By validating this question from a leadership standpoint, you'll be able to navigate this question. Exhibit your understanding that some employees who receive constant praise throughout the year will be less let down by an average pay increase than if their accomplishments went unrecognized. Answering this question wrong could show that you are only in it for the money, which frames you as a less desirable candidate. The trick to answering this question is by exhibiting an understanding of why they ask this question and displaying your big-picture thinking.

"I'd say they're not mutually exclusive. In any leadership setting, taking a unified approach of ensuring you're delivering prompt, often, and specific feedback creates greater engagement and a more rewarding experience for the team. It also offers each member of the team a firm footing in knowing where they stand in their performance, keeping them in tune and out of the dark by not having to wait until review time to get a performance evaluation. But without rewarding their efforts through pay increases...well, words are nice when it comes to praise but actions speak louder than words."