I follow a few rules:
1) Talk to the pilot - they will usually know what they need work on. If a pilot doesn't feel confident in stalls because he/she did them over 2 years ago, it would be a good idea to work on stalls with a CFI.
2) Look at their logbook - if you see nothing but VFR cross countries in a Cessna followed by GPS approches, it would help to do some pattern work and maneuvers.
3) Overuse of automation - If there is a GPS and autopilot in the plane, the pilot may not be confident in using VORs or hand flying the airplane in IMC. Doing some VOR work or flying "simulated instrument" should help in this scenario.
4) PTS standards - If the pilot is a private pilot and after doing slow flight, 8 times, the pilot stalls the airplane every time or can't hold heading, he/she needs more work and a sign off is not recommended.

At any given time, if you as a CFI feel that safety of flight has been compromised, then you shouldn't sign him/her off.

Here is an excerpt of a flight review report of a guy who I didn't sign off. You can see obvious signs...

- Pilot read "Mixture Idle Cut off" from the checklist and put the Mixture to full rich
- He started the plane and powered to 1500 RPM to taxi, held 1500 RPM during taxi and was taxing at a high speed
- After refueling the plane, he forgot to drain the fuel and did not know about
the other 2 fuel drains at the bottom (3 total under the plane, he knew of one)
- Ground gave us clearance to taxi to Runway 9 for take-off. During take-off
briefing, he said that we were taking off from Runway 27, I corrected him and
he said that he got confused.
- He held short of Runway 9 and called ground control for a take off clearance. Ground control instructed him to contact Tower.
- During take-off briefing, he mentioned that he would hold 80 knots until 1000 feet, and then pitch for 90 knots until 3000 feet. He held 75 until 1300ft, slowed down to 70 until 1800ft and then down to 62 knots at 2600feet.
- Tower cleared us for immediate takeoff with traffic on 1 mile final; the pilot accepted the take-off clearance saying "Cleared for takeoff" and slowly added power. I had to tell him to add power immediately for takeoff.
After takeoff, I mentioned that if he accepts an immediate take-off clearance,
he has to expedite his takeoff and if unable, he should say "unable" and not accept the takeoff clearance.
- After takeoff, departure control assigned a heading of 110. He accepted the
heading assignment, flew 110 and 10 seconds later slowly rolled to 090 and when I asked him what heading we are supposed to be on, he said "090", instead of the assigned 110 heading.
- After flying on a heading of 110 for 20-30 seconds, departure assigned a heading of 150. He flew the assigned heading, but had trouble maintaining
constant airspeed during the climb.
- Upon reaching cruise altitude, I told him to fly a heading of 180 and maintain 3000 feet. He initially maintained it for a few seconds, then slowly drifted to 60 deg off to a heading of 120 deg and was at 3400 feet. He flew
this heading and altitude for about 30 seconds and did not recognize that he
was off heading and altitude.
- At this point, I informed him that he is not meeting practical test standards for a private pilot certificate and that I cannot sign him off for a checkout. He said "then I guess the flight is done, your controls" and I flew the airplane back to the airport and parked the plane.

Upon landing, he seemed upset since I was the 3rd and most experienced flight instructor that he flew with who wouldn't sign him off. I informed him that he is getting overloaded in the air and his situational awareness is very poor. I suggested that he try flying out of an uncontrolled airport until he can focus on flying the airplane and provided him with the phone number of fellow flight instructor at an uncontrolled airport.