An employee slammed hedge fund giant Ray Dalio in an email. Dalio loved it so much, he talked about it in a TED talk.

'Ray, you deserve a 'D-' for your performance in the meeting'

Hedge fund king Ray Dalio believes people should say what they mean at work.

Have a problem with co-workers? Tell them in person. Think someone totally flubbed that presentation? Go ahead and give them a lower rating using the company's real-time feedback app.

At Bridgewater Associates, which employs about 1,500 and operates the world's largest hedge fund, Dalio's ethos is known as "radical transparency." The idea is that honesty — however brutal — makes for a more effective, meritocratic work environment, one in which the best ideas surface and rigorous debate can flourish.

This corporate culture is controversial; all meetings get recorded on video and can be reviewed by anyone internally, a practice some allege leads to an atmosphere of fear and distrust. But from the stage at the TED conference in Vancouver, Dalio said it was an idea he wanted to spread.

When TED curator Chris Anderson asked why a hedge fund founder — one seemingly looking for every advantage possible — would readily share his secrets, Dalio suggested his legacy was at stake.

"This is something that's a win-win for everybody," he said.

As part of his presentation, Dalio shared internal videos and emails to demonstrate how his company works. In one example, employee Jim Haskel — identified on his LinkedIn profile as a director of portfolio strategy — slams Dalio's performance after a meeting and offers to coach him in the future.

It's the type of note that could hardly pass in other organizations. But Dalio not only embraced this email, but shared it internally within the company and went on to show it to the more than 1,800 attendees of TED.

"Isn't that great?" Dalio said of the email, to laughs in the crowd. "That's great. It's great because I need feedback like that. And it's great because if I don't let Jim and people like Jim express their points of view, our relationship wouldn't be the same."

Perhaps more interestingly, he also played a video of a company meeting and showed photos of an internal feedback tool called the Dot Collector.

The tool displays a list of attributes like "thinking brightly" and "logical reasoning," alongside names and photos of employees. An employee can click one of the attributes and then assess a peer along a 1-10 scale.

A video showed a meeting held a week after the election. Bridgewater's research team is seated around a U-shaped table with Dalio to debate Trump's possible effect on the economy. Early in the meeting, a 24-year-old researcher rates Dalio a 3 — a poor score — for not showing a good balance of open-mindedness and assertiveness. The researcher then rated her other colleagues, grading some more positively. Other people in the room had different opinions of Dalio; one rated him a 9, praising him for "the way you managed the discussion on Trump policies."

Once people could see their colleagues' scores, Dalio noted, their perspective would shift. They might question whether their own opinions were correct, a potentially paranoia-inducing moment, but one Dalio cited as helpful.

Meanwhile, an algorithm behind the Dot Collector gathers all this feedback and begins to make assessments on how the employees think. This can have career ramifications, helping the company to determine how to match employees with jobs internally.

"A creative person who is unreliable might be matched with someone who is reliable but not creative," Dalio said. "Knowing what people are like also allows us to decide what responsibilities to give them and to weigh our decision with people's merits."

The feedback from the Dot Collector is also used in helping to determine an employee's "believability." The most-believable employees might have higher scores on attributes like higher-level thinking, common sense, tenure and visualization, according to a slide shown at the conference.

Dalio used an example of a routine economics question posed to employees: "Do you think the expectation of the Fed's tapering is behind the bear market in bonds?"

The majority of employees polled said yes. But when a filter for believability is added, their views get cancelled out. That's because those with the most credibility voted no, even though they were in the minority. Their answer wins out.

"The process allows us to make decisions not based on democracy, not based on autocracy but based on algorithms that take people's believability into consideration," Dalio said. "We really do this."

He acknowledged that such a work environment did not fit everyone. About a quarter of the population can't work in such a culture, describing it as too emotionally draining, Dalio said. Recently, former Apple executive Jon Rubinstein stepped down as co-CEO after just 10 months on the job, a move Dalio attributed to lack of a culture fit. (See more of Dalio's views in a conversation with LinkedIn's editor-in-chief Dan Roth.)

Still, as his TED talk ended, Dalio encouraged the crowd of CEOs, nonprofit leaders and tech types to imagine what their day-to-day lives would be like if, while talking with people, they knew what others were thinking and vice versa.

"This sort of radical transparency is coming at you and it is going to affect your life, and in my opinion, it is going to be wonderful," he said.

He left a caveat.

"You don't have to tell people that their bald spot is growing or their baby is ugly," he said. "I'm just talking about the important things."

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