Who better appreciates the quality of your work: your supervisor or the folks who toil beside you all day long? Bosses rarely win that contest. Yet they're usually the ones charged with assessing workers' performance.

Not at YSI, a Yellow Springs, Ohio, instrumentation maker. As part of a bottom-to-top revamping of its corporate structure and philosophy, $28-million YSI is instituting twice-a-year peer reviews in all work centers in its production area. The appraisals are the most important feedback an employee gets. Leaders -- previously known as supervisors -- may be asked to grade an individual, too, but their input holds no more weight than any other team member's.

Peer appraisals are part of a management trend toward empowering workers. At YSI, it seems to be working. Lynn Livesay, a glassblower who's worked there for 14 years, says: "What we say means something. Years ago you could go and complain, and nothing was done about it."

Still, it's hard to rub elbows all day long with someone you've criticized the day before. Here are some tips from YSI employees on how to make peer appraisals work:

* Construct logical peer groups. Whether or not your company is organized around teams, take care that every member of a peer group relies on the other members to achieve a goal. A colleague's appraisal won't be meaningful if she doesn't really care how well another member of the group does his job.

* Encourage interchangeable jobs. Employees in YSI's work centers cross-train themselves to be able to handle any one of several jobs a team must execute. "Everyone is conversant with the same things, so you've got a really accurate view of other people's work," explains Ryan Dimmick, who assembles electronic temperature compensators.

* Go slow. Workers who are used to top-down appraisals mistrust this kind of initiative. "It was a mess when it first started here," says Livesay. One step to take in preparation for peer reviews: first introduce group appraisals to get people to compare their work with others' performance.

* Give workers the tools to succeed. YSI has applied liberal doses of training in interpersonal skills and problem solving to acclimate production workers to their new duties. The goal is for peer appraisal to become a continual process, not just a twice-a-year exercise.

* Let workers control the consequences. Give teams the power to hire and fire coworkers. It won't be taken lightly. Glassblower Livesay says morale plunged in her work center when it became clear that one of their two hires was not working out. But after taking every step possible to help the new member improve, the team knew they couldn't tolerate her performance -- or pass the buck. "We didn't want her to go into another department. You can't do that to someone else," Livesay explains.

* Know when to give up. Not everyone is going to adjust to peer appraisal and its implicit doctrine: self-management. For months one work center focused on a member who was very uncomfortable about not being told what to do. "It took so much energy that we were beginning to lose our edge on the work itself," recalls one of the center's workers. The team member is going to get a new job in a more structured part of the company. -- Ellyn E. Spragins