The bigger your company grows, the harder it is to tell how employees feel about their jobs. "It's frustrating," says Lacy Edwards, president and chief executive of XA Systems Corp., a $13-million software maker in Los Gatos, Calif. "You just lose contact with people." To help his top executives and himself stay in touch with the rest of the company, Edwards inaugurated annual "skip-level" interviews.

Once a year, employees have a one-on-one conversation with their boss's boss. "How's your job going?" they are asked. "What can we do to make things better?"

"It gives you a legitimate opportunity to explore without going around somebody," says Edwards, who interviews everyone who reports to his six vice-presidents. He has also discovered people who would be perfect for jobs elsewhere in the company. "It's a chance to get to know them a little," Edwards observes. "In a different environment, the interviews could be used to air dirty laundry. But the people here have confidence that they are doing a good job."