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Work Improvements through Suggestion Schemes

• satyendra
• July 31, 2013
• 2 Comments
• ESS, Ideas, Innovations, suggestion, Suggestion scheme, Suggestion scheme process flow,

Work Improvements through Suggestion Schemes

Techniques to motivate, empower, and reward the employees have become ever more sophisticated and expensive. One of the most obvious and simple though overlooked for the tapping the creativity of employees is the suggestion scheme.

According to the lean manufacturing system, ‘idea’, ‘suggestion’, and also the commonly used ‘kaizen suggestion’ all refer to employees’ proposals as to how their workplace are to be enhanced through improvements introduced into the organizational areas and processes. In order to encourage such feedback among their employees, a number of organizations introduce specially-tailored organizational solutions called employee suggestion schemes / programmes, idea management systems or ‘kaizen teian’ (Japanese term). Under such schemes, employees’ ideas are typically put forward in writing or through electronic means and afterwards, the ideas are evaluated. If considered worthy of implementation they are introduced and mostly the suggesting employees are rewarded.

Employee suggestion scheme (ESS) plays a crucial role in an organization having a desire to become more innovative. Nowadays many of the organizational managements are aware of the importance of employees’ creativity and the suggestion schemes are one of the important instruments for channeling the employee creativity. The employee ideas contribute to the achievement of high performance, excellence, and competitive advantage in the organization.

ESS is described as a formalized mechanism which encourages employees to contribute constructive ideas for improving the organization in which they work. It can be seen as an un-tapped reservoir of effort and knowledge which can improve organizational processes and effectiveness. Suggestion schemes are also sources of innovation as they promote the implementation of new routines and facilitate the improvement and refinement of existing routines. Hence, ESS plays a pivotal role for the organization wishing to become more innovative. New and creative ideas are essential to solve problems, economize work hours, spare the efforts of many employees, and meet their social and cultural needs. After all, untapped employee creativity is a wasted organizational resource. An effective ESS helps convert that waste into wealth.

The employees’ suggestions create a win–win situation both for the organizational management and the employees alike. However, despite several benefits of the employee suggestion schemes, sustaining and implementing them is still a challenge for the organizational management.

The organizational management, which understands the behaviour of the employees and creates a culture to drive employees’ creativity in the organization, propels the organization on the path of success. Suggestion scheme can be a useful way to obtain and utilize employees’ creative ideas. An effective suggestion scheme also motivates employees to think creatively and to participate in the suggestion process. It also motivates the employees to participate in the decision making process.

The suggestion scheme motivates employees to use their experience, expertise and creativity for improving the way the organization is being run. ESS is a formalized procedure to encourage the employees to think creatively about their jobs and their job environment and to come forward with ideas for which they can be rewarded on a specific basis, if acceptable and to the advantage of the organization.

The employees’ ideas and innovations are very important in the organization since employees are working at their workplaces and are experiencing the advantages or disadvantages of what they are doing.  Hence, suggestion schemes are seen as an aspect of human resource management (HRM), with the main emphasis being on how HRM can motivate the employees so that they can contribute to the management of change. Motivating employees involves more than simply offering rewards to submitters of the suggestion. Highly developed suggestion schemes typically aim to collect ideas from operational-level employees in order to improve standardized procedures, improve work place performance, and improve the quality of work.

The interest and practice in using the ESS is widespread and it is recognized that innovation is an important source of growth, but sustaining innovation is not easy. The maturity in assessments of the suggestions is less common in many of the organizations and this has bearing on the usefulness of the suggestion schemes. There are many critical success factors and barriers to suggestion schemes. However, in the absence of a formal mechanism to assess the maturity of the suggestions, the benefits achieved through suggestion scheme are rather limited in several organizations. For extracting maximum results through ESS, the organization is required to assess the suggestion scheme objectively for its sustainable growth and also to provide the supporting environment in the organization for the ESS so that it can flourish in the organization.

The primary objective of a suggestion scheme is to inculcate a value and culture of looking for continuous improvement and to contribute towards such improvements. Hence, any idea initiated by an individual employee towards making continuous improvements to work procedures and processes, whether directly relating to the employee’s work or not, needs encouragement.

Employee suggestion schemes have been used in organizations for a long time due to the fact that they enable fostering of creative ability of employees. However, they are to be used effectively and in a sustainable manner to better the creativity and innovation capacity of the organization in order to improve competitive advantage.

Definition

The concept of a suggestion scheme is simple. It can be defined as a management tool, which encourages employees to contribute ideas for improvement and innovation in the organization. It is based on rationale that creative talent exists in the employees and each of them has the ability and is well placed to make suggestions to improve the way the job is being done at the workplace.

The suggestion scheme has been defined as ‘A suggestion scheme is a formal mechanism, which encourages employees to contribute constructive ideas for improving their organization’.  As per another definition a suggestion scheme is a formal channel which encourages every employee to suggest ideas which can be helpful in solving or avoiding problems or improving work process or the work environment.

Through the suggestion scheme, the employees can participate directly in the improvement of the productivity in the organization. The employees find their job more meaningful and interesting when they participate in the decision making process involving their work.

History

The recorded history of suggestion systems points to these systems’ origin as 1721, when Yoshimune Tokugawa, the 8th Shogun, placed a box called ‘Meyasubako’ at the entrance of the Edo Castle for written suggestions from his subjects. The first recorded implementation of a suggestion scheme was in 1770 when the British navy has asked its soldiers by this scheme to express their ideas without fear of punishment.

Industrial suggestion systems trace their origin back to the 19th century. In 1880, William Denny, a Scottish shipbuilder, asked his employees to offer suggestions in order to build ships in better ways. The shipyard introduced the first physical box to collect ideas of employees. NCR became the first American company in 1892 to implement a company-wide suggestion scheme. The concept was the ‘hundred-headed brain’, developed by CEO John Patterson. Following this, the Kodak Company became a pioneer in employee suggestion systems with its program being introduced in 1896.

Suggestion boxes in the manufacturing sector became popular in World War 2 and in the post war period. Soon suggestion schemes became part of the Total Quality movement and an integral part of cost, safety, and quality improvement initiatives in an organization. Suggestion schemes have a considerable history and are now popular throughout the world including the USA, Europe, Asia and the Middle East.

In the business world, formal and structured suggestion schemes were first introduced as a modern practice more than one hundred years ago. Industry associations, such as the ‘Employee Involvement Association’ (EIA), have come into existence and have contributed greatly to the increased formalization, objectivity, and professionalism of suggestion programs. The EIA has instituted educational, statistical, and professional development programs to raise the bar of best practices in the encouragement, evaluation, development and implementation of ideas which add value to their organizations. ‘IdeasUK’, the United Kingdom’s foremost association for the promotion of employee involvement programs, was also founded in 1987. Its prime purpose is to assist organizations in both the public and private sector. It is now an organization with more than 100 members worldwide.

The trend of cost savings due to employee suggestion schemes continues today. The world class suggestion systems are exceeding 40 ideas per person annually, with greater than 80 percent implementation rates and high levels of participation. Further, the benefits gained in terms of greater morale and increased employee involvement is likely to outweigh, by far, the financial investment. Hence, suggestion systems are one of the popular ways of taking advantage of employees’ creativity.

In the present day scenario, suggestion schemes have come a long way from anonymous post boxes or suggestion boxes to a sophisticated computer based electronic suggestion system. Some of the common issues with traditional boxes have been the delay in processing of the suggestion and lack of feedback being given to the employees. While suggestion schemes continue to retain many of the best elements of the original concept, now it is almost unrecognizable in terms of the style of operation, appeal, and delivery of results.

Suggestion schemes long predate the concept of knowledge management and consideration of the upward communication within the organization. Suggestion schemes can perform these functions very effectively, to the benefit of the organization. An examination of the types of knowledge collected by suggestion schemes can thus help the organization which is seeking to develop a knowledge management strategy.

Suggestion schemes initially capture explicit knowledge in the form of ideas written on paper or submitted through email, though the ongoing involvement of employees giving the suggestion in the evaluation and implementation of their suggestions facilitate the transfer of some implicit knowledge as well.

Creative talent exists in every individual. Everyone is well placed to suggest improvements in the way his job is done. Every individual takes an interest and pride in his work and is keen to make continuous improvements to his organization. His job becomes more meaningful and interesting when he is given an opportunity to make continuous improvements in his work.

In an organization, many of the processes are driven by set procedures and instructions. Sometimes a necessity arises to modify procedures and instructions either because of a need arisen due to change in the external environment or because of some mistakes in the procedure or instructions. Suggestion schemes help in the process of initiating such modifications.

Employees find their job more meaningful and interesting when they participate in the decision making process. Also they identify with the organization and pledge their commitment to improvement in productivity, improved service, and management practice. Hence, the suggestion scheme can benefit an organization significantly, if it is implemented with a correct approach.

Process

In its simplest form, a suggestion scheme elicits suggestions from employees, classify them, and dispatch them to the ‘experts’ for evaluation. After this, the suggestion can be adopted, in which case the employee who has given the suggestion is normally rewarded. But even if a suggestion is rejected, the suggesting employee can still be rewarded with a token gift.

The suggestion scheme process involves writing of suggestions on a predefined format by the employees of the organization and dropping the same in a suggestion box which is easily accessible. A designated employee empties the suggestion box / boxes regularly at a predefined interval. He lists all the received suggestions for their further processing. A designated committee of the employees meets and goes through all the received suggestions and decides which suggestions are to be implemented. The accepted suggestions are then acknowledged to the suggestor. Due recognitions and rewards are given to the suggestors of the accepted suggestions. A typical process flow of an employee suggestion scheme (ESS) is given in Fig 1.

Fig 1 Typical process flow of employee suggestion scheme

Acceptance criteria of a suggestion

An idea is a suggestion only when it is beneficial to the organization and fulfills one or more of the criteria.  These criteria are namely (i) the idea does not violate the vision, mission and objectives of the organization, (ii) it improves the efficiency of processes, (iii) it improves the quality of the products or / and services, (iv) it Improves usages of resources, materials, and space etc., (v) it reduces damages, (vi) it cuts down service time and improves service standards, (vi) it cuts down wastages and helps in cost reductions, (vii) it simplifies the procedures and reduces paperwork, (viii) it improves the equipment designs and layouts, (ix) it helps in their better utilization, (x) it improves practices and routines, (xi) it improves the working environmental conditions including removal of hazards to health and possibilities of accidents, and (xii) it  increases in the utilities, qualities, yields, or output of the products.

An idea is a not a suggestion if it is related to t(i) a grievance or a complaint, (ii) a criticism directed at other employee, (iii) an activity which is part of the job responsibility of the employee, (iv) collective bargaining matters and management policy matters, (v) government policies, (vi) additional facilities, benefits, or amenities, (vii) common idea floating around, and (viii) a suggestion without a solution.

Implementation of suggestion scheme

The success of a suggestion scheme lies not only in generating the creative suggestions but also in the implementation of these suggestions. The support of the organizational management and committed resources are needed. When this requirement is met, then a transfer takes place from employee creativity to practicable suggestions, giving the organization a large and constant supply of relevant suggestions for continuous improvement.

Employee participation is the foundation of the suggestion scheme. Hence, employees are required to be motivated and encouraged for their participation in the suggestion scheme. Such participation can be increased if employees develop a sense of belongingness to the organization

Rewards are key element identified for the success of suggestion scheme. A suggestion system results into improvement in the organization which ultimately contributes to the cost reduction. Hence, employees giving suggestions are to be rewarded not only with tangible, but intangible benefits as well. Incentives are important for the employees to feel that the submission of the useable suggestions is going to be rewarded. Employees are to be financially rewarded and recognized in an appropriate way. The rewards need to reflect the value of the suggestion to the organization.

An ESS has three important elements which determine the success or failure of the outcome during the implementation of the suggestion scheme. These elements are (i) organizational management, (ii) the suggestion scheme itself, and (iii) the process of implementation. The important aspect is to utilize the employee creativity through employee driven innovation. For achieving this employees’ participation and the employees’ involvement is the necessary needed input. This is shown in Fig 2.

Fig 2 Implementation and outcome of the suggestion scheme

Successful implementation of a suggestion scheme does not depend on whether it is a complex scheme or a simple scheme but how the organization actually motivates its employees to participate actively in the scheme. The following factors are essential for getting success in the implementation of a suggestion scheme.

• It is important for successful suggestion schemes that the management demonstrates its support and sincerity in setting up and implementation of the suggestion scheme. This support is to be available in terms of practice, commitment, and leadership. It is claimed that when the management demonstrates its faith in the scheme, promotes and suppors,t it, it encourages all the managers to view it as a positive force for continuous improvement.
• It is important that the line managers work closely with their employees, helping them to come up with ideas, guiding their thinking and assisting them to get the ideas down on paper. Likewise, support of the line managers has been noted as crucial for the success of the suggestion scheme since it is likely to have impact on the other elements such as employees’ participation and implementation of the ideas.
• Managers and line managers are to be given complete freedom for implementation of the suggestion scheme
• There is a well developed administrative system needed in the organization to facilitate the processing, evaluation, monitoring, and rewarding of the employees. There is to be a clear criterion available for steering the suggestion scheme towards achieving the targets.
• There is a necessity of a detailed and consistent evaluation criterion. The scope of the suggestion is to be clearly defined.
• There is to be a good combination of tangible and intangible rewards which are to be organized to motivate the employees to participate. Further, there are to be promotional rewards such as ‘best suggestion of the year’ and ‘highest numbers of suggestions’ rewards can be given.
• There is a requirement of the regular feedback and performance monitoring for managing and measuring the extent of interest and participation in the suggestion schemes.

Suggestion implementation and the subsequent creation of success stories are very important since implemented suggestions demonstrate the continuing success of the suggestion scheme and implemented suggestions provide the employees giving the suggestions with personal satisfaction when they see that their suggestions are in operation. The success of the suggestion scheme lies in the implementation of the suggestions.

Suggestion scheme has potential benefits. It can lead to cost savings, and generation of new revenues. It can be instrumental in triggering customer satisfaction and employee satisfaction. The main benefits of suggestion schemes are to achieve employee commitment and accountability, employee confidence, sense of security, well-being, and employee satisfaction. The sustaining of the suggestion scheme has a direct impact on improved organizational processes, improved quality service, and improved customer satisfaction. Improved processes and services can lead to new revenue generation and cost savings. It is very evident that these factors play a considerable part in the success of suggestion scheme. They can trigger the value and volume of the suggestions and are necessary for the sustainability of suggestion scheme.