Compensation is decided by a hierarchy of managers, with each manager giving his subordinates a budget to compensate his subordinate managers, trickling down layer-by-layer to the peons.

If your manager's manager's manager is awesome at self-promotion, you'll make more money.

The End

unfortunately, self-promotion matters a lot, sometimes. Shitty or competitive places will require it.

^ This guy reads the Dictator's Handbook.