”The pay scale stops after about 12 years anyway, so where is the incentive for a UPS3 teacher to improve their practice?”
Agreed, but that’s another problem rather than the answer to the first one. And in fact in any industry a person will reach the top whack for that job and will either stagnate or have to seek promotion in order to increase their pay.
Promotion is fine, and it’s right that those taking more responsibility are paid more, obviously.
But IME the biggest two demotivating factors with remuneration are a) real or perceived unfairness and b) a perception that performance/effort/achievement is not recognised.
I would expect giving pay rises based only on ‘time served’ to have a negative impact on motivation for those two reasons.