This kind of stack ranking was used at large investment bank (starts with M) about 10 years ago while I was working there as a C++ developer.
It resulted in a strategy where some teams have hired puffer people with the only purpose to have poor performance ratings assigned to them and let them go when the demand for such inevitably rose for such from HR. This shielded the core team allowing them to focus solely on actual business requirements.
There were people in the office taking decent salary, doing barely anything with kind of no expectations of their performance whatsoever. Some were doing their masters, some hit the gym very hard, some were just chilling out.
This was my first lesson on how focus on tactical goals and metrics can fundamentally screw up the long term vision.