This does suck though. To start, a counter-offer-based model begs discrimination. You should be getting yearly raises commensurate with (at absolute bare minimum, not even necessarily accounting for inflation) the increase in productivity from year to year.

I see that a lot with just the starting percentages of yearly raises. Most companies never keep up with market value, and by the time you've spent ten years there, you're making much lower than the industry standard.

The worst is employers who have some 1-5 scale for yearly performance and they gatekeep bosses who try to give out too many 5s. It's not a competition among your peers. If the whole team is doing good and working hard, then reward all of them.