This is particularly helpful when an employee is doing well in most areas, but is having problems in one aspect. When employees know that their review will cover the full spectrum of their performance, it's easier to accept criticism in one specific area. It keeps the review in balance, and prevents a certain criticism from dominating the review. The employees walk away from the review feeling good about their abilities, and feeling capable of improving the areas that elicited critical feedback.
It's important for the manager to keep in mind the purpose of performance reviews in the first place. If you're not careful, performance reviews can be taken as a look at past performance for which the employee expects to be either castigated for doing poorly or rewarded with a raise. But looking back is not what a performance review should be about. Instead, the right perspective would be to ask "what information can I provide this employee that will help him or her reach a higher level of performance in the future?" Certainly you look back to develop that feedback, but the focus should be about the future.
A raise or promotion shouldn't be a reward for past performance, but fair compensation for future accomplishment. And one of the best guides and vehicles for making sure those future accomplishments occur are effective performance criteria documents which form the foundation for any successful performance review.