Those yearly reviews will factor somehow into my pay, bonuses, etc, but I only see the final result of it. Was I stack ranked?
That doesn't mean that you or your manager are necessarily doing a great job though, or that other people aren't being hurt by the system.
You can guess which one I prefer.
This same manager also later became notorious for angrily declaring that "<productName> has no technical debt!" in a meeting, despite the product being unable to meet any reasonable SLA for years (bad architecture, bad code quality, >100% annual turnover). Not sure I'd use him as an example of management there, but pockets like this certainly exist.
First of all, it makes individual workers have their eyes on the scoreboard (reviews) rather than the game, because there's no escaping mediocre reviews; if you get smacked, you're stuck on a team forever. (And, sometimes you have good workers who get shitty reviews to prevent flight.) Second, it slows internal mobility to a crawl, because people getting lousy reviews can't move and people getting good reviews don't want to move, lest they risk getting mediocre scores and showing "negative trend" (making promotion nearly impossible). So, collaboration stops (due to the impossibility of lateral or diagnoal movement) and departmental position becomes permanent and tribal, and you get the "warring departments" dynamic. Even if you don't agree that departmental rivalry is a bad thing, what it tends to mean is that, due to the unpredictable sabotage events, whole sectors of the company become unreliable and upper management finds itself duplicating effort and running "bake-offs", but talented people avoid bake-off projects like the plague, so you get a "Dead Sea Effect".
Usually, when people talk about stack-ranking, they're also talking about Enron-style performance reviews (that is, performance reviews that are part of the transfer packet). You can theoretically have one and not the other, but they tend to go together.
Make no mistake, Amazon is not a great place to work. Ok place to work maybe. Good if you have managed to fit in. But even after that, they underpay. Friends with literally a decade of time out in are making relatively low considering their wide areas of responsibility.
I think this myth really continues both because people tend to only pay attention to base salary and don't consider cost of living/state taxes, and due to the fact that Amazon does underpay warehouse workers, as evidenced by the current strike in Germany.
I can't speak for higher level positions though. But Amazon tends to strongly favor giving out more stock over more cash, which goes back to the same issue of not comparing total compensation.
Stock always comes with a vesting schedule and a forfeit clause, which means that if you accept more stock as a substitute for a better salary, you are implicitly agreeing to let them retroactively underpay you for the last couple years of your tenure, whenever you move on to the next thing.
Don't kid yourself that you're going to stay at the same company long enough that it won't matter, either; the raise you get by switching jobs always dwarfs the raise you get by sticking around and jumping through the perf hoops and trying to get a promotion. So the only way to make the stock pay out is to screw yourself on salary over the long term.
What's more, keeping a large portion of your net worth in your employer's stock is a terrible diversification strategy, so you will probably end up flipping it and investing in something else as soon as it vests. So.... what was gained by accepting compensation in stock, again? I'd rather they just pay me cash money and let me invest it however I want.
[1]: http://www.glassdoor.com/Salary/Amazon-com-Salaries-E6036.ht...