TO:            Marsha Martin, Accounting Manager
               Kent Van Noy, Marketing Manager
               Rebecca Etheridge, Finance Manager
               Shelby Fuller, Word Processing Manager
               Kari Hefner, Personnel Manager
               Cori Goodwin, Graphics Manager
               Christine Bennett, Public Relations Manager

FROM:          Edward G. Nolta, Vice President

DATE:          October 12, 2002


It’s almost time again for annual performance reviews, a process that you may not anticipate
eagerly. As we discussed last summer at our meeting, employees and managers often look upon
these conferences as a time to discuss all the things employees have done wrong during the past
year. With this approach to performance reviews, tension is high; and neither the managers nor
the employees feels good at the completion of the review. Further, the overall productivity of the
company seems to suffer, at least for a few weeks.

I have talked over with President Vermillion the concerns that were expressed at our summer
meeting. He recognizes that improvements need to be made to our performance appraisal
procedures. He feels so strongly about wanting to improve our review procedures that he has
agreed to bring in two or three outside consultants to work with us for two or three days.

The three consultants who I am considering bringing in are Dr. Mitch Carlson, Dr. Charlayne
Winger, and Mr. Roul Mikva. All three individuals have an extensive background in the area of
employee appraisals.

Dr. Carlson is the personnel director for a California-based firm, Integrated Technologies.
During his eight years at Integrated Technologies, the turnover rate has been cut in half—we all
know what that means in terms of training costs. He has also given numerous workshops
throughout the United States and Canada.

Dr. Winger is a management professor at Brickley State University. She is the author of several
articles dealing with employee motivation and evaluation in some of the leading management
journals. She also has conducted a number of seminars.
Page 2
October 12, 2002

Mr. Mikva has international experience in the area of employee evaluation. He completed
graduate work on the topic at a university in England. He has done consulting work in Germany,
Japan, and Mexico. He should be able to offer an international perspective.

I believe the time that these individuals spend with us will be most productive. Plans call for
each of the three consultants to make a short lecture-type presentation. This will be followed by a
videotape presentation illustrating positive and negative performance appraisals. Time is also
being set aside for a discussion with the consultants on the problems encountered in performance
appraisals. Finally, we plan to have a videotaped role-playing session that will be critiqued and
discussed by the consultants.

The consultants will be with us on November 3 and 4. Please arrange to have your schedule free
on both days.


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