Unfortunately, at least in the U.S., unless there's some kind of formal & documented evaluation process for compensation, they're opening themselves up to a whole host of potential lawsuits.

One useful strategy we've had is to do 90 day (quarterly) quickie evaluations followed by a formal, but succinct, annual review. If both parties are doing their jobs, "pathway/goal" guidance given informally during the quarterly process and throughout the year should lead to very little surprises in the annual review.