For a while, we were on annual review dependant raises. But the problem with the system was that supervisors were only allowed to give out x number of outstandings. This was when I was working at Salt Lake TRACON. 18th busiest facility in the country, #1 on time commercial airport, and we went two years in a row with 0 operational "errors" (controllers letting airplanes too close together).
My crew was all young guys. Supervisor tried to give us all outstandings, and was told he couldn't. His reasoning was we were all young, aggressive go getters who went above and beyond every shift to run a safe and highly efficient operation. Nope. Reverse quota for raises. Can't give your whole crew outstanding ratings.
Are you guys on "pay for performance"? That was a test system set up by Bush to supposedly get rid of the "everybody gets a raise" standard. My part of gov got switched to it, and while I was a GS-14 in the real world, in the pay for performance world, I was converted to a ZP-4.
It worked similarly to what you described, in that while your boss was supposed to rate by performance, at the same time, they were told that "excellent" was an extremely rare performance review to give out, and they would be questioned if there were more than one or two (or even any) in their dept. Which in some ways led to the opposite of what pay for performance was supposed to do. Every time I sat down with my boss and he told me, "I can't give you an excellent because it'll be reversed by HQ, because we can only give away a certain percentage of them." Which of course led me to say, "Then why am I busting my ass?" I only got one "excellent" in my time in that program, and talking to other high performers in the office, I got the impression that the boss was rotating his one "excellent" through his pool of high performers.
At the same time, I had back door access via a friend at our HQ to who was getting what in the new plan. Somehow, something like 50% of HQ staff were getting "excellent" in their reviews by our Director, who was the guy who said supervisors couldn't give out "excellent" reviews. Somehow, the HQ employees were getting bonuses as well, which was another thing that was only to be rarely given out. In the regular GS system, I used to get a bonus all the time, which was the way supervisors fixed that system, where lazy bums got the same annual raise as good performers.
I did make out a little better on pay for performance, in that my boss would put me as close to excellent as he could get away with, which pushed me from a GS-14 step 2, where I was when the plan started, to the equivalent of a GS-14 step 10, where I was when I retired, in close to half the time it would have taken in the old system.
The new system though, was/is rife for favoritism. In the GS system, high performers would get pissed off when every lazy jackass would get the same raise as them. In the new system, good performers could make out, but if you were buddies with the boss, you could also make out, regardless of your performance. My boss always gave his two surfing buddies in the office about the same reviews as me, and while one of them deserved it, the other one was probably the laziest person in the office.
