The problem all these companies face is how to determine raises fairly. To do that, you can allow each manager to determine his employees' raises independently

The problem all these companies face is how to determine raises fairly. To do that, you can allow each manager to determine his employees' raises independently, which typically means the manager will exaggerate their performance, or you can devise some sort of system based on numerical reviews. But how do you create such a system? Every one I've ever heard of has been unfair and political in some way - but still probably less unfair and political than each manager picking numbers for their own team. I'm trying to say this is a hard problem, and picking on the downsides of "stack ranking" is easy if you don't consider alternatives.