The Power and Value of Employee Suggestion Programs

The Power and Value of Employee Suggestion Programs

It is thought that that the workplace suggestion box started with the Japanese in 1721 when the eighth shogun, Yoshimuni Tokugawa authored and posted the following note: “Make your idea known. Rewards are given for ideas that are accepted.”

Here it is, however, 300 years later and only 4% of U.S. companies can report having effective employee suggestion programs.

According to Ideas America, employee suggestion programs have saved organizations that do make use of them more than $2 billion. Additionally the organization 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.

It is unfortunate that at a time when 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 workforce is not consulted.

When they work, as the research bore out, employee suggestion programs really work. Here are just a few past examples:

A Large Organization Benefits: In February 2000, Southwest Airlines 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.

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He then 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, the organization found ways to save more than $2M and implement cost saving programs that remain in effect to this day.

Furniture Idea: Herman Miller Furniture has benefited from employee suggestions since the beginning of the early 20th century. Miller 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 worldwide.

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.

In the 196os, 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.

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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 executed 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 significant lost revenue, employees from losing salary and major clean-up costs related to the construction of the new elevator.

These are just a few examples, you can find many more. If you are now even beginning to consider giving the idea more thought for your organization here are some tips for doing so the right way.

Get Management Involved

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.

Let Everyone Have a Voice

Remember the janitor who changed the face of worldwide architecture? It's essential that you open the employee 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 to participate in, employees will not do so. Keep the suggestion process simple.

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Give Timely Feedback

Suggestions should be reviewed by a cross-organizational management committee not just a single 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.

Reward Ideas

Suggestions must be rewarded. How you do so is up to you, but many organizations award 10-25% of the savings and the CEO acknowledges the contributor in the corporate newsletter or in a company wide meeting. Employees value both intrinsic and extrinsic rewards and this is another way to boost employee engagement too, as well as your company's bottom line.

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