I worked in a large multinational which had a very structure annual review process, with defined objectives, targets ('what to do') and approaches ('how to do it', e.g. teamwork) agreed up front. The pay elements (salary increase, bonus, stock) was based on the performance review rating.
However, the rate was ultimately subjective, and was in the hands of the line manager. There was also the infamous 'curve' which said that in any team of 5+, there would have to be at least one underperformer and one outperformer.