I agree that it's stupid to promote your best techs to management (unless that's what the really want to do). Part of the problem is with the "industry standard" job model. If your good at this, you can have one of these job titles. Then within these job titles, you can make between this much and this much. If you're truly worth your salt, you will probably hit that ceiling pretty quickly. What's left for most people if they want to make more money, is to either leave your present company (which may or may not be easy depending on your circumstances) or go into the management track.
I once worked for a company that discovered their engineering team was becoming less and less productive because they kept promoting their best into management. They finally changed policy and started getting rid of salary caps on most of their positions. A few of the recent promotees opted to move back into engineering (at salaries way above the previous salary cap), and something happened that NOBODY could have seem coming (sarcasm intended). You had highly paid, but highly skilled and motivated people churning out their best work at breakneck speeds.
Keep Up with TechRepublic