I was involved in this once from a low ranking managerial position. When they got where they were discussing my peers, etc I ask to be excused.
My present employer apparently also is implementing rankings and ratings. After the last layoff they apparently made a big deal about A, B and C employees (I was on vacation at the time). I’m not sure what the real solution is, but certainly one bad ranking shouldn’t be able to dislodge your career like it almost did to the person described in this post.
Everyone knows who the low performing employees are, institutionlizing the process may be good for keeping legal expenses low, but probably does more harm than good to company moral.