Microsoft has the dreaded performance review curve as well. Probably a factor in all big companies. Mini-microsoft does a pretty good job of skewering it. The fatal flaw is that it encourages managers to hire people according to the curve. "We should have about 1-2 superstars, 3-4 average performers, and 1-2 underperformers so that come review-time I don't destroy the morale of the team." Or if it's a bad manager, replace that last part with "...so I can have an easy, non-controversial review cycle."
If your school of thought is that you need people of all skill levels and not just high performers, then the system is at least consistent, although you're clearly wrong.
If you want to encourage hiring and retaining high performers, then this system is stupid. If you are a manager with a great team, then you have to rotate your one available high score through your people, and hope they don't leave before it comes around to them again.
Probably the biggest thing that could help fix this is shorter review cycles. Gettng a curve-induced neutral review wouldn't be so bad if you knew it was just three months until the next one.
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