There are several possible reasons for pruning rhododendrons: maintenance, shaping and rejuvenating although in general they need little pruning.

Maintenance

Maintenance pruning should be done every year. This is best done when the flowers have just faded. First, remove all flower trusses with a pruner. Make a cut just ½ inch above the new leaf growth. Then, prune back any dead branches all the way to the base. Also, cut back any diseased branches (they usually have a different color) into a live portion of the stem. Some rhododendrons (including the popular P.J.M. series) are sterile and don't set seed so their flowers don't need to be removed.

Shaping

The purpose of shaping is to keep the natural shape of the bush and/or to control its height or width. This is best done by following down the branch you want to trim and cutting it just above the next whirl of leaves at the new height. Trim the branches to different heights to encourage a more natural look. Simply removing the terminal bud from a stem will encourage branching. This procedure is best done in late winter. Note that you will not get many flowers in the coming year. Again, remove dead or sick branches

Rejuvenation

If a rhododendron shrub has become very large and straggly, then it can be revived by a more extensive pruning regimen. Most rhododendrons can be severely cut back and will re-grow into a more attractive plant. Cut up to a third of the main, primary branches back to about 1 or 1½ feet in length at a spot with a number of small, latent  buds. Again, leave branches of different lengths to achieve a natural look. The plant will tolerate the process far better if only about a third of the branches are removed each year. Rejuvenation should be done early in spring, mid-March to early April in the New York area

Some rhododendrons (e.g. R. macrophyllum​)  can be treated more drastically and all the branches can be cut down to a few inches of the ground and they will re-grow.  However, it is not recommended that you use this procedure unless you know that it will be tolerated or you have tested it first on one branch. Note that Dexter hybrids do not respond well to this treatment. After severe pruning it is important to keep the plant well watered and lightly fertilized for the first growing season 

Additional details on pruning rhododendrons can be obtained from these sources:

The American Rhododendron Society

Fine Gardening: Three Ways to Prune Rhododendrons

And our guide to Azalea and Rhododendron Maintenance.

Courtesy of NYBG Plant Information Service