I don't think that's true. What I think is most important about this is that it tries, at least, to be transparent and fair. In my current company I've been exposed for the first time to how salaries are chosen, and in many cases it's almost totally arbitrary, or worse. It's certainly based far less than I would like (and far less than I expected) on the person's ability to do their job. The biggest beneficiary of a system as proposed by the OP are people who are good at their jobs (not friends of the boss, better negotiators, prettier, etc).