For example at a previous tech company the levels were something like this (going by memory, not exact):
1 - Fails to meet expectations.
2 - Meets all expectations, delivers on time with only occasional mistakes.
3 - Exceeds expectations, delivers ahead of schedule with better quality than asked.
4 - Consistently invents new technologies and promotes them within the organization with demonstrable financial gain to the company.
5 - Invented the field (literally, that's what the description said!)
So unless you're one of a few people in the world (who didn't work for that company), it's impossible to be rated a 5. A 4 is also nearly impossible, sure maybe once a decade you might achieve that but nobody on earth does that every year.
Doing your job solidly well is clearly a 2, but a 2 is also seen as a straight road to RIF. In what other industry is that so?
So basically everyone is competing for 3 (mediocre bonus) or 2 (RIF). Sure, a few 4 and 5 get handed out to the friends of the VP but not for meeting that impossible criteria, only through politics.