As I implied in the comment you're replying to,
yours is a terrible idea ;)
I advocate transparency and simplicity not because it's a perfect system for getting the exact amount of compensation appropriate (no such system exists) - I advocate its use over the alternative which is based on empowering the employer only and unfairly rewards people for being good at negotiation. I allege the whole thing is a philosophical artifact created by the idea that unregulated free markets can solve every problem: "just let the workers fight over it, the best will get the most!"
Interestingly, a wide variation is skill is not something that is addressed at all by this don't-ask-don't-tell lottery scheme. If anything, it is based on the idea that two given people with the same skill set end up getting disparately compensated. In what world can that look right to anyone? People wonder why women and minorities get paid less than white males: that is the reason why right there.
The truth is, I'd rather rest well knowing I get the same compensation as a coworker than spending energy wondering whether I'm getting ripped off or not. And here's the shocker: I don't want my coworker to get ripped off either! Now if a team member happens to be awful, and he keeps on failing upwards through the ranks of the company, I prefer to have some visible indicators for that as well. You say you prefer to make twice the salary as that guy, but under the system you're advocating you couldn't even know whether that is indeed the case.
> I (and likely you) don't want to be lumped in with whatever the "average" worker of my years experience and skillset is making.
That really depends on the company and the kind of colleagues you are dealing with. I'd prefer to work in a team where I'm not above everyone else. I like being surrounded by people who inspire me and whom I can maybe inspire in turn. Being lumped together with comparatively untalented coworkers is not just a compensation issue, it also creates an environment where one part of the team has to constantly shoulder additional workload and carry the underperformers (who by the way are almost always better at politics).
Getting back to my levels proposal: it already works elsewhere, it's just not used that much in our industry for cultural (and probably philosophical) reasons. Yes, skills vary, but the negotiation-based system addresses this in an even worse way than compensation levels do. My experience with running a level-based system has been overwhelmingly positive. It was pleasant from an administrative point of view, and it created zero contention among employees.