Yes. Sad to say. After much arguing with my boss (the director) and a debate with the VP, I was ultimately told that this was a subjective, relative ranking. Someone was below the others, and whoever that was deserved a lower ranking.

I gave one person the 2, had a conversation about why, and then awarded him the same bonus as the 3s. He was weaker than others, but it was slight and somewhat nitpicky.

I ended up resigning a few months later, and listed this as one of my reasons.