yes, don't settle. find a good environment that you like (whatever the case may be) or quit. in 25 years if tech jobs are scarce this would be bad advice, but it's not 25 years from now, it's december 2015.
as an employer myself, i would say that once an employer knows you are even thinking of leaving, the relationship is poisoned. leave immediately. you are the first person in line to be let go for any reason, possibly no reason at all. this is why you should only ask for a raise in the local context (based on your performance, basically), and never, ever use 'i have another offer' as negotiating leverage.
there are plenty of practical reasons for this but there are also just shitty, spiteful people out there in positions of authority.
as an employer myself, i would say that once an employer knows you are even thinking of leaving, the relationship is poisoned. leave immediately. you are the first person in line to be let go for any reason, possibly no reason at all. this is why you should only ask for a raise in the local context (based on your performance, basically), and never, ever use 'i have another offer' as negotiating leverage.
there are plenty of practical reasons for this but there are also just shitty, spiteful people out there in positions of authority.