Fairly big (>1000 devs) company. Performance reviews are twice a year.
In theory: before each cycle, an employee and a manager meet to discuss manager's expectations. If an employee "exceeds expectations" he or she gets a good rating. The rating is then approved and bonus and compensation is determined.
In practice: the rating is kind of determined by how employee's work contributed towards "important goals" of the company. This contributes to a deluge of half-assed work pushed into production just before the evaluation begins. Also it of course depends on performance of the other devs. The existence of the curve was never officially acknowledged but it is an open secret that it indeed exists.
The evaluation process is extremely opaque and shrouded in mystery. An employee (and his or her manager too) can never be certain that enough work was done for a particular rating as they are subject to correction at the highest levels of hierarchy (rumor has it that the CTO himself approves the final ratings of all developers above certain level). The process is also extremely long (easily exceeds 1.5 months) and taxing for line managers who have to defend their subordinates' ratings against cuts.
The meetings between an employee and a manager are very awkward. In theory the manager should discuss career prospects and deliver valuable feedback, but what is the point of delivering feedback on something that happened 5 months ago? Why would you wait for so long to do it? So everyone just goes through the motions during these meetings as quickly as possible.
The whole process is very inefficient. Frankly, it stinks. (Personally, I've fared fairly well so it is not an instance of sour grapes). My opinion it that the only reason it exists is because it provides the potential of almost authoritarian control and ample micromanagement opportunities.
I wonder, are my experience and feelings somehow special or is it a common thing in our industry?