Employee suggestions can be worth tens, even hundreds of thousands of pounds to some organisations, while at the other end of the scale, some suggestion schemes fail to engage staff and are ultimately abolished.
Ideas UK, which provides support and inspiration to businesses looking to create formal suggestion schemes, estimates that in 2002-03, its members delivered some £300m in savings as a result of staff suggestions. But simply having a suggestion scheme in place is not necessarily enough. Fostering an environment where ideas are recognised, incentivised and followed through, and communicating that effectively, means a greater chance of success.
Why have a suggestion scheme?
Employers see improvements in staff morale and motivation as the most important benefit to their own organisation, but the positives don’t stop there. Organisations can also reap financial benefits from cost savings, higher sales and improved profits if a suggestion proves fruitful.
Although most suggestion schemes offer cash or a gift as a reward for good ideas, employers believe that staff actually place more value on the recognition they receive for their efforts.
Employers usually have a number of objectives in mind for suggestion schemes, some dealing with improvements in processes or employee relations, and others related to hard-measure outcomes. A common aim is to achieve greater employee involvement.
The most significant problems arise when staff simply fail to put forward ideas, or come up with suggestions that cannot be implemented – a problem many organisations try to address with more and better communications.
Brand your scheme
According to research by Personnel Today’s sister publication IRS Employment Review, a number of companies have chosen to enhance the way they communicate their suggestion schemes by branding them. Sainsbury’s, for example, runs a ‘Tell Justin’ scheme, where staff can e-mail the supermarket chain’s chief executive Justin King. This has received some 7,000 responses to date.
Publicity is essential if a suggestion scheme is to thrive. Without constant promotion, any initiative of this sort can soon be forgotten.
Having won the attention of staff, and encouraged them to come forward with ideas, organisations need to provide some means by which suggestions can be made.
Although some people have a negative view of the old-style suggestion box, IRS’ findings suggest that this tried, tested and straightforward method is still in widespread use. Some send their ideas direct to a scheme administrator, while others feed them through their line manager.
Ideas can be put in writing or submitted via e-mail or the corporate intranet. An easy option is to invite verbal suggestions, although these are harder to capture.
Hold on to ideas
An often-identified failing of suggestion schemes is that they become a black hole into which ideas are fed and are never heard of again. A number of organisations have tried to overcome this by setting time limits for each stage of the decision-making process.
Reward employees’ suggestions
The benefits employers potentially derive from a suggestion scheme are obvious. But what – other than a warm feeling at having done someone a good turn – do employees get out of it? Some organisations only choose to reward suggestions that are actually implemented, while others reward all suggestions put forward.
The nature of these rewards varies. A common incentive is gift vouchers or cash. A number of companies ensure that those who put forward good ideas get recognition within the organisation, for example, in company newsletters.
It is worth asking at this point what motivates employees to participate in a suggestion scheme. Most employers feel that recognition is a more important motivator than a monetary award or gift, and that saving the organisation money is thought to be the least of employees’ concerns.
How the employer benefits
Employers expect to gain both tangible and intangible benefits through operating suggestion schemes. At one measurable end of the spectrum are savings in costs and improvements in sales or profits; at the other, is a greater sense of employee involvement and higher levels of morale.
Most of the benefits, of course, should come not from the mere fact of operating a suggestion scheme, but from implementing the ideas put forward by employees. By far the most common benefit for employers of doing this is the improvement it brings to staff motivation and morale, but process and product improvements can prove highly valuable. Theme park Chessington World of Adventures, for example, estimates that staff suggestions are worth £50,000 a year to the company.
The most common problems organisations encounter with suggestion schemes are too few useable suggestions, or finding that running a scheme is too expensive or time-consuming.
One of the ways to overcome these challenges is to raise the profile of the scheme – for example, by publicising it in new employee induction packs. It may even be necessary to rebrand the whole scheme. Once these hurdles have been surmounted, it’s simply a case of finding the budget, the skills and the time to put all those fantastic ideas into practice.
- Pfizer: A tool redesign saved the pharmaceutical company £70,000 a year.
- Center Parcs: Achieved £300,000 in savings by implementing energy efficiency measures suggested by staff.
- Siemens Standard Drives: Centralising the scanning of serial numbers saved more than £6,000 a year. The company’s overall suggestion scheme, which generates 4,000 ideas, saves the company about £750,000 a year.
- Ireland Electricity Powerteam: A design for an earth mat at the base of poles carrying high voltage lines was a potential life-saver.
Mark Crail is managing editor of Personnel Today’s sister publication IRS Employment Review. He has held a variety of senior roles on management magazines, and previously edited a monthly journal and other publications for a national trade union. For more information, visit www.irser.co.uk.
Tell us some trade secrets…
If you would like to share your wisdom on HR issues, e-mail firstname.lastname@example.org