How to give effective criticism to employees?

Criticize the behavior not the individual
An employee with consistently outstanding performance may also show signs of disconnect. He or she may also develop a habit of tardiness and can go through a slow spell. In such a situation, the company must take some action to turn that around. But taking action doesn't necessarily mean criticizing the employee or even terminating the employee based on the tardiness alone. What is more sensible and in line with the company's best interest is to discuss the lateness with the employee and attempt to work on another arrangement. Criticize, but sandwiching it between positive strokes
Sandwiching means to deliver information that could be regarded as unpleasant between two positive notes in order to reduce the negative impact. Here, a manager can open a conversation offering a compliment on the project. After that he or she can switch to the critique using an appropriate transition like "however", "but" or "although", and at the end closing the conversation with an affirmation of an overall job well done. It shows the employee that he or she is valuable to the company.