Microsoft does have an up-or-out policy, but they take pains to try to avoid the problem you point out. Management is not considered "up" from dev, but a parall

Microsoft does have an up-or-out policy, but they take pains to try to avoid the problem you point out. Management is not considered "up" from dev, but a parallel track (whose bottom rung is a little higher than the bottom rung of dev). The top rung of the dev ladder is "Distinguished Engineer" and these people are spoken of in much more hushed and awed tones than any VP. Also the up-or-out policy has exceptions: there are "stable" levels where you are allowed to stay for the rest of your career. IIRC the lowest stable level is Senior Dev (level 63) so if you are hired at level 59, the expectation is that you have the potential to make it to 63; if you earn promotions too slowly or not at all, you'll eventually be let go. This is true even if you do a perfectly adequate job at levels 59-62. It's not a model that would work for every company, obviously...