This has actually happened twice recently. It’s a mistake.
In one of the situations, we didn’t give the person quite as big of a raise as other people would get under the same circumstances because there were HR things going on. For the other person, it was more for appeasement but we didn’t know if it would solve the underlying HR issue. It solved the situation for about a day then the same issue popped back up soon after.
In retrospect, if you have an HR issue with someone, you need to red flag that and when their annual review comes around, they don’t get a raise. Red flag things by having written warnings. The first step is an oral warning. It’s clear to the employee that this is a warning; it’s not a casual conversation. Step 2 is the first written warning, then a 2nd written warning, and finally, termination.
If you have someone progressing through those disciplinary actions, they should be considered on a different path than the other members of the team.