That's not even stack ranking - managers being assigned a fixed pool of $ to give out for raises and bonuses across their reports (or their branch of the org tree if director or above) is pretty standard at any big company.

It's pretty reasonable if you "ship your org chart" and can easily measure each team's contribution. It's much trickier and more prone to unfair allocation when people switch teams a lot or contribute outside their team, i.e. if one of my engineers went above and beyond and boosted some other team's profits by a bunch, I'm probably not going to get extra money to allocate to my people as a result since the higher level execs don't usually follow credit assignment at that level.

All those managers seem to think it's a good enough motivator to keep it around.