[phillipcarter]

Money is clearly a factor, but I think a lot of it comes down to culture in the working group. Promotions mean status upgrades, and in a lot of these companies, status is actually important.

At least at Microsoft, there's a culture of where your title determines if you're a part of the "in group" or not. Not at least Senior? Forget about anyone outside your immediate working group taking you seriously, let alone deferring to your judgement on things. Not at least Principal? Put your ambitions aside, because you won't be allowed to make decisions that are actually important. There's exceptions to this, like if you're in charge of something nobody else thinks they understand.

As a result, this means that there's a lot of squabbling and weirdness around September. Especially in the Senior -> Principal jump, since that is also influenced a lot by department budget. There's also not any official acknowledgement of a good terminal level. Implicitly, that's the Senior band (and really the 2nd level within the band), because beyond that you're usually expected to do more than just be a wildly productive individual contributor. But everyone who's Senior eventually feels the pressure to somehow level up to Principal, because they have the expertise to make important decisions but their organization often won't allow them to be in the room where those decisions are made. Thus the backstabbing, jealousy, weirdness, and more.

[bombcar]

This is a perpetual problem for any organization with a hierarchy - and taking care to have successful off-ramps for those who want to continue to contribute without being forced into a management track is important.

It’s gotten better but there’s still limitations, and many people solve it by switching organizations- which has more costs than many realize.