If I was at a company that promoted people on anything else but their merit and skills, I'd leave immediately because of misalignment of values. If hard work and skills are not valued, the company itself is doomed.
It's a forest for the trees sort of thing. In my limited experience with former googlers and microsoft people, they came from environments that were so far removed from real customers and product feedback that their only measure of success was if they could impress their peers by using the very latest features of C++ move semantics, as opposed to architecting/building a scalable system that actually solved a customer problem.
Literally I know of a startup that basically failed because the ex-microsoft guy spent most of this time building C++ $WHATEVER to get better performance on our i/o bound app and the ex-googler spent most of his time reorganizing the repo. They never got around to delivering software that they could iterate on.
[edit]
Both of those places are big companies, if you feel the need to respond with how you work at company X and your team is great at getting things done, you really don't need to bother. We get it, companies with tends of thousands of employees probably have many different subcultures.
For one your prospects are tied to how well your project does. Sounds reasonable right? But what this results in is many teams battling to "win" with politics often playing a large role in who is the victor, rewrites of existing code essentially to prove your technical prowess and make your promotion case and little to no valuation of team value rather than individual value, namely that teams are (or can be) greater than their sum of parts.
The last point is a key one and an area where the likes of Damore go wrong. The best team isn't one simply that's the sum of the people who individually had the highest "merit".
Put another way the cynical view is your shit never breaks no one notices but if it breaks in a big way and you fix it, well that's impact. Likewise adding a feature isn't nearly as much impact as rewriting the whole thing from scratch.
However, to be fair, I haven't been at many companies where "cleaned up code base with large scale refactor and improved documentation" gets you noticed. It's just not as sexy as a customer facing launch.
I'm not sure what this has to do with Damore. Can you clarify?
The stuff I saw:
1. People will not do easy yet impactful tasks. Everyone will try to solve a challenging problem, even if its effect on the bottom line is negligible. Folks who solve simple problems that bring in a lot of money are less likely to be promoted. At times, an easier solution was actively campaigned against by someone whose brilliant pet project would be impacted.
2. Highly valuing individual technical ability often ends up with devaluing team cohesion. In the place I worked, the people were very capable and smart. But the teams were not that effective. If something went wrong, people were less likely to see how existing policies and the organizational structure led to these problems, and instead focused more on which individuals were to blame. Everything - success or failure - was at the individual level.
So I do not think he meant that a company should not value individual technical ability. But if they value it more than effective team management, etc - I would not work there. Been there, done that.