Suggestion Schemes, do they work?
Does an employee suggestion scheme offer an additional way to engage with staff and involve them in continuous improvement, or is it just another initiative that will fall by the wayside? The not for profit organisation; IdeasUK, clearly thinks suggestion schemes are useful. They manage a conference each year with the grand title, ‘International Ideas Week’. They estimate their member companies have enjoyed savings of £90 million as a result of the 120,000 suggestions they received from their employees. Research across 120 UK organisations by the Institute of Work Psychology at Sheffield University appears to confirm their view that staff suggestion schemes do have an impact on employee creativity and involvement.
That said, like most initiatives, a staff suggestion scheme in isolation will not change the culture of an organisation.
What are the pitfalls?
There are several to be considered and addressed. Employees may use the scheme to let off steam, not always a bad thing but it will need to be controlled. A lack of transparency will also cause issues; once dropped in the box any progress through the scheme can be invisible, especially if the innovation manager is busy. Certainly the most significant reason why these schemes collapse is the failure to keep staff informed of progress. That lack of feedback could stop an employee making any further suggestions. Inevitably, suggestions from several people can be similar, and may come in at the same time. Plus, there is also a risk that employees may be de-motivated if ideas are not accepted so these points must be carefully considered.
Simplicity is probably the key.
Like most initiatives, simplicity together with providing early feedback to the employee within a few days of the idea being put forward are probably key to its success. The early response should perhaps include some form of reward or recognition, to encourage creative behaviour and increase willingness to share ideas.
Do on-line suggestion schemes have a higher chance of success?
Paper-based suggestions can sometime cause more issues than they are worth, that’s why an online, browser-based scheme makes the process more efficient, saves space and will encourage more employees to take part. This, in turn, will provide a higher chance of success.
Some businesses are already reaping the benefits of an on-line suggestion scheme. A good example is the Siemens plant in Congleton; employing 400 people and generating over 4,000 suggestions a year with around 3,000 of those implemented, generating savings of almost £1m a year. Significantly their scheme has no paperwork, just an intranet application with each manager evaluating the ideas. When an idea is accepted, recognition is in the form of vouchers, with £50 being typical, the Siemens concept being recognition on acceptance is a better incentive than larger amounts after the idea has been implemented. A key factor to their success is the publication of department league tables, with further departmental awards giving the mangers an incentive to accept and implement good ideas.
What types of rewards should be considered? Ask your staff for their preferences and be prepared to offer several different incentives for a good idea. Cash will be high on the list but time off, vouchers, meals out, holidays, even company shares may be important factors for some employees.
Don’t forget the tax implications, anything your employees receive should be treated as a benefit and will be subject to income tax and national insurance. There may be some exceptions, a £25 encouragement award for a good idea can be tax-free and ideas that result in identifiable savings can permit an employee to receive up to 10% of the amount saved in the first year, to a maximum of £5,000. Check with your accounts department to see which awards will be the most efficient.
Pictured: The Idhammar Suggestion Scheme
Getting started with your own suggestion scheme
Many employees will already have some ideas and will be keen to put them forward once the suggestion scheme is in place, some may even have a few to share. So here are some examples of how to make your on-line based suggestion scheme a simple six step process:
· Where do you work (function)
· How can we contact you?
· Your idea?
· What problem will your idea resolve?
· How does it resolve the problem?
· What benefits do you envisage?
The real key is to use the power of the computer to ensure that feedback is appropriate, timely and as automated as possible. Measure the manager’s response and progress as a key part of the scheme.
An online suggestions scheme should cost very little to operate, so compare those costs to the direct savings to be made by implementing staff suggestions. A return on investment in the region of three-to-one could be achievable. On average, every employee has at least one or two good ideas each year. If you're not capturing them, you could be wasting money.
It’s also important not to think of a suggestion scheme as an isolated element, it is part of the continuous improvement toolkit and works in parallel with OEE measurement systems. When the CI technician identifies a significant loss in the OEE system, and then receives a suggestion from an operator showing how that loss can be reduced or prevented, everyone wins.
Alan France, Operations Director of Idhammar Systems, has extensive experience in lean manufacturing with a background that includes several years as Engineering Systems Manager for the largest food company in Europe. A systems specialist, he now consults on the importance of underpinning lean initiatives with realistic targets and sound metrics.