For almost 120 years, Hyde Manufacturing found that top-down management worked just fine. But in the late 1980s, when foreign competition began heating up, the Southbridge, Mass., manufacturer of hand tools and machine knives decided to shift to a team-based structure in order to become more flexible.

It wasn't easy, however, for the family-owned business, which had 1998 revenues of $40 million, to convince shop-floor supervisors that leadership no longer meant ordering people around. But, a new feedback system that gives employees the opportunity to review their team leaders has smoothed the transition. Hyde's human resources director, Dick Ayers, got the idea for this upward review system after doing some reading in the company's library and hearing a speaker at a conference.

Under the team-based organization, Hyde's shop floor supervisors had become "facilitators." Ayers knew they understood machines but not necessarily how to manage: "We had to convince them that it's important to address other areas, like how to motivate people." Because he wanted the upward review to be constructive, he decided not to tie the results to compensation.

Hyde started in November 1994 with a pilot program involving six teams ranging in size from five to 20 shop floor employees. Each team met with training manager Doug DeVries, who explained the exercise and the evaluation categories and handed out the one-page review questionnaires. Within half an hour, the reviewers had completed the forms. DeVries tallied the results, shredded the original forms to preserve anonymity, and scheduled meetings with the facilitators who had been reviewed, to discuss the results.

A second review, held in November 1995, involved almost all of Hyde's 308 employees. Shop-floor workers reviewed their facilitators. Those team leaders then rated their business-unit leaders, who in turn assessed the director of manufacturing operations. Ayers was reviewed by his subordinates, too. "None of us scored as well as we thought we would," he says. The big message from workers to bosses: "Be visible and be more involved."

Although team members welcomed the chance to give input, the exercise met with a mixed reception from the facilitators. Ayers estimates that 20% loved it, 20% loathed it, and the rest felt they could take it or leave it. Overall, however, the results have been positive. Hyde's reduction in voluntary turnover (12% in 1998, compared with 26% in 1989) is due in part to improved morale. Also, employee input has helped the company become more efficient.

After a number of workers reported that facilitators were difficult to reach in an emergency, the company stocked up on $300 two-way radios, one for each facilitator and one for each team. The investment produced a surprising additional payoff. Hyde runs emergency drills three times a year, and on a good day without radios the company could evacuate the plant in 10 minutes. Now, with the aid of the radios, everyone is out in three and a half minutes.

Ayers says the company, which repeated the upward review in 1997, found that the exercise also helped identify some ways in which the company needed to provide facilitators with better training. He thinks that Hyde will do the upward review again, but he also thinks it's important to allow ample time between reviews. Some employees find the upward reviews unsettling, and it takes time for real changes to occur. "It's not something you do every year," he concludes.