Review (and compensate based on) impact rather than "performance", the latter carrying connotations of personal assessment rather than objective contribution.
Low impact doesn't mean you're a "low performer" or bad person, just that you didn't have any major successes that year. You'd fire over low impact if someone clearly didn't care, but not if they were just unlucky/ill-mentored/mistaken in choosing what efforts to focus on.
The problem with stack-ranking is that it lets people get "killed by the dice", to use an RPG metaphor.
Valve does this in its ranking process, specifically the ranking process is about determining a composite value relative to his/her peers that each individual has on the company that allows for varied impacts to be comparable. For example in a system like this, someone who is an amazing programmer who spends more time making everyone around him smart than writing features doesn't have to rank lower than someone who quietly sits by himself writing a ton of feature code. That, plus no expectation/forcing of a certain distribution (e.g. the 10% lowest scoring people aren't necessarily shit, they could all be adequate in terms of value and deserving of a solid bonus, it's just that they're not as high as the folks above them) are what makes the process truly work and keeps confidence/trust in the system high (as well as the fact that all employees participate in the process.)
Low impact doesn't mean you're a "low performer" or bad person, just that you didn't have any major successes that year. You'd fire over low impact if someone clearly didn't care, but not if they were just unlucky/ill-mentored/mistaken in choosing what efforts to focus on.
The problem with stack-ranking is that it lets people get "killed by the dice", to use an RPG metaphor.