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Wow, I work in a big, non-software-focused, multinational company, in a mechanical engineer role. Your post describes our exact review process.

What more, it seems managers always set the expectation high, or vague, that way everyone always get 3/5 (meets expectations). By now I'm almost 100% convinced that there is an official HR guideline that they are not allowed to give higher than 3/5 overall rating.

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In my experience at huge companies, getting a 4 or a 5 is largely a paper-trail formality that managers bestow on people they are grooming for promotion. It's a political gift and a retention mechanism. Everyone else always gets a 3, whether they've been kicking ass or competently coasting.

Systems like these create strong disincentives to focus on job performance above and beyond a certain baseline, and strong incentives to focus on self-promotion, politics, and lobbying for sexy projects and allocations. Especially true when there is a forced curve or stack ranking involved. (Spoiler alert: there is almost always a curve, whether formally mandated by process, or informally expected by leadership.)

"We only hire the best."

"You can't all get 5's!"

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