Does it lead to employees/groups competing with each other to keep their job? I've experienced that at one of my gigs and it just kills my morale. I have a habit of helping co-workers. Then, I notice that I don't always get any acknowledgement in front of mgmt. At the end of the year, the people doing perf reviews don't seem to always know what role I had in some of the successes. At a previous employer where this stack ranking stuff was not prevalent, my coworkers were very generous with their sharing of credit (as was I). As time goes on, I feel I am being a naive person and have no one to blame but myself.

I think this is a key comment. It's not so much that the concept of a stack ranking system is bad in a vacuum. But nothing happens in a vacuum, and individuals will nececcesarily adapt their behaviour according to that which will keep them safe. In a nutshell, the effect of a stack ranking system is to discourage collaboration and hurt camaraderie.