a 100% aren't being realistic.

Well. 100% is a tad high. I find 50% to be incredibly common.

It's not enough to identify the "talent". You have to identify it AND admit that you failed at identifying him earlier AND admit that other companies will poach him if you don't try anything AND you gotta know market-rate right (it can be really hard to find out, even for recruiters in your companies) AND you need to actually pay market rate (most companies don't) :D

By the way, if you get 2 bonus and 2 raises, if likely means that you were incredibly underpaid and it's possible that you still are.

>you need to actually pay market rate (most companies don't) :D

Most companies don't pay market rate? That's a tad incoherent? If most companies aren't paying 'market rate' then what should we all call the rate the market is paying?

Hint: what most companies pay is by definition 'market rate'

As another commenter is saying, though, there's a big difference between what most companies pay and what are the visible offers in the market.

Offers at or above the average rate appear, get filled, and disappear. Unrealistic offers below the market rate stay "on marked" for a long, long time - so if you're looking at "what's on offer today" you're seeing a very different list of numbers from the actual prices at which deals are getting closed.

It's same as in stock market - the 'market price' is the average of closed deals, but the visible company job offers is the equivalent of outstanding 'ASK' bids which are not really representative of market price.

Think in terms of offers. You looked for jobs and you had multiple offers at ¤10, ¤11, ¤12, ¤15 (you may have more options with more numbers if you keep looking).

You took the job at 15 => Your market rate is 15, all the other companies didn't pay market rate.

Usually, your market rate is the best you got. There aren't many "best" by definition.

Assuming that the ¤10 company failed to recruit but ¤11 and ¤12 companies did manage to get a fitting candidate at that price, the market rate for that position is ~¤13, as that is the average rate at which the deals are happening - yes, offers that don't result in deals aren't relevant to the market rate, but at the same time someone asking for a raise to ¤15 and not getting it also isn't relevant to the market rate.

I'd say it's the profile that is 15. The market rate is defined for a specific profile, not for a generic job ad.

The 11 and 12 accepted offers were for other people, that maybe couldn't get better than 11 and 12. Maybe they are less experienced? maybe the 15 company would have hired them both too... but only at 11?

We could say that the cheap companies are under market or that they're only in the market for junior level <profile> (even though they don't advertise it).

We both agree we have to look at the closed deals and the details of the deals =)

Oh that was years ago. IIRC, I was started at $55k / yr plus stock options in 2008, which at the time had similar exchange rates to the USD. Seems low on these days, but was around $10k more than what I'd been earning as an engineer.

50-100% is always going to be extremely organizationally difficult, and it doesn't come down to evil managers being penny pinchers.

- Even if the individual in question had 2x the productivity of the other developers on the team, doubling their salary relative to other employees trades that one developers risk of leaving with the entire rest of the teams.

- If you have enough divergence in compensation that two people at the same level of the hierarchy doing the same role (i.e. an intermediate vs. a senior) can have pay differ by 2x or more, you should be absolutely sure there's no bias to your decisions, whether it's along an identifiable group, or just plain ol' favouritism.

- Frankly, I haven't seen much need for such lavish differentials in salary in the first place. Most people are only motivated by salary to a point. Star performers want to be recognized, and not just with a pat on the back, but give people a good place to work and pay well in general, and you shouldn't need to worry about crazy raises like that.

Lemme explain how it works.

The first thing you need to be in a > 50% raise situation is an employee that was acquired for incredibly cheap. (Epic combination: one of this first jobs + don't know the market + just came from abroad). [That makes your first two points moot because that guy is the one making significantly less money and he's not identified at the right level].

The second thing is that he's actually good and he's been working for 1 year here, doing valuable stuff. He's gained a lot of value in the meantime and he can totally leverage the job he's done to sell himself in an interview.

Let's give some numbers. The dude started at $80k base with little advantage. Over time, maybe he's gone up to $90k and you got an incredible healthcare plan. It's fine from your point of view.

From the point of view of your competitors. Your guy has been vetted by your company. He's proven and he may even have rare skills that are now easily noticeable. They will offer "market rate" and fight each other mercilessly. The package will be around $150k base (which is nothing extraordinary for that position) + $40k in yearly bonus/stock that he didn't have at your company + various other advantages + they'll also pay $50k in recruiter fees cuz he went through a recruiter.

Now, you've got a guy that is paid $90 at your place that other companies are willing to pay upfront $240k to acquire. Hope they'll never find out about your gold ;)