I may advise you to think twice about trying to negotiate your raise. If you work at a good company that values your contribution they're going to bump your salary as much as they can reasonably afford, keeping in mind fairness to your colleagues and the current budget.

In most cases your opportunity to negotiate is during the hiring process. It's hard to push back about your pay once you're hired. The best case is they give you the money because they're afraid you'll leave, but then they'll likely take the necessary steps to make you less integral to the business in case it happens again.

You might be better off asking for the opportunity to go to a conference, a workshop, take grad classes, etc. It's easier for them to justify those add-ons because the company stands to benefit from what you learn. It also makes you more valuable, which will possibly get you more money down the road.

It's the company's legal responsibility to maximise value to it's shareholders not employee salary. Of course you should negotiate. It's a commercial transaction.

Would you buy a car or house without negotiating, trusting that the seller will come up with a fair price ?

I agree that you should negotiate your pay, but only before you get hired.

It should also be done at any point where your responsibilities change ie. you are training junior developers where you weren't before or people have left and now you are the senior developer on a project.

This is the best time to negotiate a raise because you were hired for $X to do Y and now you are doing Z so the pay should change to reflect this new job.

I would also suggest that you treat any employment situation like an ongoing 6-month contract. After 6 months, figure out for yourself if the pay is still fair and talk with your employer about it. Basically treat it as if you were being hired for the first time. If you are not interested in continuing at that level of pay, then you should turn down continuing to work there. Of course, if you're happy then continue on.

Indeed. This is the reality that forces everybody in tech to switch jobs so often.

A company that was realistic with the value of their staff might find that they kept their good employees for more than a year or two.

Try not to worry about annual raises within your company. Chances are you'll get anywhere between zero and cost of living, with maybe the best performer in your group getting an extra percentage point. It's just not worth getting worked up over.

Think instead about increasing your value as much as possible while you're at this company. Once you're demonstrably worth a lot more than you're currently making, it's time to move on. The next guy will pay you what you're worth, whereas your current employer will find excuses to keep paying you what they're paying you.

Repeat this every 2-3 years early in your career and before long you'll be where you belong, salary wise. It's a shame that it works this way, because often one of your first companies will be a really nice place to work. If you stay there, though, you'll stay underpaid throughout your career.

I agree with this. I'm still young and relatively inexperienced, but I'm in the process of moving to a new job - taking a 40% raise.

My current employer offered 10% when I said I was leaving, and all they offer annually is the rate of inflation. I don't know how common this is, but speaking to a few people as I was looking for my new job, it isn't at all uncommon unfortunately.

I don't doubt that there are companies that are more keen to reward good employees, but as a general statement I concur with jumping ship every 2-3 years while young. I also believe that this will increase your value in itself (especially while you are young) as it will give you a wider experience, show that you are able to integrate into new environments and 10 years later you won't be stuck in the mould of your first company.

edit: I should add, I'm a Software Engineer in the UK.

This is one of those questions where people tend to reply with semi-snarky advice like "as much as you can get" or "it's relative". And they are right in a sense.

Still, based only on my own past experience (assuming your review is a positive one) I'd say 4%-5% is fair... more than that seems like a clear reward and message that "we need to keep this person", and less than that seems like "eh, here's something".

EDIT: As to your second q: knowing what similar people in your industry and area are being paid might be a good figure to know (and if you can do it tactfully, bring up) - but being able to point out some of your accomplishments in the past year that the reviewer may not remember or be aware of will probably get you farther.

At a minimum, I'd expect a cost of living increase that's roughly at the level of inflation in your country.

From there, it depends where you are in your career, what your performance has been like, what the going rate for someone in your line of work is, what condition the company is in, and what condition the economy as a whole is in.

Spending a few minutes at http://www.glassdoor.com/ might be a good use of your time to find market rates for people in your job.

4% to 5% is norm from my experience in NYC - however keep in mind how your company is doing.

As for squeezing out more - do as others have suggested and see if you are earning what you should be according to market rate in NYC and your level of experience. Bring any accomplishments to the table that have helped the company over the course of the last year.

Bottom line is, be fair to company in what you feel you deserve and be fair to yourself as well - don't be greedy.

netflix has it right: purely based on market rate at your given percentile. your percentile reflects your abilities, personality, hard work, etc.

which ties into...

there's a saying that the only way to get a raise in technology is to jump ship. i'm doing that right now and it's worked out to raise my salary by 21%. i'm in new york city. the place has seen a spike in 2010. the money's floating around again after a few tight years, there are plenty of people who think they have a good idea, and the only thing missing is more developers. all of you new yorkers out there, go get your raise. and don't accept any excuses.

ps: throw-away account.