i partly suspect that all of the norms originally evolved in reaction
to administrative and technological realities of processing employee
pay raises in resource-strapped HR departments.
The first contracts were contracts for a specific work, commissions. "You make a chair for me and I pay you for the finished chair." There was no concept of raises. You had to finish the work in order to get paid. From there the service contracts started - "I need so many chairs per week, that it's easier for both of us to pay you for a whole week instead of per chair." This deal had benefits for both, if both were honest (wo)men. The very moment demand for chairs becomes stable for both parties, it's beneficial to extend the service contract duration.
So, back to the topic, a raise is merely the re-negotiation of a contract. In theory, our carpenter could have negotiated a new price for every chair - but the commissioner, too. But both are not lawyers - they don't make money negotiating, they make money working. If they negotiate a day about the price for a chair, there is no chair made for a day. The benefits of a stable price outweigh the advantages - reliable income and reliable supply are the top concerns for both parties in any business, after all, reliable supply again means reliable income for the commissioner.
If you compare employment culture in different countries, you will see that your concept is reality in other countries. India f.e. has a high percentage of work as commissions, the demand is much less stable - so you also have a high fluctuation of workers, which is not much different from a high fluctuation of wages. Employing a new human is for sure not less administrative or technical work than changing his salary.
Therefore I believe the premise that technology did shape the culture is not tenable. The culture did shape the technology - the concept of steady re-negotiations is completely detrimental to the concept of steady employment, so there was no real need to develop specialized technology or processes for it.
"We just do it annually." or "It takes so long to get pay raises approved" are variations of "We are not lawyers, we don't make money negotiating". It takes long to get things approved because the people in the chain prefer to do things that they feel is their job (even if approving raises is their job). Remember, that HR and managers are already overhead. The commissioner and the carpenter don't need a HR department or manager to create and sell chairs. Note that technology can't do magic - a human still has to tell the software who gets a raise, starting when and how much, if you talk about performance-based raises. And, you usually keep the overhead as low as possible, so the current HR staff is exactly as many people as you must have for the work you already have. You are much more likely to have a second carpenter than a second accountant.
If you start with
"I did a great job this month, I want more money."
the first conceptional counter-argument would be
"Can we lower your salary when your job performance decreases next month in case your wife divorces you?"
and then the employee has two choices:
If he says yes, he basically switched his service contract back into a contract of commissions. He gets paid by what he delivers.
If he says no, you see that it is just a re-negotiation of the whole contract. The employee is a hypocrite (not meant offensive), who wants the benefits of the steady employment with the benefits of commissioned work - the carpenter, who wants more money if he delivers more chairs, but doesn't want less money if he delivers less chairs.
The annual raise is popular, because human culture is based upon a year in time-keeping. We measure time in years and seasons if we can - quarters of a year are much more used than thirds, although there is no reason why 4 months is worse than 3 months. A year divided in three chunks feels - wrong. If you do annual raises, you could also do raises every 11 months. There is no technological or administrative barrier that prevents it, it is a cultural one. If a culture would glorify the number 11, it might have 11-month raises though.
The next numbers that looks reasonable for a raise seem to be 9 month or 6 months, right? But your SAP HR application doesn't care, it will do 8 months, too. It's culture, not technology that came up with these numbers.
So, the two cultural barriers are the culture of time-keeping and the concept of steady employment. The more I move from annual raises to shorter terms, the more I turn the contract into a non-beneficial situation for me as employer - not getting the benefits of service contracts and not getting the benefits of commissioned work.
It's not a big technological or administrative barrier - it's a puzzle and the pieces just won't fit together nicely with monthly raises.