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Interesting, this would be an issue of course "This generally makes the person less likely to work as hard as before or contemplate other opportunities." if it was endemic can you say more about that? Do you see people at the top of the $X range who are 'coasting' (some folks called it 'retired in grade') or a lower performer pulling down the whole group who don't want to work any harder than the guy making the same salary and 'getting away with it' ?

Yeah, in my experience with it, I think the biggest problem was if you were "maxed" out. Taking my example again, say you were Software Consultant Level 3, but there was no Level 4. At that point, the person either just accepts it (and maybe loses some drive) or they look for options for a new ladder such as changing title (manager, supervisor, etc.) or a whole new company altogether.

I think the same thing happens in all work places, but if salaries and titles are more open ended, you never really know what you can achieve so you might stick it out longer. In this type of workplace, you explicitly know, and you explicitly know when you have no where left to progress so you make your career choices knowing exactly where you stand.

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