Good questions. I think that compensation should mirror the value an employee provides to the company. However, in many cases, that is very hard or even impossible to measure.
In large companies with many career levels, the role level indicates the perceived value for the company. Then, the distribution within the level doesn't matter that much, as long as the difference between minimum and maximum pay is relatively small, and there is not much overlap to the neighborhood levels.
Of course, there is no objective criterion what "relatively small" means in this context.
And, as the article already points out, this only covers fairness within the same level. Maybe even more important is if everybody is evaluated in the same way when it comes to career progress.
In large companies with many career levels, the role level indicates the perceived value for the company. Then, the distribution within the level doesn't matter that much, as long as the difference between minimum and maximum pay is relatively small, and there is not much overlap to the neighborhood levels. Of course, there is no objective criterion what "relatively small" means in this context.
And, as the article already points out, this only covers fairness within the same level. Maybe even more important is if everybody is evaluated in the same way when it comes to career progress.