Unfortunately in a lot of corporations, that's how it works. You gain experience and become more valuable, but due to corporate policies, your department is handcuffed in how much of a raise they can give you. So in pretty short time, you are underpaid and there's nothing your manager or department can do for you. They simply don't have the ability to authorize a raise more than a certain amount. So you get your 5% per year, meanwhile the new guy is hired making more than you, despite having less skills and less experience now. But it's easier to get in a higher starting salary for someone than it is to get through a raise for an existing employee. Unfortunately all you can do is find a new job.