I disagree with the notion of people evaluating themselves harsher than that of their peers.
This past summer, I had a woman work for me who was just terrible. She was highly insubordinate, had a horrible attitude, almost always didn't even work a full day, started producing very questionable results, was incompetent at even the simplest of tasks and she even cried when she became frustrated.
I asked this woman to write a self-evaluation. She basically blamed everyone else for any problems she had, felt she had done an outstanding job and the only self-critique she gave is that she should take more initiative.
In other words, the people that need self-evaluations the most are the ones that are incapable of seeing areas that might need some improvement in their lives (this woman even blamed the fact that she was overweight on a thyroid problem, even though her doctors said she does not have a thyroid problem).