How do I create value in time spent on Employee Performance Reviews?

I think its more than a HR problem, it's a managerial (top) issue.

If (right or wrongly) corporate policy is to have performance reviews (PR), and I'll assume their tied to raises and/or promotions, why would Management and HR just "accept" mediocre performance on the part of their mangers.

The question I would raise are:

a) Are PR important to our company
b) Are they really being used for raises/promotions
c) Why are we settling for mediocre performance in the creation of the PR's
d) If they aren't being used, isn't the time we're spending on the PR system a waste of resources?

See where that leads...

If most of your managers and executives treat performance reviews as something just to be done, then the process is just a waste of time. And, you may want to evaluate why you do annual reviews. Good managers evaluate staff performance continually and work throughout the year to educate and upgrade employee, or move the low performers out of the company. For managers, it is not an annual process, and shouldn't be.

For many companies the reviews are not much more than support for annual raises. Managers know who their best employees are; who the average ones are; and who the low performers are; and how much they believe each one is worth. And HR has a scale of increases based on where employees rate. So managers know what score they need to hit for each employee and the review process becomes a simple matter of how quickly the manager can hit those numbers to justify the raise to HR. (And as a side note, many companies have found themselves in labor lawsuits when they terminate an employee for performance and it turns out that the employee has years of excellent performance reviews in his file.)

In the end, most employees simply flip to the last page of the review - the part that tells them what their raise will be. Because for them, that is the most important measure of their worth to the company.

One of the best performance/review processes I have worked with had no annual review process. During the year, managers had to write up an evaluation for any employee that they wanted to promote; and notes on exceptional performance or discipline were done as events happened. When it came to annual increases, each department was given a pool, and it was up to the manager to determine how it was distributed. HR reviewed the raises in conjunction with the performance notes in the employee file. If there was a major disconnect, the manager would be asked for more information, but otherwise everything went through as determined by the manager.

It's an important part of being a manager to cultivate, coach and grow your employees. As such, you owe it to your employees to perform an annual review on them and to be critical on both their strengths/accomplishments as well as their weaknesses/areas for improvement, and then follow through with goals and objectives in the next year to address those areas for professional and personal growth. Regardless of the overall company's process for evaluations, you need to develop your people so you can retain them (people want and need to feel appreciated and wanted) and so you have candidates who can fill opportunities within the organization as they open up.