[any1]

I worked for a company that went through 2 cycles like this and I can report that it had zero effect on us engineers.

My impression was that people were constantly being promoted into management and at some point we just had too many managers and that's why it was done. Of course, when you know this, the question becomes: why allow things to get to this point in the first place?

[fc417fc802]

Presumably because people expect to be promoted periodically, so they pile up on the high end until the symptom gets corrected all at once. A realistic (but quite controversial) solution might be to emulate other companies that have done away with most of the promotion hierarchy. Different roles but more or less standardized pay across all employees and an understanding that promotions aren't a thing. Rather than climbing a ladder you're there to get shit done.

[gpvos]

Just have the possibility for pay increase without taking on management responsibilities.

[bboreham]

Why? Bad management. Perhaps even bad leadership.