As a manager, when we do both our employee reviews as well as rankings, we always take into account what an employee is making. Ideally, an employee is performing slightly above their pay grade at all times, so their is a consistent track record of pay increases, punctuated every so often by significant changes in job responsibilities.
On a technical track, the typical valley growth pattern is from a low level helper, to a developer/technician, to an engineer/sysadmin, to an architect/Sr.Sysadmin.
But, from time to time, something gets out of whack, and either an employee was poorly interviewed, lied about their previous salary, or was grossly overpaid, and they come into a job with far higher expectations than they are going to be capable of delivering on.
Let's say that a solid Jr. Sysadmin, who's comfortable working around DNS zone files, configuring startup scripts, placing IP addresses on interfaces, and writing rudimentary scripts to automate all of this, should be making around $80K/year in the valley right now.
Now, let's say they got hired into a Sr. Sysadmin role, at $120K/year and, in their first couple months, were expected to architect/engineer/deploy a global loadbalancing DNS architecture, complete with performance and redundancy capability, documentation, etc...
This isn't unreasonable to expect of a $120K/year performer, so, when the individual failed to accomplish this, they are placed on a performance improvement plan, seen as an underperformer, and are taking up a valuable head count where someone else could have been performing those functions. They are mostly likely the first people to be laid off, and will be very unlikely to see a repeat of that salary, and will need to adjust to that fact. In a worst case scenario, it takes them 9-12 months to adjust to the fact that their next job will include a $40k/year pay decrease.
On the flip side, if they had come in as an $80K/year Sysadmin, and performed well, they would have been seen as an asset to the team, and would have continued to have enjoyed both career as well as salary growth. Ideally they manage to dodge layoffs, and then, 3-4 years later, they are making $120K/year based on merit.