Surprisingly, there are many great pianists or other instrumentalists who, though are highly skilled at their instruments, can not read notation well and fluently at first glance. Without the skill of sight-reading, these instrumentalists often feel somewhat insecure about their playing as they can't play anything other than the pieces in their repertoire. Imagine being a great pianist at an audition playing a highly difficult Beethoven Sonata and performing it wonderfully. What a great sense of accomplishment! But next in the audition, they give you a rendition of "Happy Birthday" to read on sight, and you simply fall apart. How embarrassing! This is why every musician must become a good sight-reader, so that they can handle any situation thrown at them. And the truth is, anyone can sight-read if they practice it enough.
How To Practice Sight-reading?
How do I recommend practicing sight reading? Pick a few songs that on sight you can almost play perfectly, at let's say half the tempo (obviously not music in your repertoire). Now take these few pieces and for a few days practice them as slow as you need to to make sure every note is perfect! The speed will come in time. By the end of your few days of playing them, I wouldn't be surprised if you can play them up to speed perfectly. When you're finished with those, pick a few new ones out that are on the same level or perhaps a little bit harder if you're ready for it. As your songs become more challenging, the pieces you considered difficult to sight-read in the beginning will be easy!
The Don'ts of Practicing Sight-reading
There are some things you should not do when practicing sight-reading. The first thing you should not do is use any phrases such as "Every Good Boy Does Fine" or "All Cows Eat Grass" to figure out the pitches you have play. You must learn to read the note by it's position on the staff, not by any phrase. The second habit you must stop (specifically if you are a pianist) is to look at your hands. It's obvious why this could cause complications... Your eyes aren't on the page!!
Don't forget about theory either! Your knowledge of scales and chord theory will help you trendomously. As you become more knowledgeable in music theory you will begin to recognize chords and scales much quicker, which is essential in sight-reading.
Sight-reading takes time as does anything. But consider it like you're learning a new instrument altogether! Sight-reading is very stimulating and addicting and once the ball starts rolling you won't be able to stop!