This type of system seems to be a way of finding excuses to keep wages down to a certain extent. The rankings can be used to limit raises. As there will be a quota of staff in each quota it has nothing to do with ability. It could also be argued that it is open to abuse - ie the top ranked staff just happen to get on best with their bosses. I am glad I do not work in this sort of environment - as I have never been a 5 or a 1 I think I would get lost in the middle ground. It must be horrible to be be labeled this way - the job titles and grades can be bad enough at most organisations in setting the hierarchy let alone having this sort of grading thrown into the mix.