Sounds horrible. Many moons ago I had a job where I couldn't get a pay raise because due to some idiotic internal rules they would need to promote me to a "manager" position in order to pay more and there were no open "manager" positions.
i know that feeling. hense i didnt mention a 4 point promotion but a 20 point promotion
so that it adds the wiggle room where normal 4 level promotion involves title upgrade which can only happen if position/title is open
..
as for the 'just pay for performance' this is hard in of itself to measure
someone on a salary that works efficiently but gets the job done in 40 hours. vs a inefficient worker that takes more time to finish the work. working longer hours to get the job done.
in many cases even if the same job tasks are complete.. the inefficient worker will complain that they put more effort in by working more hours and demand more pay for their time,, quoting the other worker leaves early and clocks off at 5pm while others are still working till 6pm
other examples are the efficient person gets mondays workload done by 4pm. and starts on tuesdays workload and leaves at 6pm along with the rest. then tuesday morning continues. and gets tuesdays workload done by 2pm. and then just sits bad and takes a nap. obviously hours ahead, but seen as lazy, bad time management. even when reality is they are ahead of the inefficient workers
thus when it comes to pay review.. the inefficient staff snitches on their co worker and so the efficient worker is seen as the bad employee that spends afternoons taking naps
..
solution to this is a basic pay (20 level structure) and ontop a performance pay where workload is monitised
as a bonus