Apart from all of the questions that arise from applying a single measure of "performance" to individual contributors (and not managers) and assuming that this

Apart from all of the questions that arise from applying a single measure of "performance" to individual contributors (and not managers) and assuming that this index is distributed in a bell curve in small teams, stack ranking has an even bigger failing. It assumes that the success of a company is due to management carefully shaping the situation. I'm going to guess that really successful companies are successful because employees are empowered to do what they love, and management largely sees its role as playing enabling and protecting functions rather than a shaping function. Mid- and upper-management are liable to imagine that they have a big hand a company's doing well, but my bet is that they have a much larger hand in a company's doing poorly. The best managers are often ones that step back.