“Position in band” is often a factor in performance reviews. Consider a common process - say you’re “senior level” and in your review you’ll be rated on six categories, then given a raise based on where you are overall relative to “meets expectations.”

If you’re senior but at the bottom of the senior band, and you’re mostly “at expectations” for your level but maybe “slightly below” in 1-2 categories, you’ll probably still net out at “meets” with a normal raise. If you’re senior but the highest paid senior - that’s probably going to net out at “below” overall, or zero-to-small raise.