On Tuesday, Treasury Board President Tony Clement said the system is aimed at boosting productivity and efficiency while weeding out workers who don't make the grade.
The review system will include annual performance objectives for all employees, mid-year evaluations and annual written assessments.
It will offer plans for improving performance with clear timelines for employees to shape up.
"Either poor performers improve and become productive as employees or we will have to let them go," said Clement.
"If we want to build a 21st century public service, complacency is not an option. Excellence is the benchmark," he said.
Execution of reviews a concern
Union leaders, however, are concerned the performance reviews will be a blunt instrument in the government's efforts to further downsize the public service.
Public Service Alliance of Canada national executive vice-president Chris Aylward said the potential for abuse is a concern.
"I'm the manager and I really don't know how this process works and I really haven't been trained on how this process is supposed to work and I simply don't like you. Guess what, you are not going to get a very good rating," said Aylward.
"Especially if I know that the lowest person is going to be out the door, so that's the worst case scenario we can see and we're very concerned about that," said Aylward.
Labelling public servants "poor performers" or "complacent" also doesn't set the right tone in advance of the collective agreement negotiations coming next year, said Larry Rousseau, PSAC's National Capital Region executive vice-president.
"I'm not getting warm and fuzzies here. I'm not seeing that the body language is about improving the public service," said Rousseau.
The performance reviews are slated to start in April 2014.