There are several different degrees of performance ranging from outstanding to marginal. Maturity curves are valuable because they enable high level high productivity employees the opportunity to make more money without have to seek a higher position. Merit Raises are increases in pay based on an evaluation of an employees performance.
Immediate supervisors are the ones responsible for the evaluation and subsequent raise.
The main problem of this system is that it is subject to bias, and therefore many merit deserving employees do not receive fair compensation.