Based on Naaleh.com shiur by Rabbi Hanoch Teller
In his Shabbat Shuva drasha, Rav Chaim Brisker would say, "Chaim is speaking to Chaim, but if you wish you can eavesdrop." A very productive way to give criticism is to accept part of the blame and admit that you too have the same problem. This makes the perpetrator far less ashamed of doing wrong, and moves him towards rectifying his flaws.
Confine your criticism to a specific act. General criticism demoralizes people. It's important not to make unrealistic demands. Suggest small steps and ways to improve. A good way to offer criticism to a miser would be, "Maybe this year you can give one percent more." Increase the amounts little by little and soon the miser will turn into a generous donor. It is forbidden to shame someone in public. However if by remaining silent you will condone unethical behavior, you may speak out. In fact the gemara in Avodah Zarah says that if you don't rebuke a sinner, you bear responsibility for the sin as well. If someone is speaking lashon hara and circumstances make it difficult to stop him, try to change the subject. If that fails, get up and leave.
The quintessential example of proper criticism is the story of King David and Natan Hanavi. The prophet approached the king after he had sent Bathsheva's husband to his death. He came in the guise of one soliciting advice. There were two men, one wealthy and one poor, who lived in the same city. The rich man had many sheep while the poor man had one small lamb. One day, a guest came to call at the rich man's house. The wealthy host took the poor man's lone lamb and prepared a meal for his guest. The prophet then asked the king, "What should be done to this wealthy man?" King David immediately answered that he deserved death. Natan Hanavi then told David that he was the man. By depersonalizing the rebuke, the prophet was able to make King David view the act in its moral simplicity and indeed he had no choice but to admit and repent.
Think about all the times you were criticized and didn't change. Rav Simcha Zissel Ziv of Kelm would say, "Don't become angry if you can't make people be the way you wish them to be, because you too can't make yourself the way you wish to be." Confront the person himself. It's very tempting to share our resentment of someone with others. However, the obligation is to rebuke the person himself, not destroy his good name. Give him an opportunity to defend himself. Before criticizing someone, ask yourself the following questions: Am I being fair or am I exaggerating? How can I express myself without inflicting too much pain? How would I feel if someone criticized me this way? Am I enjoying criticizing this person? Is my criticism confined to a specific act or trait? Are my words non-threatening and in part reassuring?
In Parshat Kedoshim, the verse says, "You shall rebuke your fellow man and do not bear sin because of him." Rashi explains that rebuking should be done with sensitivity. Do not publicly embarrass the offender. It is both ineffective and immoral, and only puts the sinner on the offensive. In addition, you will have lost the opportunity to bring about change. The Sefer Hachinuch notes that criticism should be delivered privately, with tact and refinement.
Mastering the art of constructive criticism takes thought and insight. Let's invest the effort to do it right.