As long as the algorithm is open source and the design can be agreed upon by both parties.
You may still need a human to make some decisions that feed into the algo. If not you’re probably not doing anything new in which case an algo is anyway better.
This won’t work in positions where you’re expected to work with ambiguity and bring order out of chaos though I’d be interested to think about how that can be quantified.
It really comes down to being transparent and clear. Humans can do it too, machines can do it better.
(perhaps the inputs to the promotion suggestion could be from a documented and equally-open algorithm; I still think it'd be nice to have the results reviewed and discussed (openly, by humans) before they take effect so that potential unfairness -- either in the levelling, or in the algorithm -- could be addressed)
Almost no matter what you do, people will get promoted until they are no longer competent, so it's best not to put too much effort into deciding.
In fact, if you're worried about lawsuits, just put everyone into the lottery and promote that way.
For example, with my personality analysis hat on: A) This would depend on my team & leadership and B) The algorithm should be an open industry standard.
Why A? Let's say CEO X hires his son-in-law who is, Jungian cognitive functions-wise, a Ti-dominant, Se-auxililary rational improviser. He's now the CTO. You work for that CTO. From your perspective, not knowing anything about any of the thousands of personality models out there, he's quiet and nice enough.
However, beyond your perception, and by dint of his might-as-well-be-a-dice-roll subjective leadership psychology, you now have an automatic covert contract not to make waves, to build a language of affinity with your boss, and to find clever workarounds for everything else. Why? Because he's your boss now, and those are functionalities that naturally appeal to him since he was just a kid.
IF you figure all that out, you might be in luck. On the other hand, if you assert your own egoic functionality and do anything anti-improviser, let's say like helpful contingency-planner stuff thinking down the road a bit...this plays counter to your boss's functionality, so yeah no, probably not. Watch it--this is freaky. To him the idea of future planning is kind of paranoiac territory TBH. But he won't call you that to your face.
Further, he's a Ti-dom. Subjective logic is his focus. He solves problems as they come up! So some contingency thinking is also draining his ability to use his best tools. And so he believes you shouldn't need to consider a what-if, imagined problem, when there are live issues in the queue now.
And also as a result, this promotion you are after is kind of like a puzzle in an RPG, he's your DM, and while your player character may have the stats, you aren't even close. This is enjoyable for him. He's making you puzzle it out. You'll learn to think more like the master...err...him!
And BTW he thinks that you naturally, consciously understand all this, because everybody thinks that everyone else thinks the same way they do.
Why B?
Read A and consider that while I selected some neo-Jungian viewpoints and so on, there are _thousands_ of relational models which will happily show you why your next set of work relationships and the emergent systems are probably a dice-roll unless you are educated in these areas.
So why even work on your competence, or even your CV, if you can work on the people you know? Select for people who will naturally think you're awesome! That's where so much quality hiring is done. And it feels great to be wanted, and then, hired.
But your industry leaders would prefer that the initial condition (selecting for you randomly applying while not knowing anybody at this workplace) was not really happening at all. And for very rational reasons, and they should be able to weigh in on that if it can help people everywhere succeed.
An open industry standard would generally select for industry-wide psychological overlap. That is--how _you_ overlap with industry.
That way you receive promotions based on an intersection with _what generally works well in industry_ rather than an intersection with your boss's psychology, or your coworker who is out to get you for reasons, or whatever.
Just some thoughts from a different, but relevant perspective...