Thanks for articulating this distinction so clearly; it's a simple enough idea, but it seems to elude so many.
Every large corporation has a concept of levels. It makes sense to use levels as a progression (they are numeric after all) rather than a new job each time. That’s what job titles/roles are for.
I’m not convinced by this summary, and it seems anecdotal rather than realistic.
Maybe it was just way worse in my org (Chrome).
This kind of confirms my point -- the committee isn't looking for "created a disaster area a month before promo packets were due". They want a consistent track record of success at the next level.
I've worked a couple places where getting a "meets expectations" on your annual review was expected
Their review processes were calibrated such that you should [almost] never get a 5 ("always exceeds")
A handful of 4s ("sometimes exceeds") was good - but not a requirement ('too many' 4s indicated you were in the wrong role, so titles/pay/etc would be adjusted)
More than one 2 ("sometimes doesn't meet") was reason for extra mentoring, one-on-ones, etc
There were no 1s ("fails to meet") - if you would otherwise have earned a 1 in any category, you'd've been let go already
Basically, that whole eng ladder thing is really important. I looked at that a lot for my own promotions and for evaluating candidates for promotions. Just dealing with churn isn't really on there, so it's probably not something you should focus too much on. I'd say that's true at any job; customers aren't going to purchase your SaaS because you upgraded from Postgres 12 to 13. They give zero fucks about things like that. You do upgrades like that because they're just something you have to do to make actual progress on your project. Maybe unfortunate, but also unavoidable. Finding a balance is the key, as with anything in engineering.
The biggest problem I found with promotions is that people wanted one because they thought they were doing their current job well. That isn't promotion, that's calibration, and doing well in calibration certainly opens up good raise / bonus options. Promotion is something different -- it's interviewing for a brand new job, by proving you're already doing that job. Whether or not that's fair is debatable, but the model does make a lot of sense to me.
Things could have changed; I haven't worked at Google for 4 years. But this was a common complaint back then, and it just wasn't my experience in actually evaluating candidates for promotion.