My former employer used "Towers Watson grading" which is sort of a global grading system. Obviously the purpose was not to maximize the compensation of an employee, quite the opposite.
Exactly. All of these "pay banding" methods are used to enforce a culture of no one asking for more pay regardless of the value of their contributions, because "sorry, even though I think you deserve a raise, you're at the top of the pay band for your role/title, there's nothing I can do". If your manager has to convince their manager to fight with their own manager to get you an out-of-band pay increase, it's almost never going to happen.
It seems to me that now title inflation is countering this somewhat. I'm the newest hire in my organization and my title is "Analyst". I'm the only person at this level in the entire group, because I've been here less than a year. Everyone else, who have each been here 3 years or more, is "Manager" or higher (about 2/3rds are "Director" or higher) even if they are really just individual contributors with no direct reports or management duties, because they have to increase people's pay to keep from losing them, but they can't do it without bumping them up a pay band, which is only allowed with a "promotion". But while this is true in my group, there are groups where there are 200+ individual contributer-level people, and maybe 10 managers, and those people are never getting pay raises.
It reminds me of how "VP" is an inflated title in investment banking roles.
> In brokerage firms, investment banks and other financial companies, "vice president" is a seniority rank rather than denoting an actual managerial position within the company. It is a relatively junior position, usually does not denote managerial responsibilities and companies have a large number of vice presidents, perhaps as an inexpensive way for a company to recognize employees, or perhaps because of delayering when an employee can't be moved higher in the organization but still deserves recognition. In most cases, the title merely implies that someone is in a medium-seniority individual contributor role
VP is (apparently) also a title which legally denotes that the holder is an "officer" of the corporation, and can enter into deals on behalf of the corporation. Having a lot of those people around is typically a good thing for financial institutions (e.g. for quicker decision making).
