I’d imagine the scale to be: 1. Not Meeting Expectations 2. Meeting Expectations 3. Exceeding expectations
A lot of north american modern management theory seems to think that praising your employees is the best way to get them to perform. By telling someone who's good but not great a "You got exceed expectations!!" they'll feel like they are valued.
It's actually the opposite. The ratings themselves are associated with multipliers for your annual bonus and stock grants. IIRC, the full spectrum of ratings and multipliers was:
Meets None (0.0) -> Meets Some (0.5) -> Meets Most (0.85) -> Meets (1.0) -> Exceeds (1.25) -> Greatly Exceeds (2.0) -> and Redefines (3.0)
Ignoring the company multiplier, which was always a value slightly greater than 1.0 when I was there (that may not be true now), for a Senior Engineer (L5) with a $175k salary, 15% bonus target, and annual stock grant of $110k vesting over 4 years , the value of the rating to them at each exceeds level would be:
Exceeds: ~$12k / year
Greatly Exceeds: ~$53k / year
Redefines: ~$107k / year
Of course we are talking about companies that are paying too much in the first place, so maybe they’ll be forgiven for trying to bring the slope down a bit.
FWIW, when I was a manager at a FAANG, the numbers were closer to:
As for my own anecdata, for the roughly 100 person cohort where I was part of performance management, there would be 1-3 people each cycle that were in the "cull" bracket. That said, people with a couple consecutive cycles of not meeting expectations were likely to be put on a PIP. I managed 4 people in that group, and all were able to successfully exit the PIP.All that said, every company and even org within a company have their own goals, targets, processes, and flows, and my experience was pre-COVID, so I'm also sure that any needle movement has been in the direction of harsher evaluations.