Suggestion systems are a form of employee-to-management communication that benefit employees as well as employers. They provide a two-way channel of communication between employees and management, with management accepting or rejecting employee suggestions and in some cases commenting on them. Suggestion systems give employees a voice and a role in determining company policies and operating procedures.

Employee suggestions can help increase efficiency, eliminate waste, improve safety, and improve the quality of a company's products and services. The company benefits not only in terms of cost savings realized as a result of employee suggestions, but also in terms of better employee morale. In many cases suggestion systems can help develop teamwork among employees. While the goal of a suggestion system is for cost savings to exceed expenses associated with the program, there are also intangible benefits to be realized from suggestion systems.

One of the first suggestion systems was started at General Electric in 1906. It consisted of a suggestion box in each department with a pad of blank paper on which employees were instructed to write practical suggestions for improving the company's manufacturing and other operations. The system was put into place only after an employee was fired for developing and proposing an idea for improving a manufacturing operation. Today, suggestion systems are common not only in manufacturing companies, but in businesses of all sizes and types.

A successful suggestion system must be promoted to the company's employees. Employees are typically given a handbook that explains the company's suggestion system. Such handbooks usually contain a statement of management support that encourages workers to "speak up" and make practical suggestions for improving operations. The handbook also spells out who is eligible for awards and what awards are given. In some companies certain levels of management are not eligible to receive awards for their suggestions. The handbook also defines what constitutes a suggestion, since some "suggestions" are simply considered part of doing one's job or routine maintenance and repair. Finally the handbook will usually contain one or more standardized forms on which suggestions can be submitted. Additional forms are usually made available in various ways to employees.

The administration of a suggestion system requires one or more plan administrators. A separate handbook may be prepared for company executives and supervisors, instructing them on their role in encouraging employees to participate in the suggestion system. In addition, each suggestion system requires certain individuals to be designated as suggestion evaluators. Usually the evaluator of a particular suggestion is someone with expertise in an area related to the suggestion. The evaluator's comments are then usually passed on to a committee that determines which suggestions will receive awards.

Suggestion systems typically provide some kind of reward to employees who have made suggestions that are adopted by the company. The rewards may be based on a percentage of cost savings realized as a result of the suggestion, or they may be a fixed amount with no relation to the savings involved. The awards may be given in cash or merchandise. The awards are usually heavily publicized within the company, and major awards are often publicized within the community. Such publicity serves as an incentive to other employees to come up with cost saving ideas and win awards on their own.

Suggestion systems may be continuous or conducted for a limited period. Some companies conduct annual suggestion contests that may last for a month. During that time, employees are encouraged to come up with as many suggestions as possible. In some cases employees may be divided into teams representing individual departments. Such teams compete against each other and try to produce the most suggestions. Prizes are then awarded to the teams making the most suggestions that can be used by the company. In the case of continuous suggestion systems, periodic contests can be used to stimulate employee interest in the existing program.

Businesses recognize that their employees' knowledge and ideas represent a valuable resource. Suggestion systems are one way to tap this resource. They are most effective as part of a broader work environment that encourages systematic participation by employees in problem solving and decision making.

SEE ALSO : Employee Motivation

[ David P. Bianco ]


Allnoch, Allen. "Closing the Participation Gap." IIE Solutions, November 1997, 6.

Bell, Robert F. "Constructing an Effective Suggestion System." IIE Solutions, February 1997, 22.

Darragh-Jeromos, Peggy. "A Suggestion System that Works for You." Supervision, November 1996, 6.

Teitelbaum, Richard. "How to Harness Gray Matter." Fortune, 9 June 1997, 168.

Waxler, Caroline. "The Million-Dollar Suggestion Box." Forbes, 7 September 1998, 171.

User Contributions:

Comment about this article, ask questions, or add new information about this topic: