A performance evaluation should never be a surprise.
It's not clear what feedback you give to your team outside of this annual review, but if you think they have had a "bad year", they should already know this - you should already have told them as part of regular, targeted feedback. They cannot possibly improve if they don't know they need to (until up to 12 months later).
If this has not already happened, make the most of it in this review, but you need to do better next year.
Genuinely honest self-assessment is difficult when it's tied to your pay-rise.
Who among us would truly say "I've pretty much slacked off this year, I don't deserve a rise"? Not many, I suspect; even if we might privately admit that, we'll try to highlight the good bits if we know our next year's salary depends on it. Even if you have kept them informed of your opinion (as above), many people would use a self-assessment to try to justify why they've done better than you think, because if they accept it without dispute, they're guaranteed to get no rise (and might even lose their job). Worst of all, the ones with a least accurate self-image are most likely to claim they've done brilliantly and paint a picture of themselves as amazing high-performers.
Basically, you are implicitly asking them to stake out a position as having done well, when you already know in advance you are going to tell them they have not done well. You are creating the conditions for a confrontational meeting where they have a vested financial interest in arguing with you... and even if they accept you are right, the difference between their expectations and your judgement will be damaging to their morale.
A performance evaluation should be a conversation, for which you are well prepared.
With all the above said, it is reasonable to open the performance evaluation by asking "so, how do you think you've done this year?". It's just not a good idea to ask them to write it out formally in advance. The trick is to steer the conversation in the direction you want it to go.
For example, if they open by saying "I did lots of hours on project X", you might respond with "you did, but do you remember problems A, B, and C that happened on that project? Do you think you could have prevented them?". Listen carefully, acknowledge the good things they have done, be fair at all times; but use open questions to lead them to an understanding (and, hopefully, agreement, even if it's uncomfortable) that your evaluation is that they have not done well.
To explicitly answer the question though - this should be a dynamic conversation, not a report they prepare in their own time. If someone writes down everything they've done well all at once, in a self-assessment, they can easily convince themselves they have done well overall, and then you will have to work very hard to make them realize that's not the case. If during a conversation you can provide examples, one at a time, of things that show they have not done well, there is at least the chance that they will be left with no choice but to agree with you.
A poor evaluation can be difficult to hear, and difficult to deliver.
It might be uncomfortable and awkward to have to tell someone you think they have done badly. They might get upset, or angry. Remain calm, stick to your position (as long as you are able to justify it - provide evidence whenever possible), speak slowly and firmly but quietly. Be prepared to take a break from the discussion if the exchange becomes heated. Record the outcome on paper, and ask them to add any further comments of their own, then sign the document to indicate their understanding and acceptance of the review.