How could giant corporations have drifted into cluelessly rewarding people based on perceptions rather than actual performance, without being clobbered in the marketplace by keener-eyed competitors who are more genuinely meritocratic, and therefore more efficient?

Part of the answer is that their major competitors tend to be just as inept at recognizing genuinely good ideas and noteworthy performance as they are.  This explanation begs the question, though, of how so many of them have wandered into la-la land at the same time.  For a more meaningful answer, we need to re-examine what’s happened to certain core precepts of our free enterprise system.