I'm with a contractor to the government and it's much the same minus promotions. You write your review, you have a meeting with your manager, you are handed the standard COL raise that everyone receives and you repeat every year. I agree, it's not a good system. Those which should be promoted or fired aren't. Those which show initiative and intelligence are often worn down year after year eventually leading them to read their Kindle all day or finding a new job. There is little incentive to do anything other than the bare minimum here and I suspect that's the case for many of these types of workplaces.