@3kcv (Former Long Time Manager)
That was definitely the case prior to the "People Deal" and managers had to rank people. Once the performance criteria went away, managers had more leeway. Or so I was told. My last team was mostly top performers, so it was hard to say who was the least performer. Sometimes a project came up that was perfect for one person to handle, so they looked like the top performer while last year's top performer didn't have any high visibility project to work on. It didn't mean that s/he didn't stop doing above average work or became a slacker, but the visibility shifted.
Once the People Deal arrived, the manager started using a "spread the peanut butter" approach to bonuses. Everyone got a good bonus, and if the top performer's wasn't as high because it funded the lowest guy's bonus (there's only so much budget to spread around), so be it. For those that just did the minimum or avoided projects, they were on the lower end of the bonus spectrum and those that stepped up or were given additional projects were on the higher end of the bonus spectrum, so there was still a distinction. But at least someone who worked hard on a great team was no longer penalized with a bottom 5% ranking and no bonus even if s/he worked harder than a "clock-watching, does-the-bare-minimum" worker on a team full of slackers.