Employee Suggestion scheme awards

That would totally depend on your budget. I suppose a cash reward is the best, however, you would have to justify a real monetary savings for the company to do this, and pay out a percentage of this savings.

I always like the idea of awarding with payed time off, so they can spend an extra day off with their family. And that is really priceless to the worker.

I offer a warning:

I watched a program like this not only die, but degrade moral to the point of open contempt for any idea that comes from above the work-floor.

The piece of electronics had to go back to the manufacturer's factory for downloading and decoding to ensure the many sensors connected to it were correctly calibrated - a data logging function. Any error had to be corrected, and again the unit returned, downloaded, decoded and the results returned to the installer.

The savings for locally downloading the box were obvious - in time alone! In fact, the manufacturer charged a great deal for this service.

So an especially able technician under the cloak of an Employee Awards program cracked the box, figured out how to download it, figured out how to decode the data - and it was cryptic enough the manufacturer had never forbidden this activity.

The award program was supposed to pay out a portion of the savings. Turns out no one had noticed they were paying nearly 1 million annually for this service, because they billed it through to the customer.

The technician's manager, Director, and accounting all signed off that he was saving 100s of thousands annually, and the employee therefore was entitled to nearly 100 thousand dollars.

Upper management knew it wasn't actually a savings to them, and denied the claim. After he threatened to sue, they offered $5,000 to the now disgruntled employee.

They adopted the technique, saved the money, and in the eyes of the employees refused to pay up.

They didn't pull anything out of a Suggestion Box that could be printed for years.

Ensure the rules are VERY clear, AND that management buys in COMPLETELY before you go ahead.

Hello edignan,

Thank you for your warning.

I have seen employee suggestion scheme operating very successfully and for years. Actually I have been active member from engineering for suggestion evaluation. The case you have mentioned may be an example of a dishonest management.

I try to be always positive about such endavours.

What I am asking about is not opinion on suggestion schemes but sample procedure of reward calculation.

Anyways, thanks for your warning.

Kaka

I've seen similar situations. Be sure to have a maximum prize. Also have a fixed prize for suggestions which improve working conditions or have some other effect that cannot be turned into a monetary savings.

Hello KAKAGI,

Both Bricktop and edigman points are valid on my opinion, however if you are asking about procedures.

What about you start from creating a team consist of top management, manager, supervisor, labor union officer and employee and of course include yourself as facilatator as this is your idea. These group may then create a procedures on how to do "award calculation" from that procedure document it could be clearly stated as follows;

Objective, Scope, Definition of Terms, References, Policies and Environmental Health and Safety (EHS) Best Practices, Details, Relevant Information and Forms (if any).

You will then use the same team in validating points for every creative valid and constructive suggestion from the suggestion box collected at least once a week.

It is also very important that the procedures document is posted on bulletin board and besides the suggestion box and have the employees fully aware to encourage and contribute.

The criteria in getting points system must be part on the created Procedure to consider must be realistic, measurable, achievable and of course the impact of that suggested idea.

consider that for the success of your "Employee Suggestion Scheme" the top management commitment and full support is very essential otherwise you are just wasting time, effort and could becomes a frustration and may cause for employee demoralization.

Hope my small idea will fit on your requirement.

Kind regards

Roman

We have a suggestion scheme in which for a good idea some award is given (preevaluation award) and if it is implemented there are additional award as per the savings to company.

The shortfall in the scheme what we say the implementing agency have standard answers for rejecting the scheme as most of the people do not want to change

this is not a new idea.

the suggestion is too general.

To make the award system effective the suggester should be given freedom and facility to work on his idea and demonstrate its effectiveness after a preliminary study. Some ideas will help, some may not.

classic case of making xerox machine popular took lot of time.

preevaluation award will motivate people to continue to give suggestions.

narendra prasad

We had Kai zen system in our factory. Suggestion selection for award was done by a committee which would decide about giving award every month. At annual function awards were distributed to persons whose suggestions were selected. Award was sort of Shield. This system worked well for many years.

Hi Kakagi,

Actually, I have had some bad experiences with personal rewards. I used to be totally in favor of them, but later, I saw too many misuses of the intended good act.

[once at a large corporation, there was such a policy. On more than one occasion, I heard my colleagues receive a design from an engineer, knowing there was something that was 'a little wrong with it', but purposely postpone the 'correction' until after the production start just so they could 'claim' their prize for an improvement ... no matter the intent of the 'good deed', it seems the normal greed of human nature gets the best of the situation.]

More recently, I proposed a plan where there is recognition for the person making the suggestion, but reward to everyone. In this plan, the person making a suggestion of any kind, if the plan is implemented, and if there is a savings or gain as a result of the suggestion, the total financial gain for the first 12-months is given equally to everyone, and in a grand presentation, recognition is given to those responsible for the 'bonus' to everyone.

One of the problems of individual 'rewards' is that it doesn't focus on the real benefit, and that is a better organization. It is a huge problem in all sizes of companies that individuals have little regard for the total operation (sales, costs, cash flow, etc.), and unfortunately few companies do much to make the employees aware. For me, the closer everyone gets to realizing that the actions (or lack of action) by everyone indeed effects everyone. It starts with simple ideas, but if everyone can be made aware of how that idea impacts the company, and at the same time, recognize who gave that idea, things may start to change.

Okay ... the speech is done

Good luck and kind regards ...

Hello Kakagi,

My experiences of suggestion box schemes have been with companies wishing for long term futures. Suggestions generaly fell into two catagories those which benefitted the employee, and those which benefitted the company.

Suggestions benefitting the employee were taken as a mutual exchange, the employee being happier subconciously produced more benefiting the company.

Suggestions saving the company money or increasing production without ongoing inconvenience to or greater labour output from the employee were rewarded with the first years increase in profit arising from the specific suggestion.

One the best suggestions from memory was to give the employees shares in the company, so the better the company functioned the greater the share dividend. This was furthered by giving the employees in whole a say in who was employed, this in turn created greater comradery in the employees and greater output.

Cheers,

Peter

We used several versions of such a plan in the factory from which I retired. In general, for any ideas that were implemented, the suggestor received a $ award which was a percentage of the first year's cost savings. Depending on how the company was doing from year to year, the cost of implementation was sometimes taken out of the savings before the award was made and other times, it was not.

We also experimented with giving a token cash award for each suggestion, implemented or not, but we eventually discontinued that because we were getting too may entries that were submitted only to get the token award and had no real potential cost savings value.

We have a suggestion scheme running at our place the feature is

a) On registration a small token $ is given

b) The suggestion is evaluated based on multi parameters

- relevance to the department

- Type of solution - One time, capability building, solution to chronic problem etc

- Innovativeness

- improvement - % over existing system.

- Benchmarkable with the industry leaders ?

- Area of influence - only departmet to the whole manufacturing plant

- Financial Impact.

Weightage to each factor is given and based on the score x weight the awards are decided by the committee.