There are internal systems, some significantly older than others....they are trying to adapt the real world to their internal representation of the perceived world.
The value you truly provide vs. the value they believe you provide is lost on them....so you must find/show it. Many enterprises assume 3% bumps for all employees yearly, associate this to overhead, and report back to shareholders. This trickles down to managers as "room to work with their employees." If someone gets rewarded, this means someone else is getting punished. Need an exception....take it to the top.
Now you have a system of incentives and disincentive...want to get more for your people, take from others or take on more work.
You now have potential for lost information at your inability to display value (doing work quietly and not advocating for yourself), your manager (overloaded/ignorant of effort), the process (outdated or accounting for a percentage of unhappiness), and arguably the stock market....
You can get very analytical with game theory here which I think can be very interesting. If you find that interesting you may find Thalers "Guessing Game" and Keynes "Beauty Contest" interesting as well.
My opinion has been the more layers, the more places to lose information. These companies are accounting for external factors/information on the hiring front, once you are inside, it is internal factors/information.