"When I was at GM, you were a failure if your next move was not up—managing more people or taking on bigger, more complex projects. For many, this made for a miserable career path"
As I've said before, I think this is a corrosive aspect of the perf/promo process at many FAANGs. The "level" system encourages/pushes people to "upgrade" in this manner, and I think contributes to a number of problems. For one, organizational incompetence when people who were valuable contributors where they were are elevated up into roles where they no longer can apply those skills as effectively (i.e. technical team lead to management or architect) leaving a vacuum below. A form of the Peter Principle I guess, except the individual may have competence in their new role but not be happy, or make the team itself less successful.
And most importantly, as he touches on: being asked to 'level up' and told that this is your mission can lead to an unpleasurable career. Either when you do get that promo and then find that you don't enjoy the new responsibilities (but become trapped by the position / upgraded compensation etc.) or when you don't get the promo (or don't try) and find that your value in the eyes of yourself and others seems less.
And finally, I think this type of thing can really take hold in places with a highly academic background / focus / origin (like Google, etc.) as it mimics in many ways the grade / peer review achievement structure of academia. And that reward / grading structure may not at all correspond to either the monetary or cultural success of a corporation.
Smaller companies looking to grow/formalize should exercise caution when looking at the rating/performance/promo process @ FAANGs / MS as a model for their own.
(I'm at 20-25ish years in the industry, but really feel junior in so many ways when I read the words of veterans like this.)