I agree. If you honestly believe you're underpaid compared to market value of your skills, and you're otherwise happy in your current position, it's a good idea

I agree. If you honestly believe you're underpaid compared to market value of your skills, and you're otherwise happy in your current position, it's a good idea to politely say that to your manager (in private of course). I'm in management, and if one of my employees came to me and said that, I would definitely hear him out and do whatever I could to make it right. Even if I didn't feel he deserved a raise at that time, I would tell him what I felt he needed to work on in order to earn one. But if someone came to me with another offer in hand, I would be extremely unlikely to make a counter offer. At that point it is just too late. And on the other hand, if you are unhappy with where you work or the people you work with, and generally hate your job, but are seeking more money as consolation for your complaints, you're probably better off just going out and finding a new job, because more money alone won't fix your unhappiness for very long.