Question to the managers : what would be the reason to promote an employee but pay them less than the targeted salary band?

I'm genuinely trying to understand this methodology. I feel like I've shot myself in the foot remaining with the first employer after graduating college for this long. I was offered a role with this employer a month after I graduated and was offered less than the target salary but was grateful for the experience..... It's been 4 years and I've gained a lot of experience as a result and was even recently promoted which came with a salary bump from my last role but I've learned that even with that salary bump, I'm making less than the target salary range for my current role still.... To top it all off, my annual review which my manager stated that I meet all expectations, yet I get less than 3%? Hoping for some insight from those that happen to work as managers.