For workgroup users (ie those without a domain controller), it is done by sharing
each appointment;
- create or open an appointment
- click the Attendee Availability tab
- at the lower left, click Invite Others
- enter the name of the Contact and click find
- when selected, click Required or Optional
- repeat for all attendees
- when done, click OK
- as each Contact receives the appointment by email, they accept or decline the schedule
- their calendar and yours are updated
- and the status of all can be seen using the radio button Show Attendee Status