Any tips on delivering performance reviews?

I find it is much easier if you go into the discussion with no surprises. To do that, you need to be having ongoing discussions that fit with your review. Talking about bad performance is difficult. But, it is only fair to the employee that you give them a plan for improving and offering an appropriate level of support and resources.

I usually ask the employee to do the first draft, but give the employee a few points to write about.

Here is the most important tip (in my humble opinion) ....... deliver (the performance review) as often as possible and not just once a year. I am NOT a proponent of the YEARLY review.

Second, YOU should get comfortable (and dare I say, enjoy) with face to face discussion about it. In fact, I think that should be one of the most important trait/skill of a manager. If you really want the best for the employees, then giving them feedback to better themselves will be an enjoyable experience. Honest, unbiased and treat as a person discussion about performance is one of the things subordinates needs from their managers.

If you are not yet familiar with the concept of OKRs (Objectives and Key Results) , I recommend that you look into it.

Emerson Galfo makes an excellent point: conduct your employee reviews on an ongoing basis, not just once a year. Companies like W.L. Gore, Dun & Bradstreet, Rackspace and Aflac rely on employee feedback loops to maintain a high performance culture. They solicit feedback from employees on an ongoing basis, identify the root cause of their concerns, then following through with meaningful changes.

Make use of the performance review to realign employee skills (hard & soft), performance levels and decision-making with corporate strategy and goals. Revisit business processes and projects to determine whether they are aligned with corporate strategy and goals as well. Finally, assess whether your functional area has the right infrastructure (IT systems, technology, equipment and facilities) in place to help the employees meet their performance expectations.

I have a simple method that I like to use. I think of 3 memorable things about the employee from the past year and use them to highlight the written review. For instance, one year I had one employee call me to ask about a procedure. I thought one method was the best, but asked her opinion. I thought about it and decided her way was better so we used her method.
When I mentioned that day in her review I was able to reinforce my desire for employees to think for themselves and innovate, and I got to see that the employee really appreciated it. I think employees listen more when I'm going over the 3 things because we're not just going over what's written in front of them.

Steve makes a great point as you need to give the employees positive reinforcement. Reviews should be performed quarterly at minimum. The employees should also prepare self-assessments as it is important to see where they feel that they are currently and what their endeavors are in the future as it is important to align these with corporate goals. Documentation during the year is especially important if there become issues with the employee based on performance. An improvement plan can be set up prior to any discussion of suspension or termination. Always keep Human Resources in the loop as you want to minimize company risk.