[polymerase]

This is shortsighted because the employee may already be sitting on an offer/is willing to leave. If a good employee asks management for a raise outside of the annual performance review cadence, and is rejected with "Ask me after performance review", management shouldn't be surprised to receive the employee's 2 week notice.

[scotty79]

The point is, people are usually not proactive about money. Usually they don't ask for more money if there's a schedule for possibly getting more.

In industry where employees are expensive and they switch jobs roughly every two years anyways it makes total sense. You get to keep employee for another six months for same salary on he may think that it's what he deserves.

Key employees who ask for more, get more. Non-key emploees get "wait for it" because nobody cares if they leave. And some key employees don't ask.

I agree that exploiting your employees it's short sighted but for most businesses short sighted works good enough.