Know the Numbers!<p>it's hard to find an answer to question 1, as those who know the answer don't want to make it public, but my guess is it's "whatever they feel like" depending on many factors. Those factors can be out of your control or not (budget issues, crappy project where your skills didn't shine, or you preferred taking it more easy because of your life choices)<p>If you salary is above average and you won't find companies with better salaries, then you're probably one of the highest paid in town, you should feel good about this. But if you know other companies around who pays better, then one course of action is to apply to those in hope of a better salary. If you have friends in those companies, try gathering information about their past year raise and their salaries. Try gathering information about friends in your current company too, but not close co-workers, as they might feel uncomfortable discussing this. Instead, since you're in a big company, ask people in a team far away from you, you don't need the exact number, but at least an approximate that you can use in your talk with your manager. Try to find the policy at your company, if they say somewhere (could be in your offer letter) the yearly raise is between 0 and X%<p>Regarding question 2: yes you want to make it clear that you want a bigger raise, but you don't want to appear greedy. You can mention cost of living in your town, the raises that your friends in your company got, or it's even better to mention the raises your friends got at the other companies, this will give a cue to your manager that <i>you know</i> you could get a better deal somewhere else. Don't say "I want more money", but instead show that there's a sound reasoning about why you want more money : The cost of housing is going up significantly, you want to start putting money aside for a future down-payment, inflation rate is X%, etc. Since you did a good job you think the You today is a better asset to your company that You last year, because you now have expertise in X, Y, Z, and delivered A, B, C ... , so you'd expect a raise that reflect this, accounting for inflation of course. Assuming you know the policy about raise between 0 and X%, and let's say last year you only got X/3% , you could say that you've made a lot of progress this year, try to make your manager acknowledge your accomplishments, and once he does, say that as an above-average you expect at least X/2% given the annual raise policy is between 0 and X%. Since inflation was pretty strong this year, you'd expect even more to catch up.<p>Finally, you might find useful advice on how to approach these kind of situation, better written, in the book "Getting to Yes"