This might work for a company with no competition and railway cars full of advertising money coming their way regardless of their actions.
In other places these things end up as a massive disaster and end up creating a culture of sabotage. There is a lot of backroom dealing that goes in these 'anonymous' committees. People who sit there aren't individual evaluators like in a public exam. They are generally people who come from teams around you. And they try to optimize and sabotage based on what is good for them. For example, a well deserving candidate's promotion can be turned down for a total irrelevant reason, while some political lackey could get promoted by adding all sort of cooked up recommendations to their 'promotion packet'. Most of the times all this is done so secretly that when promotions are announced the come across as a shock to most people. Of course people see through this all the time, and cubicles full of employee always talk of 2 + 3 not adding up to 5 in these cases.
Another huge scam in these things is the 'important work' bogey. You could have contributed way more code, fixed a lot more bugs and added a lot more value, but your promotion can be denied on the grounds of not doing 'important work'. What the definition of 'important work' is nobody knows, as its largely defined by work done by the guy getting promoted, no matter what work that is.
There are more things to this. For example, salary negotiations play another toxic game here. In most companies budgets are fixed. So a manager is likely to reward his lunch buddy far more than other people in the team. Eventually over 3 - 4 years you realize some of your team mates are now making way more disproportionate money compared to their peers and the work. This spills into all sorts of other opportunities.
The best thing I heard was from one manager, who told, if your manager isn't telling your for sure a few months in advance that you are getting promoted, you most likely aren't.
In most companies its already decided who gets promoted, they just have to do these 'promotion packet' and 'anonymous committee' rituals to cook up documentation to justify it, to protect themselves from law suits later.
All of this called 'negotiation' by those who benefit from these schemes. In reality it is getting financial and other favors in return for proximity and servitude to power.