I think you are mostly correct. But the problem with Google's promo/perf process is that there has until very recently been the expectation that all employees eventually get to Level 5 (Senior Software Engineer). When I started it was outrightly stated that if you didn't get to this level within 5 years, you would probably end up getting, ehh... scrutinized.

They have since backpedaled on that, and now it's not an expectation. But you can imagine what kind of frustration this can lead to if you're continually passed up for promo to that level.