Our HR policy states that all employees receive performance reviews annually. This are not necessarily "tied to pay".
The performance review is designed to guide the employee in their work by setting goals or objectives for the next term, identifying what went well and what could be improved upon over the course of the passed year. The process involves a self-assessment as well as a supervisor's assessment.
The key is that it is a tool to set the employee and organization up for success. Ours includes a work plan as well as a skills development plan.
NB: If there are issues with an employees performance, we approach these as they arise so that the annual evaluation is not a surprise or a disciplinary tool but more importantly is about growth and support.
We do annual performance reviews, with midterm check ins, all tied to each paid staff members work plan. This is tied to pay.
For volunteers, we do show reviews. A process involving 2 members of our programming committee and our Program Director.
I have attached the outline I use for performance reviews. It is one piece I use, along with the work plan, job description and any positive or negative communications throughout the year.