I wonder if the ranking had anything to do with the lack of motivation. Joel system had managers sitting down with people and talking about their work and what level they deserved. So the employees basically knew what they were doing and what they needed to do to improve.

Whereas in this case the ranking was just related to the respect of your peers. Also, once you become extremely competent in something your skill becomes mostly unconscious. So basically these top employees were told that for reasons they did not fully understand, they deserved to be pay more than everyone else. So while the salary was simple, it probably came across as extremely subjective to those people.