Don't have to imagine it. This is how all of my education worked from kindergarten through undergrad. Grades are there as an absolute measure of how well you've accomplished what you and the institution set out to do; your peers' performance is not relevant to that question.
My high school and university both had longstanding policies against disclosing any information about GPA distribution or class rank, explicitly to discourage students from measuring themselves in relation to each other. Facing highly ambitious and academically successful student bodies, administrators (rightly, in my opinion) feared the cutthroat and competitive climate that grade transparency might create, and felt it didn't align with either institution's mandate.
Instead, we measured ourselves against our education and career goals and broad population averages, against which we were overwhelmingly successful. You didn't have to be better than your friends, only good enough for the college applications you had in mind (or later, the grad schools or employers you had in mind).
I view professional compensation the same way. A salary is good to the extent that it funds the housing, transportation, financial security, dining, entertainment, toys, travel, etc. that I'm after. As long as I'm in the Bay Area, no salary will ever be satisfying with respect to housing, but later in life, once I've attained conditions for my family similar to the ones I grew up in, what do I care if a coworker makes more? (Though I certainly couldn't resist reading and resenting it if available, I have no need for this information).
Put another way: I don't care that I'm beating 90% of startup employees if I still have to live with roommates. I don't care that I'm beating 90% of my high school classmates if none of them are going to college at all. I don't care that 90% of bigco employees are beating me if I can comfortably afford a nice condo with a short walk to the office. I don't care that 90% of my high school classmates are beating me if they're all going to Harvard and I'm accepted to the schools between #2 and #10.