I absolutely vote for reviews, but you have to do them right. Use it as an opportunity to get feedback. Make sure the review is a two-way street. Use them to follow up on longer-term employee goals that you can miss on less formal more frequent one-on-ones. Use them to follow up on longer-term employee requests (two-way street). Use the employee review as well to make sure your employee is paid well (potentially give a raise if it's earned).
Don’t make mistakes that other companies make that give reviews a bad reputation. If you have a form for the manager and the employee to fill up, make sure it's short (1 page max). Make sure you ask the truly important questions only (how I feel I'm doing, in what did I do a good job, what do I need to improve, what do I need from the company? What did I want to accomplish in my career in the next X months/years? Add you own, non-BS questions.). Make it so the form does not need to have a book written in response to the questions. Have the employee submit the form to their manager before the review so the manager is ready and can address the questions.
If you're doing it right, the form takes less than an hour to fill (the answers must be thoughtful, after all) and the review should take half hour or less.
Without formal review every X months (I'd suggest no less often then quarterly), you will miss very important stuff that's always less important than the fire you have in front of you (such as giving a raise, following up on long-term goals and promises, etc). If you do not have a periodic review process, then have something periodic that forces you to follow up on both the good and the bad about the employee.