Great article on performance reviews by Steven Sinofsky:
Among any set of groups, almost all the groups think their group is delivering more and other groups are delivering less. In a company with many groups, managers generally believe their group as a whole is performing better by relevant measures and thus should not be held to the same distribution or should have a larger budget. Groups tend to believe their work is harder, more strategic, or just more valuable while underestimating those contributions from other groups.
A must-read for anyone who'll have to tweak or implement a performance review system in the context of their work.