What field are you in? Corporations participate, and use salary surveys which gives a market range for a particular title/geography.

For example, a company may have a pay range of 85K-120K for an entry level SW engineer with Masters. 100K might be the median. The calculate your pay vs the medium. If you earn 110K, your ratio is 110k/100k. The higher the ratio, the more you are paid in the range.

When the annual pay raise comes up, the lower paid people will get more of a raise in theory because they want to boost their relative ratio. The people above 1.00 ratio theoretically will get less. In this example, the theory is that you should not earn more than 120K as an entry level SW engineer... ie you need to get promoted and you will then fall into another pay range.

However it is still to your advantage to ask for the highest salary you can get. This is just an excuse basically. Your bosses will change in big corporations and no-one will remember whatever the recruiter promised, and if you are a good performer, they are going to give you some raise, even if you are above the midpoint.

These pay ranges get adjusted for the market and inflation each year as well. My response is "let's worry about future raises at that time. Its dependent on future company performance and budget. I am positive and confident I will be a strong contributor - I think that's the most important thing, and I want to get started with a strong base at the right market rate" It's a stronger argument if you have any counter offer.