The term "employee suggestion systems" refers to a variety of efforts businesses make to solicit and utilize input from their employees in hopes of achieving cost savings or improving product quality, workplace efficiency, customer service, or working conditions. These efforts range from simply placing suggestion boxes in common areas to implementing formal programs with committees to review ideas and rewards for those that are adopted. The ideas generated can range from simple quality of work life improvements, like putting a refrigerator in the coffee room, to larger streamlining issues that can save the company thousands of dollars per year, like switching all salespeople's cellular phones from individual contracts to a group contract with a discount vendor. "Suggestion programs create a win-win situation," Kate Walter wrote in HR Magazine. "More involvement and input for employees and improved efficiency and cost-savings for employers."
According to a study conducted by the Employee Involvement Association and reported in Industry Week, companies can expect to save nearly $350 annually per employee by implementing a suggestion system. "Companies that set up effective suggestion systems are finding that employees have great ideas that can lower costs, increase revenues, improve efficiency, or produce greater quality," said Charles Martin, author of Employee Suggestion Systems: Boosting Productivity and Profits. "Employees work together better as a team and often submit ideas as a team. And they begin to think more like managers, looking beyond the scope of their own jobs." Despite these potential advantages, however, a 1997 survey of American manufacturers found that these companies solicited an average of one-half a suggestion per employee per year, compared to an average of nine suggestions per employee per year in Japanese industry.
Some companies assume that since they cultivate an open relationship between employees and management, ideas for improvements will surface informally, without explicit prompting. But experts note that formal suggestion systems encourage employees to really think about their jobs and want to participate in the operation of the company. Formal suggestion systems let employees know that their ideas are valued. Such systems may even increase motivation and foster loyalty and teamwork among employees. And these benefits come in addition to the positive impact employee suggestion systems can have on a company's bottom line. "Generating ideas from employees should be one of the top priorities of any business because the very next idea you get may save you $10,000 or make you $100,000," consultant Jim Collison told Dale K. DuPont in an article for HR Magazine.
"The goal of a successful suggestion system is to tap the reservoir of ideas and creative thinking of all employees for the improvement of the working process and products," Robert F. Bell wrote in IIE Solutions. "To do so requires proper understanding by everyone of the process, management support of the system, encouragement and meaningful rewards, and a structure to make sure nothing falls through the cracks." The elements of a successful employee suggestion system can be divided into four main areas: management support, program structure, program visibility and promotion, and recognition and rewards.
MANAGEMENT SUPPORT The first element of a successful employee suggestion system is to demonstrate buy-in from top management. Managers must show enthusiasm and commitment toward the program if it is to generate the desired results. A small business owner might begin by sharing his or her vision for the company with employees. Employees who understand the company's overall mission are more likely to submit valuable ideas that will help the company achieve its goals. The next step might be to make sure line managers support the suggestion system and do not feel threatened by it. It is also important for managers to raise the topic frequently in meetings and incorporate the positive results of employee suggestions into periodic progress reports. Managers should also be encouraged to submit suggestions themselves, although they should not generally be rewarded for ideas that fall under their normal strategic planning responsibilities.
PROGRAM STRUCTURE The next element of a successful employee suggestion system is structure. Experts recommend placing responsibility for program development and implementation with a single administrator. This person should begin by selecting a committee of employees—from all parts of the organization and representing various demographic groups—to help administer various phases. The administrator and employee committee should then develop clear rules to guide employee efforts in providing suggestions. Suggestion programs tend to be more successful when employees are encouraged to make reasonable suggestions within the parameters of their own work experience. "The real goal is to generate as many ideas as possible, and, over time, to improve the quality of the suggestions through feedback and encouragement," Bell noted. It is important to develop a clear policy statement that covers all aspects of the suggestion program and make sure that both managers and employees understand it. If employees view the process as open and above-board, it will help eliminate any suspicion about how ideas are reviewed and rewarded.
PROGRAM VISIBILITY Another important element of successful employee suggestion programs is visibility. After all, employees cannot be expected to participate in a program if they are not made aware of it. Experts recommend launching suggestion programs in a highly public manner, with announcements, newsletters, parties, etc. Employees should come away with the idea that management intends to give full consideration to all suggestions and plans to act on the best ones in a timely manner. The suggestion system itself should also be widely publicized and promoted. Examples of possible systems include the familiar suggestion box with written forms; the old-fashioned bulletin board for posting ideas and results; a special toll-free telephone line to allow employees to phone in suggestions; or more sophisticated systems based on e-mail or postings to a dedicated Web site. Once the system has been introduced, it is important to follow up with ongoing promotional activities in order to maintain employee interest.
RECOGNITION AND REWARDS Another vital element of successful employee suggestion systems is recognizing participants and providing rewards for good ideas. Employees are much more likely to participate in a suggestion program if the ideas they submit receive quick and thoughtful responses from management. Experts recommend setting a timetable in which receipt of an idea will be acknowledged (ranging from 24 hours with electronic systems to one week with more traditional systems). Then employees should be notified within 30 days whether or not their ideas will be adopted. Even in cases where an idea is not used, the employee who submitted it should be thanked for his or her participation in the program. It may be helpful to provide a small, tangible reward for employees who submit an idea to the suggestion system for the first time, such as a T-shirt, pen, or umbrella.
To ensure the success of a suggestion system, it is also important to publicize the suggestions used and their positive impact on the company. One way to do this might be to hold an annual dinner honoring the people who made suggestions over the course of the year. Many companies also establish reward systems for employee ideas that lead to cost savings or process improvements. For example, some companies distribute a fraction of all the savings provided by the employee suggestion system as part of their annual profit sharing programs. Experts acknowledge that it can be complicated to develop an appropriate reward system that recognizes valuable employee contributions without creating jealousy and resentment among fellow employees. Some suggest that this task might best be delegated to an employee advisory committee. The key is to evaluate ideas based on factors like innovation and ingenuity as well as monetary value when establishing rewards.
"In some companies employees send a flood of useful ideas to upper management. In others the bottoms of suggestion boxes are coated with dust," wrote a contributor to Executive Female. "What's the difference? It's not the quality of the employees but the quality of leadership they receive." There are a number of reasons that suggestion systems might fail to generate a positive response among employees. In his article for IIE Solutions, Bell outlined several common problems companies experience in implementing and administering suggestion systems.
For example, employees may feel reluctant to offer suggestions if they believe that management is not truly interested in their ideas. If the company issues only a lukewarm invitation for suggestions or creates an atmosphere that might be perceived as intimidating, then employee suggestions are unlikely to be forthcoming. The company would probably experience similar problems in eliciting suggestions if management was unclear about who was invited to participate in the program or placed too many strict rules on participation.
Other common problems with employee suggestion systems involve management's response to suggestions. Employees are unlikely to participate in the program if they experience a slow response, or no response, to their suggestions. A suggestion system will also fail if there is no clear explanation of the acceptance or rejection of suggestions, or if employees perceive that management is making biased judgements about which suggestions to approve. Finally, suggestion systems tend to create problems for an organization when the rewards offered for good ideas are inconsistent or unpredictable.
Bell, Robert F. "Constructing an Effective Suggestion System." IIE Solutions. February 1997.
Dempsey, Mary. "Power of Suggestions." Crain's Detroit Business. March 6, 1995.
DuPont, Dale K. "Eureka! Tools for Encouraging Employee Suggestions." HR Magazine. September 1999.
Love, Thomas. "Back to the Old Suggestion Box." Nation's Business. May 1998.
Martin, Charles. Employee Suggestion Systems: Boosting Productivity and Profits. Crisp Publications, 1997.
O'Brien, Joseph D. "Throw Out Your Suggestion Box." Supervisory Management. November 1994.
"Return of the Suggestion Box." Industry Week. January 19, 1998.
"Six Ways to Get Great Ideas from Employees." Executive Female. March-April 1996.
Walter, Kate. "Employee Ideas Make Money." HR Magazine. April 1996.