Employee Suggestion Program Generates High Performance

It is believed that the workplace suggestion box started with the
Japanese in 1721 when the eighth shogun, Yoshimuni Tokugawa…posted the following note: “Make your idea known…. Rewards are given for
ideas that are accepted.” Here it is, 280 years after the Japanese
suggestion idea, however, only 3 percent of U.S. companies have effective
suggestion programs.

According to Chicago-based National Association of Suggestion Systems (NASS),
employee suggestion programs have saved organizations more than $2
billion. Additionally NASS reports the adoption rate of employee
suggestions is 37% reflecting that employees are submitting very
high-quality suggestions that can impact major bottom-line efficiencies,”
says Cynthia McCabe, prior NASS president.

It is unfortunate that in this age where organizations are paying
expensive consultants to find newer, better, and faster ways of doing
things, sometimes the obvious slips right by because the company’s own
work force is not consulted.

According to a March 2001 article reported in USA Today, a survey
developed by OfficeTeam found, Only
38% of working men and women feel their managers are very willing to
listen to new ideas and suggestions for improvement.
Some organizations do listen, and have benefited from employee
suggestions: Money can be
saved in every organization if the management team operates an effective
suggestion program, says
Marsha Myers of Lee Hecht Harrison, a global HR Consulting firm. Managers
usually overlook the companys
most valuable asset and source of information- their employees. As
the economy slows, creative organizations can find new ways to drive
revenue and reduce costs by seeking employee suggestions.

Below are some examples of organizations that have benefited from
incorporating employee suggestions and best practices to create an
employee suggestion program at your organization:

It was the janitor’s idea.The famous El Cortez Hotel in San Diego
provides an excellent example on the profitability advantage of listening
to employees at every level in an organization. The hotel management
decided to install an additional elevator to better serve their guests.
Engineers drew up plans cutting holes through each floor of the hotel. A
janitor, who was concerned with this, made the comment that this would
make a great deal of mess. The janitor was told not to worry because the
hotel would be closed to guests during the construction. The janitor
suggested, “You could build the elevator on the outside of the hotel.” At
the time, this architectural concept had never been done before, but after
investigation by the engineers, it proved an idea that was worth
developing, and is now commonplace in buildings today worldwide. The
janitor’s idea saved the El Cortez from lost revenue, employees from
losing salary and major clean-up costs related to the construction of the
new elevator.

A leak.An employee suggestion involved repairing a leak in a
cooling system.  The system had leaked for years without anyone
thinking much about it.  One day an employee submitted a repair
proposal that resulted in an annual cost savings of $200,000.

Employees Buy An Airplane With Savings.One of the biggest success
stories relating to employee suggestions comes from American Airlines (AA)
in Fort Worth, Texas. AA ran a year-long suggestion program called “IdeAAs
in Flight.” At the end of the year, they purchased a $50.3M Boeing 757
with the money they saved from the employee suggestion program. AA
receives an estimated $55M a year from their employee suggestion program
and reinvests $15M back into the employees suggestion program.

State Government. Randy White, an employee of Oregon State Lottery
submitted a suggestion to his manager in July 2001. Randy found a solution
to upgrade video-lottery terminal equipment so the equipment would accept
the new currency issued last year. Randy recommended replacing 2,500
components in terminals at $12.50 each, compared to the manufacturer’s
proposal of $450 per terminal. Randy saved the State of Oregon $1,200,672
and was awarded $5,000.

New Business Line Started.J. Willard Marriott started out with a
chain of nine profitable A&W root beer stands according to the book,
Marriott
. One of the restaurants was located near the
Washington, D.C. airport that attracted traveling clientele. One employee
noticed that passengers on their way to catch a flight would purchase
meals and snacks stuffing the food into their carry-on luggage. The trend
continued to grow and the employee mentioned it to his boss. This
communication with an employee resulted in the store establishing a
delivery of prepackaged box lunches directly onto the tarmac. Several
months later, the service expanded to American Airlines catering to 22
flights a day. This airport food service has now evolved to more than one
hundred airports.

A Manufacturing plant in Livingston, Tennessee credit employee

participation with keeping the plant open. They have had no layoffs since
1994, have a turnover rate of only 1.6%. In one year, the plant doubled in
size growing the workforce from 70 to 187 employees. In 1999, employees
generated an average of 8.5 suggestions each saving $741,761 in one year.
The management team encouraged and rewarded innovation.

City Savings: Caryn Thompson, who works in the Oakland county
Children’s Village juvenile detention facility, saved the county about
$11,800 a year just when suggesting the youngsters receive a routine
medical test at the facility instead of transporting them and the staff to
a doctor’s office.

Furniture Idea:Miller Furniture has benefited from employee
suggestions since the beginning of the early 20th century.  The owner
valued his employees for their innate talents and implemented an employee
participation plan that included bonuses for helpful cost cutting
suggestions. It was an employee suggestion that led to the creation of the
first cubicle office furniture units, now one of their best selling
products.

Large Organization Benefits:In February 2000, Southwest Airline

CEO Herb Kelleher sent a letter concerning the current fuel cost crisis to
the home of every employee. “Jet fuel costs three times what it did one
year ago. Southwest uses 19 million gallons a week. Our profitability is
in jeopardy,” he wrote. He asked each worker to help by identifying a way
to save $5.00 a day. The response was immediate. A group of mechanics
figured out how to reduce the cost of heating the aircraft. Another
department offered to do its own janitorial work. Within six weeks of the
letter being sent to the employees, this large organization found ways to
save more than $2M.

Marine Manufacturer.A boat manufacturer used paper in their

lamination department to prevent buildup of fiberglass on the floor.
Before, each shift, the floor was covered with paper, and then the paper
would be discarded at the end of the shift. An employee in the materials
management department suggested an alternate supplier who could provide
recycled paper at an estimated savings of $500K per year. The organization
provided the employee with a check for $3K;lots of corporate recognition
and the community appreciated the environmental-conscious neighbor.

A number of organizations provide ideas on how to run an effective
employee suggestion program. According to Tom Jensen, who now runs The
Center for Suggestion System Development in Orlando advises, “Successful
suggestion programs all have one thing in common: quick, thoughtful
responses. Suggestions should be acknowledged within 24 hours.” While most
would agree with this sense of urgency, some other aspects are just as
important. Areas like building trust and integrity into the program. The
rules governing the level and type of reward is also paramount to any
program.

In an article in the February issue of Public Relations Tactics,
author Grunig suggests the need to “revamp” many of the existing employee
suggestion programs. He says that surveys show that suggestions are not
answered. “It’s like dropping something into the black hole,” remarked one
employee. In fact, of the 200 employees interviewed for his survey, less
than half have ever made a suggestion and only 10 percent ever received an
answer. “I get a form letter saying ‘Thank you for your letter, blah,
blah, blah,’” said one. Adding to this, one worker at a manufacturing firm
dropped a note in the suggestion box that said, “Does anybody read these
suggestions?” She has yet to get a response

Unless an organization is prepared to address every suggestion – the
suggestion program should be abandoned as it will only demoralize
employees adds Marsha Myers of Jacksonville, Florida’s Lee Hecht Harrison,
a global HR consulting firm. Another look at flawed suggestions programs
comes from Geoffrey Lloyd of the Cranfield School of Management. According
to Geoffrey, one reason employee suggestion programs most often fail is
because senior managers are not supportive of the process.

Best Practices of Employee Suggestion Programs

  1. Encourage and reward managers who actively solicit employee
    suggestions. Managers may feel threatened when subordinates receive
    recognition. Therefore, employee suggestions never surface. Eliminate
    fear and reward managers who create a learning environment of better
    ideas/suggestions. GE, the #1 corporate in the U.S. rewards managers for
    suggestions from their departments during their annual review process.
  2. Open the suggestion program up to every employee. Many organizations
    are now computerizing their program; however, ensure all employees have
    access to computers. If not, a traditional box should be installed and
    MONITORED. If the suggestion program is too hard, employees will not
    participate. Keep the suggestion process simple.
  3. Suggestions should be reviewed by a cross-organizational management
    committee not just a HR representative. Once an employee submits a
    suggestion, they anxiously await the feedback. Establish a time line to
    ensure the employee receives immediate feedback on their suggestion,
    i.e. 24 hours, 5 working days, etc. When an employee submits a
    suggestion, they wait, they watch, they hope! A senior official should
    provide immediate feedback on all suggestions.
  4. Suggestions might be categorized as follows: major implementations,
    which consist of cost/time saving suggestions, revenue producing
    suggestions and quality of work life issues.
  5. Suggestions should include: the suggestion and its value/ benefit,
    whom it will impact or affect and implementation and cost estimation
    strategies.
  6. Suggestions must be rewarded. Many organizations award 10-25% of the
    savings and the CEO acknowledges the contributor in the corporate
    newsletter. Employees value both intrinsic and extrinsic rewards.
  7. Ensure the suggestion program includes customers/vendors suggestions
    and their recommendations.
  8. For the employee suggestion programs to work, there needs to be
    someone senior responsible for the program.  The program should
    acknowledge employee contributions, rewards, debriefings, etc. This
    person’s performance should be evaluated on the number of employee
    suggestions submitted and accepted. If few suggestions come in, then
    someone is not stimulating interest in the program.

As many organizations have seen the effectiveness of an employee
suggestion program. It can be a positive force to motivate, improve
performance, productivity, safety, and contribute to the bottom line.

Submitted by Freda Turner who is affiliated with Doctoral and Graduate
Studies Programs at University of Phoenix and Embry Riddle Aeronautical
University.

http://www.chartcourse.com/bright-ideas-employee-suggestion-program.html

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