The main argument for this point of view is that two different people might do work that is of very different quality, even if they hold the same position. If that is the case, then it is absolutely appropriate to pay them differently both from an economic and from an ethical point of view.
The wage that a firm pays its workers is (theoretically) supposed to be equal to the value that employee adds to the firm. It is entirely possible that two workers could hold the same title even though one of them is a much better worker and therefore adds more value to the firm. In such a case, it is economically right that the better worker should be paid more.
It is also ethically appropriate to do this. In a capitalist society, we believe that people who are better workers simply should be paid more. We believe, for example, that it is right for LeBron James to be paid more than Bernard James, who also plays in the NBA but is not a star. We do not believe that people should be paid the same simply because they hold the same title.