an alternative would be to promote the best available person when a space opens up. the structure in a company should be relatively stable, as long as the teams and the number of employees are stable. say for 1000 employees you need 100 managers and 10 directors, then if one director leaves you promote the best suitable candidate from among the 100 managers. if none are suitable maybe hire an external, or find a way to train a manager to become suitable.

achievements can be rewarded with a bonus or a higher salary but i think the latter is tricky if equal work should be rewarded with equal salary. i believe that's why there are more promotions than needed. they are used as a tool to reward people while making it look like they doing different work from those not promoted.