Rule Number One: The boss is always right. Rule Number Two: If the boss is wrong, see Rule Number One.

Fortunately this traditional approach to organisational life is beginning to fade, as practices like upward appraisal start to take off across industry.

Upward appraisal is a system which encourages employees to evaluate their managers' performance. Simple and democratic though it may be, this increasingly popular practice could put the fear of God into some managers.

Such systems are based upon the central premise that if we are to learn and develop, feedback is essential. Thus the main reason for introducing upward appraisal is that managers must also learn and develop.

Managers today are expected to know more, do more, handle more complex information, be more skilful, delegate effectively and take more decisions. Yet without appropriate feedback it is difficult to judge, monitor and develop one's performance.

The process also plays a crucial role in employee empowerment. For some, the prospect of a life sentence reporting to an anti-Christ is enough to precipitate a premature end. With upward appraisal there is at least an outlet for alerting managers to their own weaknesses.

Up to now, the only means for managers of getting feedback on their performance was through an appraisal with their own boss. For a variety of reasons, including the fact that such appraisal feedback can affect pay, promotion and development decisions, this has not always been as frank as it should be.

Those most influenced by managers' behaviour, however, are the staff. So they should be asked how their manager can improve. Where the system is properly managed, honest - and invaluable - feedback can be unearthed.

Irish-based organisations such as Intel, First Active, Microsoft, Irish Life, IBM, Bank of Ireland and AIB are all reputed to have experimented with the practice.

Organisations in Britain that have gone down this road read like a Who's Who? of prominent employers.

So advanced is the practice in the US, that three-quarters of the Fortune Top 500 companies now use 360-degree feedback.

Here it aims to facilitate the development of managers, and allows them to compare their own perceptions of their skills, abilities and working styles with the views of their peers, managers, staff and even customers.

This is how the system works at IBM (Ireland), as Robert Poynton, management development manager, explains: "Our 360-degree feedback system gets staff to contribute, as well as internal and external customers and work colleagues, in Ireland and abroad. We are driven by customer satisfaction, so by including external and internal customers in the appraisal process employees can avail of valuable, constructive feedback."

In some organisations managers are encouraged to ask colleagues point blank what they think of them. But it is not unknown for the incompetent manager to pose the question: Right Jane, before we discuss your promotion and pay rise prospects, what do you think of me?

As staff fear reprisals for honestly answering the question, most organisations now opt for a system which guarantees respondent anonymity. That is, they use a confidential questionnaire which asks respondents to rate their boss on a range of different competencies. The questionnaires are then sent to an independent third party, who processes the results and feeds them back to the manager.

In any upward appraisal scenario it is crucial that all affected parties know the ground rules in advance: what information is being sought and in what form, how the data will be collected, what the data will be used for, whether observers and respondents will be anonymous, whether its compulsory or voluntary, whether its regular or once-off and how the results will be fed back.

To satisfactorily address these important questions, organisations find it profitable to adopt the 3 I approach to the design of their system: Involve, Inform and Invest.

To involve, one considers how managers and their staff can contribute to the design and monitoring of the system. For example, staff are not well enough positioned to comment on all aspects of their managers' performance. Managers will have views on this and they must be recognised, especially if one expects them to accept feedback in a constructive way.

To inform, one ensures everyone knows what will happen, what they have to do and what the end-product of the process will be.

To invest, one requires a resource commitment of people, time and money. The absence of this commitment dooms the initiative, clearly indicating top management's real position. For example, where top management really support the practice, they will be top of the queue for feedback from the process, and genuinely support the necessary allocation of resources required to make it happen.

A major advantage of upward appraisal is that several employees are involved in giving the feedback. Hence the average rating is likely to be more reliable than an appraisal from any single source.

For example, with traditional downward appraisals feedback is often more a reflection on the appraiser's disposition than on the appraisee's performance. But if 10 people tell you that you've an aggressive and demotivating manner, its hard to put this down to the bias of one manager.

Against this however, due to the number of personnel involved, it can be a time-consuming and costly process. Furthermore managers may feel defensive about receiving assessments from this source.

Though the additional feedback makes the appraisal a better process, it certainly does not make it easier. As Jack Welch, chief executive of General Electrics, says: "These are the roughest evaluations you can get, because people hear things about themselves they've never heard before."

In conclusion, upward appraisal could be one of the most exciting developments in the field of People Management over the next decade. But it should not be adopted lightly since it requires openness, the ability to consider the views of others and a significant degree of trust in the organisation.

If these dimensions fit your organisation, then the practice has merit. If they do not, then your organisation needs upward appraisal. But without the 3Is it would probably be easier to raise the Titanic.

Dr Gerard McMahon is a lecturer in human resource management at the Faculty of Business, Dublin Institute of Technology and the author of Performance Appraisal: Best Practice for Managers, Oak Tree Press, Dublin.