> There's also the matter that a raise doesn't need a promotion.

This is a critical point. I've been a manager at companies where the primary, and sometimes only way, to get someone a raise is to promote them because of strict salary bands defined by level. This creates a perverse incentive to promote too early.

Salary bands are usually in place to -- ostensibly -- make sure salaries are fair. Fair salaries are a good thing. That being said, there HAS to be a mechanism to reward top performers with additional cash that doesn't require promotion otherwise it can feel like "teaching to the test."