Meek came up with the back-and-forth format for Active's "employee development meetings," as the $15 million underground-utility company calls its performance reviews. The appraisals concentrate on behavior related to customer satisfaction, job proficiency, and working with others. As a result of Meek's own rating from company president Walter Smith, one personal goal this year is to meet more with her people--and specifically to talk every day with all five of her immediate subordinates. "We accountants tend to put on our green visors and stay in our offices," she says. When it comes to developing good communication skills, "I have to make myself do it."

Northern Telecom Ltd., the $12.8 billion Brampton, Ontario, digital networking company, takes the two-way philosophy to extremes. CFO Wes Scott drafts two or more pages of goals each January and goes over them with CEO Jean Monty. Then in July, Scott submits a written evaluation of his own work, which Monty uses to provide his feedback. The next January, the results are shared with the board, something done by fewer than 30 percent of the firms in the CFO survey that hold regular performance reviews. An "individual performance factor"--a multiplier grade that's part of Scott's review- -determines his share of the executive incentive-pay pool. About a third of the companies in our survey use numerical ratings, with an essay summary written by the CEO being the most popular form of documentation by far.

THE 360 APPROACH
Among formal performance reviews, the 360- degree appraisal is on the cutting edge. In the 360, CEOs solicit comments from the peers, subordinates, and others who work with executives--a process even more extreme than the one in use at Beckman Instruments. But while a recent William M. Mercer Inc. survey of general performance-review practices found 19 percent of firms reporting some use of the 360 review, CFO's own study indicates that such an approach is nowhere near that prevalent in evaluating chief financial officers.

At Eastman Chemical Co., CFO Virgil Stephens does get comments from the board, his finance staff, operations managers, and even institutional shareholders, as well as the $4.8 billion Kingsport, Tennessee, company's CEO, Earnest Deavenport. As it does at most 360-degree companies, the feedback stays separate from the appraisal of how Stephens is meeting his objectives--and from the setting of his pay. The bulk of his 360-degree feedback comes from a survey with four questions:

• What is it I do that you feel is especially well done?
• What am I doing that you wish I would quit doing?
• What would you like me to do more of?
• If you had one single piece of advice you could give me to improve my effectiveness, what would it be?

Deavenport, who himself has received regular reviews in each of his 37 years at the company, says that the Eastman Kodak tradition calls for them to be a valuable tool for career evaluation and development. (Eastman Chemical is a Kodak spin-off.) And even in evaluating senior executives, he says, it is never awkward for him, because "we all know the objective of these sessions is to develop a win-win situation."

Says Stephens, "The focus is on continuous improvement, and what each individual can do to improve his performance. It creates an opportunity for people to perform at higher levels than they could otherwise." Indeed, he adds, "every time I've participated in this type of evaluation, I've received new insight about my performance." The last one showed that Stephens, like Anne Meek at Active Construction, wasn't spending enough time with the staff. He now schedules lunch with each of the heads of his finance organization, sits in on meetings of finance quality-management teams, and blocks off time for simply walking around.

What of the firms that choose not to provide formal reviews of the CFO? William M. Mercer Midwest practice leader Ed Bancroft, who conducted Mercer's general survey of performance reviews, notes that CEOs of some large companies with no annual review policy still deliver like gangbusters on the bottom line.

Nonetheless, there's that aching need on the part of CFOs to hear some straight talk from the chief executive. In fact, of the executives in our survey that don't get reviewed regularly, more than half said that formal evaluations are a good idea.

One is Leslie Beekharry, CFO of Marjam Supply Co., a $100 million Bayshore, New York, wholesaler of building materials. Marjam has been growing at a healthy 15 percent a year, but Beekharry gets no review at all. "I really set my own goals," he says. Beekharry benefits, he says, from having a CEO who "has the same vision as I do." Their communication is so good, he says, that "we interact not so much as employer-employee, but as friends."

An ideal relationship? Perhaps, says Beekharry, except that he yearns for a formal evaluation. "Having a performance review," he says, "is like having a different set of eyes."

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