Stack ranking is not a rating system. In a normal rating system, fi you have a team of all-star engineers you can give everyone 4/5 or 5/5. In a stack ranking system, you have (for example) two slots for 5/5, two slots for 1/5, etc. This means that even if you have the ten best engineers in the company on your team, two of them are going to get the lowest possible rating (and thus be unable to leave the team). They won't get promotions, they won't get bonuses, and they won't be appreciated.
The problem with stack ranking isn't that employees can be ranked higher or lower than one another (as in any normal rating system), it's that you absolutely have to give someone a failing mark, even if no one actually failed.
This means that if you get transferred to a team where everyone is highly skilled, then you run a real chance of being the person who gets ranked terrible and can never get a raise or promotion unless your other teammates leave – or unless you sabotage their progress or refuse to help them in an effort to try to lower their performance.
The problem with stack ranking isn't that employees can be ranked higher or lower than one another (as in any normal rating system), it's that you absolutely have to give someone a failing mark, even if no one actually failed.
This means that if you get transferred to a team where everyone is highly skilled, then you run a real chance of being the person who gets ranked terrible and can never get a raise or promotion unless your other teammates leave – or unless you sabotage their progress or refuse to help them in an effort to try to lower their performance.