This system of evaluation is not doing justice to the employees' work. Those who are good are getting fewer scores, and those who are not good are getting higher scores. The system does not reveal good/bad traits in a fair, proper, or just way.

This system is ------ .

nonfunctional? unfair? non-revealing?

Of course, unfair may work but it seems as there should be word that are more to the point for such circumstances.

This system of evaluation is not doing justice to the employees' work. Those who are good are getting fewer scores, and those who are not good are getting higher scores. The system does not reveal good/bad traits in a fair, proper, or just way. It does not show the merits of the employees properly.

This system is ------ .

nonfunctional? unfair? non-revealing?

Of course, unfair may work but it seems as there should be word that are more to the point for such circumstances.