I think the problem is much more general. It seems like the underlying problem is that technology companies have idea to divide people into two categories: man

I think the problem is much more general. It seems like the underlying problem is that technology companies have idea to divide people into two categories: manager and individual contributors (developers). And then rank them into levels. This might work for non-tech companies, but I think that is wrong approach for tech companies. One of the key problems is that big money is in "management career path", thus very smart young people which are unable or not willing to go into management will leave to start their own companies. For example, if you look around you, you see that your fellow colleges and managers are quite different. Some of them are "mentors" (people who like to mentor), "intrapreneur" (people with weird ideas), "fire-fighters" (people who are good in fire mode), "coordinators", etc. I'm not sure what is the solution. Maybe something like mash up structure where person who is deciding on ones bonus and raise is not his/her manager.