The 3-tier system is a support structure to balance cost with service requirements. It is based on a similar 3-tier skill set of recognition, knowledge, and finally understanding.
Tier 1 identifies and validates the user, records the problem, and applies a scripted response for problem resolution. The bulk of the problems are resolved with the initial call by tier 1. As an entry level job, pay is also the lowest. Skill level is recognition.
Tier 2 handles the one in ten calls that either are not recognized by tier 1 as routine or that require some specialized knowledge of the OS or applications. It may also do routine maintenance activity and active problem resolution (internally found and corrected versus user reported). Skill level is knowledge and an expanded range of recognition.
Tier 3 handles problems that are beyond the recognition and knowledge of tiers 1 and 2. This involves an in depth understanding of OS, application, and systems typically associated with advanced training and experience. Skill level is understanding, an advanced range of knowledge, and an advanced range of recognition.
The problem you have is not with the 3 tiers, but with compensation. The problem occurs when those at a tier 1 or tier 2 position have expanded their recognition, knowledge, and achieved understanding but have no tier 3 position to advance into. The business issue is that the value at each tier defines the skills and compensation. More skill does not necessarily add more business value. The solution for the employee is to show added value at that level, perhaps through customer retention or new revenue sources.
Adding to the problem is the ever increasing skills of users, reliability of hardware and software, and the outsourcing of IT functions. This reduces the ratio of support to installed base such that expanding IT across new verticals does not involve a linear expansion in support positions. Add offshoring to the mix, thanks to global communications, and the competitive rate for each tier is now based on global rather than local employee compensation costs.