I received the following email from a reader:

I started with this company almost two years ago. No company in this industry is doing well, but I thought I need the new challenge and it's exactly what I needed to move up in my career.

The targets were very reasonable and I achieved them above expectations. I mastered the processing system quickly as I consider myself computer literate. 

Two weeks before the rating my coordinator called us all in for a meeting and dropped bad news on all of us: that we could expect a very bad rating but that we shouldn't look at it as a negative thing--we should see it in a positive light.  Because of the company financial constraints, we would be rated badly.  This made no sense to me but nevertheless, I never thought that I would be one of those candidates that would score badly. 

To my surprise, I received a two out five: needs improvement.  I'm disputing the rating. 

This is an example of a company that has screwed up the idea of pay for performance. They don't have money for raises so they've given people bad performance approvals. 

This is not how pay for performance is supposed to work. If you can't afford raises, you don't give raises, but you still give accurate ratings.

It's possible that this company has written policies that demand a percentage of X if the rating is Y, and so they are fudging all the ratings in order to get around this.

This is what we call a recipe for destroying employee morale. What needs to happen in this case is that the policy needs to be re-written, in order to allow for situations where there isn't enough  money to offer top performers a raise.

The only thing I can see that this company did right was having the manager tell you it wasn't you, it was the company. I suspect she did this behind the senior management team's backs.

An employee's performance evaluation should reflect only one thing: performance. When companies have forced ratings distributions, you can also have situations where someone deserves a higher rating, but because the number of "exceeds expectations" have already been met, you receive a lower rating. While I'm not one to argue that every employee exceeds expectations, I have seen some groups rated poorly just because the VP wanted to reward another group.

You should go on record and make sure your above expectations performance is documented. You should also start looking for a new job. You've been there two years, which is a respectable amount of time. If you had just gotten no raise, I wouldn't say there is a rush to get out, but since the company has shown that they would rather throw employees under the bus than correct their own misguided policies, this isn't a place you want to work for.

You have the luxury of having a job while you look for one, so hopefully, you can find a company that treats their employees like humans rather than something that must succumb to a policy.