[kaizendad]

We have a very similar system here at http://www.synacor.com, and it works really well. The "Promotions don't unlock new responsibilities" thing actually has a big upside: you don't come in the day after your promotion and have the chance to fail at your new job, you were succeeding at it already.

The downside is that it really relies on EMs to work hard to make sure that ICs have clear, measurable plans to advance. At Synacor, there's a standard format for how these plans work, and all plans get review from senior managers, so it works fairly well, but a vague plan or one filled with details that are easily overcome by market changes will usually fail and the individual will not be promoted. It can also be challenging because, at higher levels, the plans often include improvement in multiple areas -- say, improving development skills, but also taking on more mentoring. If the developer learns and applies new skills well, but is having a hard time with mentoring, that will delay the promotion, which can leave a frustrated dev whose promotion is delayed.

It does essentially eliminate the Peter Principle, however -- people who are about to get promoted beyond their abilities will discover that before their promotion, and they'll stay in a happy spot.