The problem isn't rating scales, it's the assumption that employee ratings need to conform to a bell curve and that the bottom of the bell curve needs to go. If the outcome of your hiring and firing processes is not random, this should not be the case.
I once had a teammate get an apology from our manager because he had been required to give a poor rating to someone.
Even if your hiring system is perfect, you'd still have a bell shaped performance curve. But since people understand that their hiring isn't perfect, they look for ways to keep improving. I wonder how many of those here who get their panties in a bunch over rating on a curve have actually had to manage, and make a profit from, largish groups of people.
"The normal distribution is useful because of the central limit theorem. In its most general form, under some conditions (which include finite variance), it states that averages of random variables independently drawn from independent distributions converge in distribution to the normal, that is, become normally distributed when the number of random variables is sufficiently large."
This is why engineers get frustrated with managers that pretend to know math. Employees are not selected randomly and companies like to apply curves to even medium and small departments. A normal distribution does not apply.
Well, if your hiring system is perfect (and your talent management, and your leadership, and your product, and luck is on your side) you could have a giant spike on the right: all perfect people.
That's not realistic, so there's some sort of distribution. It's probably at least somewhat bell-shaped. Even when the average is very high, and your worst performer is still "pretty good", they're still bringing down the quality of your staff. If your process is that good, you could replace that person and go from good to great.
This is all hyperbole: this only applies to large populations, this assumes you can normalize (hard), and this assumes no one is lagging (never true).
I once had a teammate get an apology from our manager because he had been required to give a poor rating to someone.