That employer doesn't sound like they're one I'd like to work for, unfortunately I have worked for a couple like that. Measly raises, and even then, only when you twist their arms.
Not willing to relocate, I've been lucky to stay employed, let alone get any decent raises in the last 15 years.
I think I see some upturn in the local economy though, as I have managed to switch jobs twice in the last 3 years, with a nice raise each time, and the added benefit that I'm now back to a 5 minute drive to work, which increase my net income, in gas savings.
Don't have much more to add to previous comments as far as approaching the employer, but you'll find quickly that the biggest raises you'll ever get are when you switch jobs.
Interestingly, about a week after I posted that I got a call wanting me for a job making almost 40% more than I am now. Right in line with my examples. Pretty solid offer (in-house, not a headhunter) with relo assistance in addition.
I got a 12% raise by turning down a first intra-company UK->USA transfer offer. Surprising what you can get if you put your foot down, something we engineers aren't that good at doing.
