In my role as a tenured member of my department, I observed a colleague's class the other day, and wrote a report for that colleague's file. We do our observations according to a sort of plan. Before the observation, we're supposed to meet with the person we're observing to learn what they're working on in the class, what problems they're finding, and so forth. Then we observe the class and take notes. After the class at some point, we meet with the person again to give them verbal feedback. Finally, we fill out a report template which asks us for some basic information, then asks for a narrative of the class observation, a short section on the strengths we noticed, a short section on suggestions for the person, and an overview giving our conclusions. The idea is that the report shouldn't be anything you haven't already talked to the person about, so there shouldn't be anything unexpected on that end.
And then when the people writing the letters up the line (either letters from the tenured members committee recommending for/against renewal, or for/against tenure and promotion), they can quote from the observation report as part of the evidence about the person's teaching.
I really like observing other teachers, as a rule. As a committee task, it's not usually difficult. You have a nice chat with a colleague, sit and take notes for an hour or so, have another chat, and write up the report. If you see things you think you can make good suggestions to help with, you make those suggestions.
My most recent observation was like that, except more, because the colleague is a stellar teacher, and I really enjoyed watching them do their thing. It was like watching a really good artist at work; you might not realize what the person is going to do with the blob of white paint they just put on their brush, and then they do something with it, and it works really well, and you think, "ahh, that person's an artist, and I can see their artistry." And then you take away a little better understanding, and you can use that in your own teaching.
Times like this, I'm grateful for my colleagues. We're so lucky to have this colleague, in particular.
(I can, of course, imagine nightmare scenarios, with unfair, unkind observers, or with inept teachers. But even the least apt teachers I've observed, I've felt like I could offer one or two concrete suggestions to help them develop as teachers. And I try not to make those quirky suggestions based on what I do, but real suggestions that will be helpful. On the other hand, maybe some of the people I've observed felt like I was unfair and/or unkind.)