If you're a reasonably well-performing IC at US big tech, your "boss" is often also a grunt with little real control over your salary. Just a different flavor grunt from you. In my experience, these managers are often happy to throw money at you but don't have much latitude to do so. Having a competing offer gives THEM leverage to try to convince those guarding the money hose to open the faucet a little.

Yes! I've done it several times. It's one of the best and most reliable ways to get a raise.

It's "business." Your manager isn't going to make a counteroffer, then wait a month and fire you. I mean, they might if they're a total D.bag, but I've not yet had that experience. And if I had, I'd already proven to myself and my manager that I could get a higher-paying job elsewhere. It'd be a minor annoyance on my side.

I don't want to give away specifics, so take these numbers with a lump of salt; the ratios are correct:

Went from $50k/yr [1]-> $80k/yr [2]-> $120k/yr [3]-> $205k/yr

[1] The company wanted me to stay and raised my pay to match the competing offers.

[2] The company wanted me to stay and raised my pay to match the competing offers.

[3] The company didn't want to pay that much, so I put in my two weeks and moved to a different company.

From my experience, I've found that requesting a raise without a competing offer often leads to a small or no increase in pay. However, when I've approached my manager with a better offer in hand, it has consistently resulted in substantial pay raises.

It depends on the counter offer and your situation. I would have agreed with you, but a couple years ago I told my employer that I had a job offer kind of land in my lap (I wasn't actively looking), that it was good and I was inclined to take it. I wasn't unhappy at my current job, but the change in title/seniority and compensation of the job offer was definitely worth it. They didn't want me to leave, so they countered with a very strong offer, which I decided to take and stay with the company. If you want to leave because you're unhappy with other aspects of your job, then I agree that accepting a counter offer doesn't seem like a great choice.

That is literally how I got my last promotion. I set up a meeting and told them I had an offer I intended to take. They had a 20% raise and promotion approved within 24 hours.

I also routinely get asked by managers for promo recommendations for coworkers thinking about leaving. IF they refuse to counter, then you should be asking yourself why you are staying.

You cant pull this maneuver more than once or twice, but it lets them know you are serious and wont just whine and accept token raises in future negotiations.