November 11, 2003

IN THE LEAD By CAROL HYMOWITZ

Managers See Feedback
From Their Staffers
As the Most Valuable

Lydia Whitefield, vice president of corporate marketing at Avaya, has received dozens of performance reviews from dozens of bosses during her 10-year career in telecommunications. But the one review she never forgot, the one that pushed her to alter her management style, came from an employee.

"He told me, 'You're angry a lot,' " says Ms. Whitefield. "I was stunned, because what he and other employees saw as anger, I saw as my passion." She subsequently learned to be more contained when discussing assignments with staff and to avoid reacting vehemently.

"That feedback was a life-altering experience for me," says Ms. Whitefield, who currently supervises about 75 people. She believes in the need for appraisals by employees of their bosses. "They can sting, but they are always instructive," she says.

In this season of annual performance appraisals, managers who want candid feedback on how well they motivate, inspire and communicate with others, and set and meet goals, are turning to employees.

The so-called 360-degree performance review implemented at many companies formalizes this practice by requiring bosses, peers and employees to review one another. The peer reviews have been controversial, with employees saying they often are unfairly targeted by rivals. Employees tend to be more thoughtful and fair when assessing their bosses, especially where the bosses are open to constructive criticism. Still, staffers usually submit their appraisals anonymously so they don't have to worry about retribution.

Even where companies haven't formalized upward reviews, some managers seek employee feedback on their own, aware that their subordinates see their strengths and weaknesses up close every day.

For Vic Tanon, chief executive of Emplicity, an Irvine, Calif., company that does human-resources work for small businesses, the employee feedback he received last year during a 360-degree review felt like egg on his face. His employees expressed anger that he kept his office door closed a lot of the time, contributing to the same kind of staff turnover that the clients he was supposed to be helping were experiencing.

Mr. Tanon faced the complaints squarely. "I dropped my ego and admitted publicly that I'd been hard to get hold of because I was so focused on selling our services to clients," he says. He stopped closing his office door and posted a written announcement stating that although he might be busy at times, he wanted to be available to his 30-person staff.

He began going out to lunch with each of his seven direct reports and encouraged them to take their subordinates to lunch. He also set clearer job expectations and goals for employees, who had complained they lacked direction. "Typically, employees leave bosses, as opposed to jobs," he says. In the six months that he has been responding to staff criticisms, turnover at Emplicity has decreased by more than 30%, he adds.

It takes time to create an open workplace atmosphere where employees feel free to state their views. Robert Fair, vice president of corporate marketing at NCR's Teradata division, is accustomed to 360-degree reviews at his Dayton, Ohio, company. But he has been in his current job for only six months and doesn't think the 160 people who report to him are familiar enough yet with his management style.

"They don't understand my rhythm enough and aren't comfortable enough to say 'this is working and this isn't,' " says Mr. Fair. He thinks he needs to be on the job for at least a year. Meanwhile, he tries to elicit feedback at lunches with small groups of five to 12 employees.

Employees seem most candid when they meet informally with their bosses, away from the office. David Moorcroft, senior vice president of corporate communications at Royal Bank of Canada in Toronto, says he gets frank feedback at the "whining" sessions he holds every few Friday evenings at a bar near the bank. "The idea is that you aren't supposed to whine without a glass of wine in your hand," says Mr. Moorcroft, whose department has 35 employees. "We use it as a chance to talk about what has been bugging us so tensions don't build up."

Employees have told him "to lighten up about a project," he says. He also has been encouraged to walk around the office more and make himself accessible to staff. "We tease each other, and there is less resistance to hearing criticism in this kind of casual atmosphere," he says.

Not all executives adapt the changes their subordinates recommend. Mendo Akdag, chief executive of PetMed Express, the Pompano Beach, Fla., online and phone pet pharmacy, last year received low performance scores from his 13-member management committee on the category "sets aggressive goals, rewards progress."

The group complained that his earnings goals were too aggressive and that in some cases they hadn't received adequate bonuses. "I told them that it's my job to push them and stretch them to the next level," he says.

But Mr. Akdag did agree to be more specific in the future about bonus levels and who was eligible for what. "Hopefully, I clarified expectations," he says.

Updated November 11, 2003