Okay maybe we are talking about different things. The way I'm most familiar with it is in federally-regulated industries in Canada, where it is called "Employment Equity."
In that framework, a manager is obliged to try to make their staff match the same proportion of women, disabled people, aboriginals and visible minorities as in the Canadian population.
To do this, they have to hire by
a) figuring out what the minimum requirements are to do the job effectively
b) advertising and recruiting on that basis
c) ranking candidates according to the requirements set out
d) picking the top ranked candidate if that person is female, disabled, aboriginal or a visible minority
e) skipping over and picking a less-qualified candidate instead, if the first-place candidate is not one of the magic groups, as long as the less-qualified candidate meets the minimum and is one of the four magic groups.
So it is true that Employment Equity never hires or promotes an unqualified candidate. But it does reject the best candidate unless that person is already one of the magic four groups.
That is unfair. Worse, it creates the perception (true or not) that any candidate from an ethnic minority, or a woman, or a disabled person, or an aboriginal person, is not actually the best person for the job, only that they were just good enough, and that probably some white male would have been better. It is terrible for morale, and it actually undermines its own stated goal of creating equity in the workplace.
Without Employment Equity, anybody beaten by an Aboriginal, female, disabled, or visible minority candidate could say "That person was the best candidate for the job; they beat me fair and sqaure," and it opens the door for respect, for natural mentorship and leadership by people regarded as clearly excellent. Instead it casts doubt and division. It is a terrible system.
The whole approach is wrong from the ground up, but even if there were any useful outcomes of preferential hiring, it would still miss the boat. It doesn't move men into female-dominated sectors (which actually reinforces the prejudice that work traditionally done by women is of lower value). It does not do a damn thing for gay people to help us overcome the challenges of discrimination we've faced. It does not deal with the challenges faced by a white male who grew up in poverty. It does nothing for kids who grew up in broken homes due to mental illness. And a million other kinds of disadvantage that make a real difference. And ultimately, maybe there is a better way, but Employment Equity is worse than doing nothing at all. It makes inequality grow.