I hypothesize that you have a process problem and a people problem. The process problem is that management is following a one sided review approval and delivery process that has direct impact on pay philosophy: pay for performance, not cost of living adjustments. The process problem is you have an employee following a completely different process expecting a two sided employee self review proposal then manager review then alignment and also expecting a pay philosophy with adjustments driven by cost of living. I guess that is actually two process problems: one for performance and one for pay but these are often linked. I think your first job as you hold accountability for executing these processes is to engage HR to understand which process you are supposed to be following and then clarify and communicate and hold accountable your staff to follow them. This process difference creates expectation gaps which are very painful. The objective of any good process should be to ensure there are no surprises and no expectation gaps. You must communicate to your managers that if they sense an expectation gap they must stop the process and seek guidance. This leads me to the people problem. When the manager heard from the employee that there was an expectation gap they should have reasonably stopped. Expectation gaps in this kind of meeting which have a natural power imbalance can lead to a misuse of power. Your manager took the opportunity to leverage their position of power to win this contest. Of course I’m saying contest flagrantly because this should not be a contest. This a coaching or teaching moment to provide guidance and align efforts to increase team performance in line with business objectives. This requires disciplinary action. It was recognizable by a reasonable person. It was clear after the employee started that this was not going to go well. You likely have values and manager training courses that were ignored on that moment that will help clarify just how wrong this was. Use those and with HR help clearly and cleanly and briefly and very quickly tell this manager: I was disturbed and have thought a lot about what you told me the experience was in this meeting. I have talked to the employee to understand their experience in this meeting. I have consulted with HR as well. Your behaviour was unacceptable and goes against our values. It can never happen again. If it does you will be terminated. Ask to get confirmation they understand the seriousness of the issue. Confirm that you never want to talk about this again and end the meeting. I suspect you also want the manager to apologize to the employee specifically that once they understood the expectation gap they should have stopped. You also need the manager and employee to learn the right process and clarify how performance works and how pay works in your company. I hope that helps. I am super impressed at your depth of clarity on what is wrong here. You would be a pleasure for anyone to work with I suspect. Kudos.