An informal employee-grievance policy isn't good enough for American Steel & Wire Corp., in Cuyahoga Heights, Ohio. At this 540-employee business, compensation, promotion, and termination beefs are taken to an employee council that reviews managers' decisions. "We wanted a formal way to resolve issues with employees that would be objective and give them confidence in the management team here," says CEO Tom Tyrrell.

Termination disputes can go directly to the council, but employees must work through a chain of management command for all other grievances. From a pool of employee volunteers trained in arbitration, the complainant blindly chooses nine names and then picks the six employees and one manager who will hear his case. Since June 1988 the council has heard 30 cases. About 50% of the judgments have upheld the manager's original decision.