Ben Horowitz wrote a great post on why 'rewarding' this kind of behaviour can be damaging to your company in the long run. From: http://bhorowitz.com/2010/08/2

Ben Horowitz wrote a great post on why 'rewarding' this kind of behaviour can be damaging to your company in the long run. From: http://bhorowitz.com/2010/08/23/how-to-minimize-politics-in-your-company/ http://bhorowitz.com/2010/08/23/how-to-minimize-politics-in-... Specifically, you will be rewarding behavior that has nothing to do with advancing your business. The employee will earn a raise by asking for one rather than you automatically rewarding them for outstanding performance. Why is this bad? Let me count the ways: 1. The other ambitious members of your staff will immediately agitate for raises as well. Note that neither this campaign nor the prior one need be correlated with actual performance. You will now spend time dealing with the political issues rather than actual performance issues. Importantly, if you have a competent board, you will not be able to give them all out-of-cycle raises, so your company executive raises will occur on a first-come, first-serve basis. 2. The less aggressive (but perhaps more competent) members of your team will be denied off-cycle raises simply by being apolitical. 3. The object lesson for your staff and the company will be the squeaky wheel gets the grease and the political employee gets the raise. Get ready for a whole lot of squeaky wheels.