He lost me at the bit about it being impossible not to get promoted just by doing good work. Doesn't work that that in any organization, because to be a manager you have to want to be a manager, and you have to want it more than you want to be "just" a programmer, and you have to think being a manager is better than being a programmer.
Getting a promotion is a full-time job in itself. No time left for coding...
There's ways to be promoted without being a manager. If that isn't the case in your organization (even if you _do_ want to be a manager), leave.
Ideally, there should be two ladders: technical and management. Every management rank should have an equivalent technical rank, with salary to match (fellow being equivalent to a VP, CTO being equivalent to CEO). That's the case at Microsoft, Google, Facebook, Yahoo and many other technology companies (as opposed to enterprises that merely _use_ technology or sales/marketing companies masquerading as technology companies). Technical talent should be appreciated; at the mean time, being a manager is quite different from being an IC and requires a different skill-set -- one shouldn't become a manager only if they want a raise.
There're more than a few people where I work whose full time job seems to be inserting themselves into existing projects as middlemen for the purpose of taking credit. They're transparent too when it comes to taking blame... I don't want to be a manager (been there, done that) but if I did, I wouldn't have time to do actual work.
Getting a promotion is a full-time job in itself. No time left for coding...