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How to deal: hiring Sr level on your post after a denied promotion request?

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You're being punished for doing a good job. From your description, this seems like it might be a cultural thing at your company. If it is a problem now, it will be a problem later, and for as long as you work there. When you give your two weeks (or however long) notice, be prepared to walk out that day. I have had bosses who believe that technical people, especially those with elevated access to company resources, should leave as soon as it is known they are quitting. On the other hand, be very prepared to be firm about your departure date. It is common for a boos to request that you, "finish up a few things" before you leave...don't entertain those requests. Most importantly, as Adrian says above, make sure you have another job before doing anything outlined here!

I would avoid getting an offer from somewhere else and using it as leverage. Given your description of the workplace, you might get paid a bit more to keep you around, but you will certainly never get a promotion, having demonstrated your 'lack of loyalty.' If you have an offer from somewhere else, go to your boss with every intention of quitting. If your boss then asks for what he can do to keep you around, gently refuse, and nothing lost. If your boss asks again with a stronger level of interest, be honest about what you want. Again, if you don't get it, no harm done, and if you do, great!

MOST you enjoy working there? Based upon the little bit of information you can gather from a forum post, I would venture to say that *I* would not enjoy it. Evaluate that carefully, because that ultimately determines the path you should take. you do not HAVE to work someplace that you dislike.