It would be less obviously bad, but the same issue applies: say the company has three teams of ten people and they are all good: one gets fired/lower salary anyway each round.

And now you have the additional issue that evaluations need to be objective, which is hard, while a manager never wants to lose member of their team, so they're naturally pushed to overrate their people to protect them from ending up at the bottom.

I’m sure their are management consultants who watched the first season of Andor and thoughts “Now that’s what I’m talking about”

All companies with stack ranking do some sort of merge sort to achieve this, typically called “calibration”. You have to rate employees at the team level because as you go up the chain, managers stop knowing how individuals more than one level of management below them perform.

The only viable exception to this I’ve seen is in organizations like sales where there’s some reasonable, objective criteria to evaluate an entire workforce on. Nothing good exists like this for software engineers though.

Common misunderstanding. Good sales is far more than closing big contracts. Good sales is about finding low cost customers, good fits, and prospects that challenge the expertise in the company in the right ways.

If you measure just total contract size and think this is all there is to evaluate sales on, you incentivise bad sales.

I contracted on a bespoke project that was in desperate straits, huge extension with no way of delivering anywhere near the sale price. We had some beers with the buyer's representative when he came to inspect progress, and asked him what they were really wanting. "Oh we didn't originally want such a system, but your sales guys named a price that we just couldn't walk away from!"

Turned out it wasn't really the sales guys fault: the CEO was trying to get acquired and figured that a well-stuffed order book looked better, just so long as the cheque cleared before the chickens landed.

I’m not saying it’s the right way to do sales. Only that some companies can skip calibrating employees in sales organizations by using objective criteria for evaluation.