Where I see this mostly is in non-tech companies that don't have IC tracks. Often these companies have pay-bands that necessitate this. If you have a SWE that

Where I see this mostly is in non-tech companies that don't have IC tracks. Often these companies have pay-bands that necessitate this. If you have a SWE that you're worried about losing you can't just keep them in the same job title and give them a big raise. You have to give them a manager, senior manager, or director title in order to get them into the pay-band you need them to be in. So it really isn't about making the employee feel good about the title they have. It's about getting them into the right pay band.