It creates a lot of unnecessary tension between management and employees if employees can't just assume that they'll be rewarded for outstanding results and don't have to ask for it. If there's a tacit agreement that if you do great work you'll get a raise with a quarterly or semi-annual review process, employees don't have to get distracted by thinking about when they should ask for a raise or whether they need to get a competing offer to get leverage to ask for a higher raise.

Management might have better things to do, but if this creates an atmosphere where employees feel under-appreciated, they'll leave, and this churn can really hurt the company, which makes it a huge problem for management that could have been avoided by rewarding high performing employees earlier.