You've got it the wrong way around: usually companies have decided for whatever classist reasons that they have some kind of maximum raise per year. This ensure

You've got it the wrong way around: usually companies have decided for whatever classist reasons that they have some kind of maximum raise per year. This ensures that after a few years people who are actually getting better at their jobs are falling quickly far below market rate for their level of experience. So, those that feel like they can move on, since it is the only possibility for increasing their pay meaningfully. This is not specific to engineering positions, it is a pretty common fixed policy in many industries.