[This is geared toward in-person workshops, but much is applicable on-line (e.g., starting here).]
In an ideal world for writers, there shouldn't be a need for workshops. The only real justification for a writers' workshop is that it acts as a sounding board for new work; this, in spite of the often-voiced truisms that a writer is her (or his) own first line of criticism, and that an editor's rejection or acceptance is the only critical comment that counts. Both assertions are valid--up to a point.
A writer SHOULD be her own best critic. The problem is that most writers have blind spots about their own work. This revolves around a writer's distance from the story. Writing stories (I'm told) is something like having children. After all the discomfort and pain of the process, there's a warm, happy aura about having the finished product. The glow tends to make one think that the story (or the child) is just about perfect--and the parent-writer doesn't notice (or at least doesn't pay much attention to) the second head or the third arm. The cold, objective distance that enables a writer to appraise a story with some sense of reality comes with time. That time varies from writer to writer. Some of us can rationally analyze the construction of our own stories in a matter of minutes or hours after the piece is finished. Most of us take days or weeks, or even months to gain some objectivity. A few of us NEVER attain a critical distance. The workshop helps us compensate by providing an admittedly varied, but still reasonably objective set of critical eyes and minds.
As for the second observation, yes, an editor's reaction to a story does indeed bear quite a lot of importance. For that reason, it is imperative that a story be made as good as possible before it's sent off to market. A good workshop can help the critical process of rewriting and fine-tuning.
That's all theory. Here's the practice.
The Colorado Springs and Denver Writers' Workshops are only two of thousands of writing workshops held each year. Each workshop has its own personality and formula. This workshop is conducted the way it is, not out of dogma or any particular philosophy of writing, but because its format seems to work for the writers who take part. When we feel we're (or our writing is) getting nothing out of the workshop, then we'll alter the equations.
The workshop starts long before the day of the meeting. The procedure by which material to be critiqued is distributed to all the workshop members is described elsewhere. The point is that everyone should have had an opportunity to read each piece to be workshopped one or more times before the meeting. When time allows, it's a good idea to read the story, let a night's sleep intervene, and then read the story again. Take as many notes as necessary to begin formulating a critique.
One is not required to have a neat, reasoned, term paper sort of critique in hand for the workshop; but a good set of notes or an outline ARE both necessary and invaluable for delivering criticism. Also, the writer whose story is being critiqued appreciates getting your written notes--and those notes help when the writer sits down to work on a rewrite of the story.
We've discovered that critics function better when given time to read a story privately and at leisure. Having a group critique a piece immediately after hearing it read aloud at a workshop tends to be unsatisfactory in the extreme--people need time to consider and define their reactions. Once you've read the story and taken notes, pass it expeditiously to the next person on the routing list. Ideally, each person on the list should be able to keep the story for several days--but keep track of how many people need to read that particular story after you.
At the workshop, the writer chairing the meeting determines who in the circle of members will start the critiquing, and then tries to keep the sequence moving along. The format is a round robin, in which each workshopper speaks in turn. There are two primary rules: 1) There will be no physical violence in the workshop, no matter what a critique contains. 2) The person whose work is being critiqued must remain utterly silent until everyone else has finished speaking. This is for the sake of efficiency.
It's highly recommended that, if your work is on the griddle, you take copious notes on what everyone says. Then, when it's finally your turn, you can answer informational questions, make explanations, defend yourself, put forth rebuttals, or tell everyone else that they're shallow, insensitive, illiterate, nerdish creeps.
What sort of criticism should you offer when it's your turn to dissect someone's work? There are any number of approaches. For example, it's valuable to both mention "nits" and matters of more substance. With the former, you're noting small things such as spelling errors, punctuation fluffs, minor mistakes in word usage, etc. Generally it's advisable to hand the target a list of these without wasting time in the critique.
Then there are matters of story logic ("But how can you have the protagonist, who is set up as being one-armed, steepling his fingers in the last scene?"). There are more standard and wide- ranging approaches: Do the events that make up the plot hang together? Does the story have some sort of internal logic and consistency? Are the characters fleshed-out, convincing, three- dimensional? Does the style mask the content? Does the story immediately engage the reader's interest, or does it not really start until page 3? Is the story over-written--are there twice as many words in the story as the writer rally needs for effective- ness? Is the story focused to a point--or does it wander around the landscape toward no particular destination? These are only a FEW of the questions a workshop critic might ask.
Though criticism can be either positive or negative, it should always be constructive. That is, positive criticism may involve picking out elements of a story that WORK. This is a form of positive reinforcement--pointing out to a writer what works well and trying to suggest WHY it works. Negative criticism predicates pointing out what DOESN'T WORK in a story-- and attempting to explain why it fails. This is a form of negative ("Don't do that again.") reinforcement.
Feel free to say anything, negative or positive, that you believe has a bearing on the work. But always try to have some underpinning for your assertion. It's easy to say "I loved the story" or "I hated the story." It's harder, but infinitely more valuable to the writer whose story's being critiqued, to say "I loved the story and think it works because..." or "I disliked the story because..." And then go on to support your reactions or assertions. I think perhaps 5% of the time we may have gut reactions we can never explain, no matter how much self-searching we do. But the rest of the time, though it may take some intellectual work, we can finally analyze our particular reactions to a piece of writing.
Try not to worry about calling a turkey a turkey. Everyone knows you're critiquing the work, not the writer. Invert that and keep it in mind when your work is being criticized. Remember that you're here to obtain honest reactions to your work and to improve yourself as a writer--not to collect empty ego strokes.
You will learn a sense of discrimination about criticism of your work. Some workshoppers will say sensible things about your work that you should consider carefully. Others will be completely off-base. Listen to everyone carefully; eventually you will learn which criticisms to take to heart, and which to discard.
A prime benefit of regularly analyzing and critiquing others' writing is that you will hone your own faculty for criticizing your own work. This can only help when you are no longer part of a workshop.
As I indicated earlier, the philosophical tack on which you should approach the workshop is that the workshop is only a tool, not some kind of final aesthetic judge or god. In a sense, it's a tool in the same category as your typewriter and dictionary. As with typewriter and dictionary, though, it's an aid which, properly used, can telescope the diagnosis and cure of some of your problems as a writer from perhaps years down to months.
Considering that most of us have many more ideas for things to write about than we can ever get to in a lifetime, that's worth serious thought.