Maybe. These policies can be a double-edged sword. It really depends upon how they are implemented. Most of the ranking systems - and it sounds like Facebook's - rely on the immediate manager to do the ranking and the manager has a lot of leverage. It can become arbitrary. It can often come down to how much your manager likes you (outside of your productivity) or managers protecting turf. Enron had a system like this for dishing out bonuses and it boiled down to nonstop political battles to get better ratings.
I agree with you for the most part but really any business innovation, no matter how smart it is, will be screwed up if you have bad managers. Managers implement business strategy just like construction workers implement home architectural designs. If you have a crappy contractor it doesn't matter how good the blue prints are it's going to screw up your house. Same with bad managers.
So you can't really blame a policy when it gets screwed up by bad management.
Well yes but I think it has more to do with the incentives that are placed before people. As an organization gets larger it gets harder to tell who really contributes what. It also gets harder to socially police people who are attempting to game the system. If some people are successful gaming the system others are incentivized to do so as well. It can be easy to label a sub-optimal outcome as bad management but those managers usually aren't dumb. They usually have perfectly rational reasons for the things they do - it's just not what the policy designers had in mind.
Let me put this another way. Can you think of a system of management that doesn't rely on the judgment of managers? No matter how you slice it corporate America works like this...
+ Executive Staff gives an assignment to a certain manager.
+ Manager divides that assignment up and gives it to his team members
+ Team members complete the assignment
+ Manager submits the completed assignment back to the Executive Staff
Given that scenario there's no way anyone other than the manager can know who accomplished what meaning no matter what system you implement it's always going to come down to the judgment of managers.
(which is why hiring good managers that don't try to game the system is so very important)
