This exercise the deltoids and traps as well as surrounding muscles.
Steps
Before you start the smith machine upright row you need to set up the smith machine properly. Lock the bar so that it's inline with the middle of your thighs. Set the safety stoppers to this level.
Start by standing in front of the bar with your feet shoulder width apart. Keep your abs tight. Grip the bar with an over handed grip, with your hands shoulder width apart. Slowly raise the bar towards your chin. Focus on contracting your traps so that the upwards force comes from this muscle group. Raise the bar until it is just above your collar bone. Hold this position for a moment.
Next, begin to slowly lower the bar to its original position.
Tips
Try not to rest the bar on the safety stoppers at the bottom of this exercise. You should stop the bar just above the stoppers.
Keep your body and your wrists straight. Be sure to engage your delts to make sure your traps aren't over trained. They are strong and have a tendency to kick in to help weaker muscles. Also, make sure to keep a shoulder width grip since the rotation needed for a close grip could cause injury.