Dave Winer: “Why, as a creative person, did I have to become a corporate executive? That was a mistake. Good software, like anything creative, is made by people who focus on product, not business. Managing a company, raising money, dealing with crises of all kinds, took me away from the thing I do best, and love, which is create.”
This is a common mistake made at a lot of software companies. You take a great software developer and reward him, or her, by making them a manager. Sure there are still problems to solve but one of your best resources will now spend time solving problems not related to technology. They’ll have to deal with people problems and a lot of the time they’re no equipped to do that.
If a techie is completely happy building product, let them build product, if they have a desire to become a manager give them a shot, but don’t be too surprised if they come back at some point and ask to go back to coding. It happens.