[asalazar]

Meritocracies are great sometimes but they have the nasty side affect of promoting people into jobs they suck at. Just because you're the best at being an individual contributor, it doesn't mean you're going to be a good manager, and being a good manager doesn't mean you're going to be a good executive or entrepreneur. In organizations that value meritocracies absolutely, you end up losing your best people if they don't scale.

[SwellJoe]

This is known as the Peter Principle. But, I would think a meritocracy would strive to test for, or respond to, promotions into levels of incompetence by pushing the person back down into a role where merit is higher than other available candidates.

http://en.wikipedia.org/wiki/Peter_Principle