Manager keeps hiring higher paid employees?

Question

I work for a fortune 100 company and I'm at my wits end, they won't give raises. I was hired for significantly more than I was making previously, however I was hired at the lowest grade for my title. I have since been promoted, to make me equal to the lowest rank on my team (without a raise). But there are so many fundamental issues in our organization within the company I don't even know where to begin in explaining this.

• One person on our team, doesn't even deserve the job. He has none of the knowledge that the rest of us do, yet he has been tasked with responsibilities that any of us could do. Our manager doesn't require the same productivity from him that he expects from the rest of us. He works a couple hours a day and watches movies the rest of the night (graveyard).
• Another employee was promoted shortly after he was hired, with a small raise, yet he works the graveyard shift and watches movies all night.
• My other coworker has a comparable skill set and work ethic to mine, and has the same rank title. He and I have historically done most of the work.
• Someone else on our team that didn't have a good work ethic either has recently quit.

Before the last employee quit, they opened a position on our team which would have been a promotion for most of us. But my managers manager was adamant about filling the position quickly. Rather than giving the existing employees on the team a chance for a promotion and raise, my manager elected to contact a previous employee that had quit several years prior (I helped interview him). He ended up getting hired for a grade above the posted job because he wanted more money, obviously because he understood he would probably never get a raise. This employee doesn't do anything extra special to warrant his higher title.

I referred a friend for the open position (same grade as me) for the last employee that quit, and I've recently come to know that he has been hired. But, my friend is going to be paid much higher than me or the other productive employee. I would be happy for him but I have never gotten a raise or any recognition for my high productivity.

My questions:
Should I approach my manager and speak with him about my discontent? Keep in mind that we have been asking for raises for quite some time but told we will never get them.
Is this company even worth working for?

Answer 1

If your company doesn't give raises, but hires someone from the outside with equal qualifications at a higher salary, then it means they couldn't find anyone to do the job for your salary. In other words it should be possible to get a higher salary elsewhere. It should also be possible to get a higher salary at your company, but that is much harder. They are quite happy with the way that things are going right now and would be very reluctant to change them.

Announcing that you are looking for jobs elsewhere (if you don't get a raise) is likely to work against you. So one part of your strategy should be to look for other, better paying jobs, but without telling anyone at your current company. If you find a better job, take it. Don't try to negotiate a raise with this trump card; you would be a marked man at your company even if you manage to get that raise.

At your company the only strategy that may be working is to announce loudly to your manager (and to him only) that you are unhappy with the situation. Not that you are wanting to leave, but showing enough unhappiness that your manager thinks you might get the idea of leaving, even though you don't have it now. Rationally you would only leave for a job that pays better. But if your manager thinks you are very unhappy, you might irrationally leave for a job that isn't any better, just because you are so annoyed. He may try to reduce the risk by increasing your wages. Which improves things for you if your first strategy (finding another better paying job) is harder, or if you are quite happy with your job except for the pay.