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RALEIGH— Three North Carolina departments reacted to an audit involving thousands of state employees' reviews which criticizes the performance management system.

Part of the 34-page performance audit shows that many of the employees received "inflated" reviews back in 2008. This is what has created quote a stir for the three state departments that make up nearly half of all state employees.

The DOT said it has since changed the way it handles reviews for its 13,000 employees.

“We've created a new employee performance system that links all the way back up to agency performance and it's also linked to agency targets that is linked to the work plan so we've got a complete loop,” said Ellis Powell, DOT Chief of Staff.

State Auditor Beth Wood reveals that 81-percent of employees received outstanding or very good ratings. While that is a high number, officials with the State Employees Association of North Carolina said that it is not surprising.

“Because managers cannot give bonuses. They can't give pay enhancements or leave enhancements. This is really the only tool they have to boost morale within their organization,” said Toni Davis, Director of Communications at SEANC.

The Department of Health and Human Services defended itself when it released the following statement: “Due to our tight economy and reduced budgets, numerous positions have remained vacant for extended periods of time and existing employees have taken on additional duties and hours.”

While the reviews are intended to reward top performers and enhance pay, state budget cuts have kept that from happening the last two years.

The Department of Correction said that they expect managers to evaluate their employees fairly and accurately, not for financial reward, but to ensure that they are providing the best service possible to the state.

Wood said that while more than 80-percent of North Carolina state employees received high reviews, only about 30-percent of state workers in other states receive high reviews.