They give you a 3% raise even though inflation is 8% because if they didn't then you might decide that it's worth the effort of going through the job application process until someone else hires you at a 10% pay raise.
That sounds like a dream. Last place I worked aa an employee, we got "col" 9which was actually less than 1/3 the government-declared col) plus as much as 1.1% merit increase.