I recently came across a couple of articles on how promotion and experience are managed in two different (maybe not so much) software development companies.
The first of them is Why I ran a flat company by Jason Fried. I like his position on keeping the organization as flat as possible and the idea of self-managing teams. But what I like most is what he points out as horizontal ambition. "We always try to hire people who yearn to be master craftspeople, that is, designers who want to be great designers, not managers of designers; developers who want to master the art of programming, not management.", I find this quote to express the concept quite clear.
The second article is Why I never let employees negotiate a raise by Joel Spolsky. He explains the compensation policy that they follow at his company and the rationale behind it. He defines a salary scale based on experience, scope of responsibility and skill set. So for each employee, three factors are measured and his/her final level defines the salary.
There is this quote that made me nod my head: "If you worked as a receptionist for six years, for example, you aren't credited with six years of experience; I give you credit for one year." It somehow leverages what I think about experience.