Here’s another comment that came in from my friend, Ian Cook. (I list his blog, Fulcrum, in my blog roll.)
A controversial area, to say the least. Professionally, I would advise my client to stay away from building values into performance reviews where the item will be subject to some form of rating. Values are not tangible but rather are evidenced/expressed through behavior.
That said, I think is is most appropriate to broach particular values in a discussion with the employee at performance review time or any other time. If a manager feels the employee is not operating according to a particular value in his/her work, by all means raise it as an issue but translate the value in question into behavioral terms in order to have a meaningful discussion about it.
For example, lack of integrity would be reflected in the individual espousing one thing and acting contrary to it. Or, not being a team player could be surfaced in terms of work product or information that is not handed over to a team colleague in a timely manner.