Construction costs are currently skyrocketing

Hmm I wish everyone such a job, but I see it ambivalently. If salary increases are always given without any performance improvement, the company will eventually go bankrupt.

I have yet to meet a company that would voluntarily refrain from raising prices every year ;) Standstill is an effective pay cut. With 10% inflation more than with 2%, but you still have less every year. And the constant training of new employees costs much more money in many areas than keeping the people by paying them properly.

No, really not. A company with motivated employees (through regular salary increases) is currently making more sales and profit and certainly won’t go bankrupt. Look at VW. They always raise wages strongly (now also over 8%) and on top of that almost every year there’s a nice bonus between 5000-7000 euros. And the company is doing well and the employees are happy about it. There are some who can afford an additional vacation as part of the VW family (but only if both work at VW).

Are you sure that’s the causal chain?
I am very sure that it’s the other way around. Of course, it’s also a cycle, but if VW didn’t grow, there certainly wouldn’t be such bonuses. The salary increases at VW probably come from collective bargaining increases as well.
Don’t get me wrong, my employer also gives generous salary increases and bonuses, but they are linked to performance and not to inflation.

Don’t get me wrong, my employer also gives generous raises and bonuses, but those are tied to performance and not to inflation.

Usually it’s a mix with you too, you just might not be aware of it. Or does an apprentice still earn as much today as 50 years ago? Or even the department head? Do they really perform that much better today than back then? It’s just a question of how it’s packaged.

But that just can't work, can it? So what can the company do about inflation? Not every company can simply enforce price increases, or they are then equivalent to shrinkage.

The argument, "everything is getting more expensive, give me a raise," is easy to make and obvious, but if the company doesn't earn more, it can't just raise everyone's wages across the board... So I'm surprised that this is such an automatic process. Especially, where is the motivation if I know I'll get my 2% every year anyway without changing anything? Or the other way around: If someone really puts in effort, does an amazing job, and is a high performer. Should I then tell them, yes, because of your performance the company earned 10% more, but we also had 10% cost increases and I have to compensate everyone for inflation, so you still only get 2% more, just like everyone else... Well, who would then go elsewhere? The high performer who actually makes it possible for the company to grow. That won't work well for the company in the long run either.

: Of course, there is market development (my employer did not even exist 50 years ago) also in the labor market... But then we are rather talking about new hires or, in the case of a justified raise, if there has been nothing for two years, a bigger increase is given. What I want to get at: It is not an automatism along the lines of, every year there is 2% more...

In our group, a minimum %-rate of wage increase is also set annually, which is based on the general business success and inflation, etc. In addition, further % are granted performance-related or bonus payments are made.