As we go into the annual review process, HR is always quick to point out that the employee evaluations have no direct correlation to the amount that an employee might get as a "merit" increase. I have two issues with this:
When increases come around every year, the vast majority of employees get a "merit" increases in the 1-3% range. This is essentially a cost of living adjustment. In fact that amount is usually less than inflation, so most of us are getting paid less every year (relatively speaking).
If an employee is rated as "developing" they are ineligible for a "merit" increase. Managers are pressured to identify approx. 5-10% of their team who fall into the "developing" category. These employees don't even get a cost of living adjustment, which is, for all intents and purposes, a pay cut because of forced ranking of team members.
HR points out to managers that its ok to label someone as "developing" if they've been in the role for <1 year, so a lot of managers put their newer employees in that category. But based on your hire date, that might mean you may go 18+ months before getting any sort of cost of living adjustment. For managers without any new team members (which are most of them after all the WFRs), they can find themselves stuck tagging a few people who may get a rating they don't deserve and its corresponding pay-cut because of the stack ranking.
Because this has been brought up, HR says they're evaluating the policy on "developing" employees not being eligible for increases, but that opens a can of worms if they do.
More and more, it feels like yet another underhanded way of getting people to quit so the company can continue to fly under any government regulations for lay-offs that exceed a certain threshold number of affected workers. In this case, the idea is that you get lower performing people to leave, however, I'd argue that in some teams, there simply aren't people who are truly "developing" and thus get pushed out because of this manipulative process.
I sincerely hope that this is still just a holdover from the previous regime's culture that will be corrected by the new executive leadership team, but I'm not holding my breath.