In an earlier era of management, employee performance appraisals were always conducted by a supervisor or the owner of the business. Unfortunately, the more removed a reviewer is from the actual day-to-day action, the less likely she is to have a true understanding of what's going on in the ranks. The employee peer review is an opportunity for members of a workplace team to critique one another and provide constructive feedback on how they can all do a better and more productive job.
Familiarize yourself with the scope of your peer's duties and responsibilities. This involves a combination of (1) reviewing the assignment documents (i.e., personnel job specs or a list of specific project tasks for which he'll be held accountable), (2) asking the employee to describe his duties, and (3) making personal observations.
Create a list of positive and negative character traits that you have witnessed first-hand. For instance, perhaps your office team member has excellent intermediary skills and the ability to come up with creative compromises and yet has a tendency to procrastinate on her own deadlines or not proofread her activity reports as thoroughly as she should.
Discuss how the behaviors identified in Step 2 impact her interactions with others, her professional development, and the reputation and growth of the company. For example, procrastination not only keeps the project from being completed on time but could also preclude the company from competing successfully with others in landing lucrative contracts. In praising positive traits, point out how her calm demeanor and encouragement of others to participate in discussions reflect a leadership style that could be honed through additional training.
Identify specific instances of tasks that were performed well and tasks that fell short of expectations. Provide constructive suggestions on how similar tasks could be handled in the future. For example, a project that was incomplete may have been the result of the employee having more assignments than she could realistically handle or the inability to analyze and prioritize those assignments that needed more time and research.
Recommend action steps and timelines to remedy existing problems. These could include new assignments that tap your peer's underutilized talents and knowledge or suggestions for classes that could help remedy performance deficiencies.
Conclude the peer evaluation with a fair and objective acknowledgment of the employee's contributions to the team. In the event the peer evaluation is going to result in termination, it's important not to diminish your peer's value as a human being by ending on a negative note. Not every job is going to be a perfect match and your observation that the talents she has might be better appreciated in a different environment is a better send-off than a declaration that she's not good at anything.