I've known several people in management in my industry (I've changed jobs a fair amount plus I'm in a consulting industry) who became managers and then either self demoted or moved over to equivalent technical roles specifically because they were forced to basically lie and say their great employees were average or even below average, couldn't give bonuses that matched performance, and couldn't give raises that matched performance.

It literally made them depressed to have to treat hard working people unfairly. So they stopped doing it.

Now that just brought the question to my mind: what does that mean about the people who do that and keep doing it? Are the just psychopaths? Sociopaths? Evil? Trapped?

I think the important thing to do is find the people who are forcing these dishonest review systems and challenge then directly on why they're making managers lie about employees performance. Contact the ombudsman if they have one and point out the dishonesty.