I was once a manager at a medium-sized consulting company. I had an employee we'll call "Roy." He was always involved in the critical parts of large, profitable projects. He generally got 3.5 to 4 out of 5 in his peer reviews. There was another guy, "Jim." Jim was mostly on smaller, simpler systems and maintenance work. He generally got similar scores in his peer reviews. For their first performance review, I gave Roy a 4.2 and Jim a 3.8. Roy got a 7% raise and Jim got a 5% raise. Later on, I was the lead dev on a project with Roy and Jim as my team. Once the project got rolling, getting Roy to actually produce code was like pulling teeth. I talked to the other leads and found out that Roy talked a good game in front of clients but required a baby-sitter to actually get anything done. He was always on the critical components not because he was a great developer, but because the lead or architect was already paying extra attention to the critical components and could more easily manage the babysitting. Jim, of course, got all his work done on time with minimal fuss and even stayed late to finish some of Roy's work.
I went back and looked at those peer reviews... Roy's lead dev had given him a review that averaged to 3.5. The soft skills were mostly 4's, the technical skills were mostly 3's and 4's. (He was an OK developer when you actually got him to work.) My only clue would have been a 2 in "Works Independently." Jim didn't have other devs on his projects so he had Project Managers giving him 3's and 4's for soft skills and 4's for technical skills.
A poorly designed performance review was actually worse than no performance review.