To me this is an issue of scale. A small startup can hand pick talented people and pay them the same. Its pretty easy to manage employees and validate performan

To me this is an issue of scale. A small startup can hand pick talented people and pay them the same. Its pretty easy to manage employees and validate performance as you approach ~100 employees. Now scale that up to 50k employees. The talent pool isnt large enough to have only A players. Secondly in a large org you may not want some of the A players available because they have a crappy attitude. So what do you do? Hire B and C players and hope you can mentor them to a B+ A-. Im still not sure they deserve top tier pay, at least at first. If they demonstrate improvement then compensate them. Personally I think where companies go wrong with comp is that they stop rewarding top performers- especially in the IT/DevOps side. Ive worked at various companies where the sales and or traders that form the business often get large rewards just because they are on the income side of the house. IT and Development can at best increase efficiency and reduce costs but they are always just that, a cost. So short sighted managers eventually hit a wall and say no more comp increases. Eventually that person leaves when they find a better job, and they spend 50-100k recruiting a replacement that they have to pay what the existing employee wanted in the first place.