I was a manager in a nearly identical situation. I had 5 engineers working for me at a remote office. The "curve" had not been used in past years. Now they insisted on applying it. Since 4 out of 5 had substantially exceeded their goals it would have been a lie to state that any of them had not met expectations. So I told my boss no, I'm not doing it. You can take whatever raise you planned for me and spread it across my direct reports (unstated was that I would almost certainly quit as a result). Or you can fire me for insubordination. He ran that back up the chain of command. Apparently I wasn't the only middle manager who refused to do it, as senior management ended up rescinding the order.
Moral of the story: If you are a middle manager then grow a backbone.
Moral of the story: If you are a middle manager then grow a backbone.