As an expert in the field of human resources and compensation, I can provide you with a comprehensive understanding of what constitutes a "good pay raise." The concept of a good pay raise is subjective and can vary greatly depending on a multitude of factors including the individual's current salary, the industry, the cost of living, the company's financial situation, and the employee's performance and contribution to the company.

Step 1: Understanding the Market
The first step in determining a good pay raise is understanding the market rate for the position in question. This involves researching salary data from various sources such as the Bureau of Labor Statistics, industry reports, and salary surveys. The goal is to ensure that the employee's salary is competitive with similar roles in the same industry and geographical location.

Step 2: Evaluating Performance
Performance is a critical factor in determining the size of a pay raise. High-performing employees who consistently exceed expectations and contribute significantly to the company's success are more likely to receive larger raises. Performance evaluations, feedback, and objective metrics can be used to assess an employee's contribution and justify a higher pay raise.

Step 3: Considering the Cost of Living
The cost of living can have a significant impact on the perceived value of a pay raise. In areas with a high cost of living, a larger raise may be necessary to maintain the employee's standard of living and to keep the salary competitive.

Step 4: Company Financial Health
The financial health of the company is another important consideration. Companies that are doing well financially may be more inclined to offer larger pay raises, while those struggling may need to be more conservative with their compensation budgets.

**Step 5: Legal and Regulatory Considerations**
It's important to ensure that any pay raise complies with all relevant laws and regulations. This includes minimum wage laws, equal pay laws, and any other legal requirements that may apply.

**Step 6: Communication and Expectation Setting**
Clear communication is key when it comes to pay raises. Employees should understand how their pay is determined and what they can do to earn a raise in the future. Setting clear expectations can help to manage employee expectations and avoid disappointment.

Step 7: Special Considerations
There may be special circumstances that warrant a higher pay raise. For example, if an employee has taken on additional responsibilities or if there is a shortage of skilled workers in a particular field, a higher raise may be justified.

Conclusion
Over the past four years, the average merit increase has hovered around 4 to 5 percent. While a 10 percent raise may seem high, it's not entirely unrealistic in certain situations. A raise as high as 10 percent is generally reserved for employees whose salary is not competitive with the market, or for those who have made exceptional contributions to the company. However, it's important to remember that every situation is unique, and what may be considered a good pay raise for one employee may not be the same for another.

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Over the past four years, the average merit increase has hovered around 4 to 5 percent, so I think it's unrealistic to expect a 10 percent raise. A raise as high as 10 percent is generally reserved for employees whose salary is not competitive with the market.read more >>