Your manager is correct in the sense that it is quite fair to use various criteria in the raise determination process, but it sounds like there is some unfairness in this process as well.
It is fine for your manager to say that many criteria are used in the raise process, but you should know exactly what those criteria are. If there are factors that are playing a role in determining increases, and you are unfamiliar with them, that is unfair to you.
Looking further at the fairness issue, there is a strong sense of unfairness in granting people the same amount of pay for markedly difference performance. In fact, one of the primary sources of pay-related dissatisfaction is not the pay per se, but the perception that others are doing similar work or even inferior work, but are being paid the same or even more.
And finally from the fairness standpoint, it is not even fair to a company to have a raise policy that is generating dissatisfaction and ill will. A first rate raise policy contributes to employee satisfaction, motivation, loyalty, and commitment. An inequitable raise policy only contributes to dissatisfaction and turnover.
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