I have mixed feelings about performance reviews. On one hand, I think they’re not a useful way of going about appraising an employees performance, on the other hand, I think they’re a useful way of appraising an employees performance.
It’s all about context.
If you’re in a company that requires you to do them, then do them – it’s part of the process in which the company is entrenched and, unless you are way up the food chain, all you’ll be doing is causing trouble for people by not doing them and, if you’re going to do them, do them well.
Don’t leave them until the last minute, spend at least a couple of weeks going over your notes (you have notes about what you/your reports have done, right?) talking to peers (if you don’t have 360 reviews) and drafting and re-drafting the review. If you’re doing them for direct reports, then you damn well owe them this time and effort, a large part of their career is in your hands and, how else will they grow without this kind of feedback? If you’re doing it for your boss, then do the best job you can there too – this will give him or her the best opportunity of providing you the feedback you need if you take it as seriously as you should.
Doing reviews well involves good, constructive (or destructive) feedback, using examples where available and appropriate and making sure you cover all the bases. Be honest, but supportive. Be clear and don’t waffle around the subject, especially with “How can this employee improve?” type of questions.
Finally, if any of your feedback comes as a surprise to those it is intended for, you suck as a manager – this stuff should be coming up long before performance reviews.