No mention of previous work = reject?
One of the key questions for any piece of scientific work is this: how does this work contribute to human knowledge?
If a work fails to even discuss its relationship to prior work, then it is entirely appropriate to reject it. Likewise, if the authors mention algorithms that are directly comparable but fail to actually make a comparison with any of those algorithms. When I am given a paper that is entirely isolated in this way, I will not even bother to check the details of the algorithm's soundness, since the work already has a major disqualifying failure.
For many algorithms, however, the differences are qualitative and not quantitative, and thus a direct comparison would be unenlightening or pointless.  For example, if algorithm X tolerates a class of failures that prior algorithms do not, then it is enough to show that algorithm X tolerates those failures.  One does not necessarily need to re-prove or empirically demonstrate that the others do not.
Likewise, the number of potentially related prior works is often vast and complicated. No algorithm paper will ever compare to all of the other related algorithms, because &quot;related&quot; is a broad and fuzzy concept. You and the authors will generally not make the same judgements about which algorithms might be interesting to discuss in related work or to directly compare against.  Thus, the standard to which you should hold related work is not &quot;Do I want to see comparison against Algorithm Y?&quot; (that's Evil Reviewer #2 behavior) but rather &quot;Does the comparison provided sufficiently support the author's assertions?&quot;
Bottom line: be generous in your judgement of comparison to prior work, but papers with no meaningful comparison should be rejected.