The way I see it, it's like a coach to a sports team. When the coach pressures the team too much that does not yield good results. In fact, it usually yields very negative effects. Being too lenient on his team might not be the best thing either. There has to be a middle ground.
I would say though that the positives to an employee review is that the employee gets to see where he needs to improve and might become aware of flaws in his performance that he didn't see before.
The negative part is that the employee may become stressed out as we humans often times become when we are put under a microscope and being tested in such scenarios.