No, 10% is a really good raise. I give raises that: 1) cover cost of living increases, 2) recognize a promotion, 3) recognize increased responsibility, 4) adjust for a salary imbalance, or 5) recognize increased training and output. I recognize special achievements by giving a bonus at year end.
So my raises typically have been 2.5% to 3.5% for cost of living. This year they will be 5%. I’ve given bonuses as high as $12,000.
Wish I had a nickel for every employee who thought they were underpaid. I suggest having a very cheerful talk with him. Yes, be cheerful. Tell him, “Bob, I agree that you deserve a raise. The only thing we disagree about is the size”. Then tell him what his raise will be. Don’t negotiate. Don’t patronize him. Don’t try to get him to agree. You’re the boss. Tell him this is what the job pays and if that’s not enough for him he’ll have to look around. And add that you would hate to lose him.
You didn’t ask. but a comment on your bonuses. I think it’s a mistake to give the same bonus every year. Unless it small, like $100 and a turkey. It becomes and entitlement if you do, at least in the employees minds. Vary your bonuses from year to year.
I didn’t understand the power of networking. (Service business.)