Implementing a suggestion scheme

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Implementing a suggestion scheme

  1. 1. analysisImplementing a suggestion schemeStaff suggestion schemes vary widely in formality and scope, but all share two key objectives:boosting the performance of an organisation an d increasing employee involvement. The methodsemployers use to record, evaluate, reward and publicise ideas are likewise diverse. However, mostsuccessful suggestion schemes have found simplicity and transparency to be essential inencouraging participation.The scale and scope of a suggestion scheme can some organisations this responsibility falls tovary considerably according to the size and the internal communications or qualitystructure of the organisation in which it functions. At larger organisations, where theoperates. The organisations profiled in this volume of suggestions the scheme generates canStudy range in size from 125 employees to some be high, the team may consist of a manager and40,000. a group of full-time administrators.Traditionally, suggestion schemes were often The role of the scheme administratorstand-alone initiatives and this remains the case Regardless of the scope of a scheme, there areat many companies, such as Translink and DML certain key aspects which are generally commonGroup. However, schemes are increasingly to the role of the central administrator or team.positioned within wider quality or improvement The administrator oversees every part of theinitiatives, or operate alongside an suggestion process, from submission through toorganisation’s other recognition programmes. evaluation and reward. They are usuallyThe BUPA IDEAS programme is an example of responsible for publicising the scheme internallysuch an approach. and reporting on how it is working to senior managers. They may also have some role inGetting started monitoring ideas once they have beenWhen devising a suggestion scheme it can be implemented.helpful to talk to other organisations that have Staff numbers and participation rates both haveenjoyed success in this area. Translink, for a bearing on the time commitment required toexample, consulted the Northern Ireland Civil manage a scheme. The IDEAS scheme at BUPA,Service when developing its Milesbetter scheme for example, is overseen by a central team ofand both Gloucestershire Constabulary andSaffron Walden Herts & Essex Building Society four people within the company’s organisational(Saffron Walden BS) have benefited from other development function, which also hasemployers’ experience in this area. Many responsibility for the company’s other employeecompanies have found ideasUK, the national recognition programmes. At otherassociation of suggestion schemes (see the box organisations, acknowledging and recordingon page 8), to be a useful broker of networking suggestions and sending out rewards can take asopportunities. little as half a day each month of an HR administrator’s time. The time commitment forTranslink and United Utilities North West are evaluation panel members is sometimes as littleboth the product of mergers and they were able as an hour a month.to draw valuable lessons from the experiencegained from schemes that had been in operation Local supportpreviously. Translink also consulted focus The central IDEAS team at BUPA is supportedgroups to gain an insight into how best to by local co-ordinators who are responsible foroperate a scheme from the perspective of both overseeing the smooth operation of the schememanagers and frontline employees. within their business area. The introduction of an electronic system has relieved them of muchAdministration of the administrative burden and they are now able to devote more time to other aspects ofWho has responsibility? running the scheme, such as ensuring that it isMost schemes are managed centrally by small publicised and that ideas are evaluated in ateams and usually sit within HR, although at timely manner.i HR Study 812 • December 2005 3 © Incomes Data Services Ltd.
  2. 2. Suggestion schemes Submitting and recording ideas straightforward to run reports on scheme While suggestion schemes have come a long way activity. This information can be used in various since the days of the suggestion box in the ways, for example, to monitor participation and corner, many organisations still find a paper- implementation rates or to demonstrate the based submission process to be the most scheme’s return on investment to senior practical way of receiving ideas. Many management or the business areas that fund employees at companies such as DML or awards. Translink do not have ready access to a PC and instead pick up suggestion forms from staff Keeping it simple rooms or depots. United Utilities makes PCs Over-complicated, bureaucratic schemes risk available for occasional Internet and intranet having an adverse impact on participation rates. access to those employees who do not work The original scheme at Translink, for example, regularly with computers. However, it is also required suggesters to complete a detailed four- willing to accept paper forms from staff more page suggestion form and to substantiate their comfortable with submitting ideas in this way. idea with research into factors such as cost savings. When the co mpany drew together Electronic resources ha ve an increasingly responses from focus groups at the time of significant role to play in the administration of a relaunching the scheme, it found that the level of suggestion scheme. Most organisations track detail required was deterring employees from ideas electronically, often through spreadsheets putting forward suggestions. By condensing the or databases. There is even specialist software form into a simple single-page document, it has targeted at this market and some schemes are now run entirely electronically. boosted submissions from sections of its staff who had felt ill-equipped to provide the detail Advantages of an electronic format previously required. Keeping track of ideas in an accessible electronic format offers a number of advantages. A well- organised tracking system provides an easy Eligibility criteria reference point for checking whether an idea is Schemes are generally accompanied by some original and allows the scheme administrator to form of eligibility criteria, outlining at the outset give prompt and pertinent feedback if a not only what sorts of suggestions are suggestion appears to duplicate an earlier permissible but also who may submit ideas. At submission. some organisations, these are set out as part of detailed rules. At other companies, the emphasis Efficient electronic organisation of suggestion is on informality and only very general guidance scheme data also makes it relatively is provided. Typical questions appearing on a Who can submit suggestions suggestion form Companies are keen to maximise exposure to Ideally, the suggestion form should be as simple to good ideas and some extend their scheme to the complete as possible. Too much detail may deter broadest possible pool of suggesters. At United employees from putting forward their ideas. Utilities, for example, fixed-term contractors Forms typically address some or all of the areas and agency temps can be considered for voucher outlined below. awards but are not eligible for awards based on ● What is the current issue or practice? a percentage of cost savings. Gloucestershire ● What is your proposed solution? Constabulary is considering opening its Bright ● How much would it cost to implement your Sparks scheme to employees of partner solution? organisations such as cleaning contractors. ● Estimate how much money your idea would save or generate. Managers excluded ● Is the idea business-specific, or can it be applied Many organisations, such as Translink, do not across the organisation? permit suggestions from those in management ● Will the idea have implications for existing roles since it is generally felt to be part of their processes or work conditions? normal job to come up with ideas and Employees are frequently asked to include any innovations. At Saffron Walden BS, heads of research they have carried out in support of their department and members of the evaluation submission. panel cannot take part in its scheme.4 i HR Study 812 • December 2005
  3. 3. AnalysisThe right idea Qualifying criteria for suggestionsIt can be helpful and save time in the long run ifrestrictions or guidelines about the kinds of Many companies set criteria for staff to work to when submitting a suggestion. The types of ideassuggestions that are eligible for consideration frequently encouraged include those which:under a scheme are made clear. This can helpreduce the number of unsuccessful or ● save costs or generate revenueinappropriate submissions, saving evaluators ● increase operational efficiencyvaluable time and limiting the demotivating ● improve customer serviceeffect of having a suggestion rejected. ● mitigate risk (eg health and safety issues) ● promote environmental or communityMost schemes exclude duplicate ideas, although initiatives.some employers are willing to treat these on a Ideas are often ineligible for a reward if they:case-by-case basis. This enables them to ● fall within the employee’s normal dutiesrecognise that a second suggester may have ● duplicate a suggestion that has already beenconsidered nuances not mentioned in the earlier submittedsuggestion or submitted a more detailed analysis ● cannot be applied across the organisationof the issue or potential solution. ● relate to terms and conditions of employment.As a rule, suggestions are not rewarded if theemployee might reasonably have been expectedto come up with the idea in the course of their to identify suitable evaluators. At Unitedeveryday duties. Again, some organisations take Utilities, suggestions are invariably sent to thea flexible approach to this, in recognition of the employee’s line manager in the first instance asfact that employees do not always work in an the majority of ideas relate to the suggester’senvironment where innovation is encouraged. business area.Others, such as Saffron Walden BS, may reward Panel-based evaluationemployees who propose enhancements to Some organisations evaluate ideas on a panel orprocesses they work with on a regular basis, committee basis, with a range of functions andprovided they are not employed in a capacity operational areas represented at the samewhere they might reasonably be expected to meeting. Such panels can provide an efficientidentify such improvements. means of evaluating ideas from a broad range ofMeeting the criteria subject areas and of weighing up theirSome schemes encourage staff to seek support importance relative to each other. Experiencefrom their line manager in firming up their gained at Translink suggests that these panels aresuggestion to give them the best chance of particularly effective when they reflect as diversesuccess. At DML, all ideas are subject to an a range of expertise as possible. However, in theinitial assessment by the suggester’s line manager early days of its Milesbetter scheme, thebefore they can be consid ered by the evaluation company used divisional panels which metcommittee. At Saffron Walden BS, where the infrequently and did not always take ownershipinvolvement of line managers is also actively of ideas. This was felt to be a major contributingencouraged, the scheme’s mascot Ivan Idea factor to the decline in participation levels at theoccasionally circulates via the intranet ‘handy time.hints’ on how to complete the society’s Organisations that evaluate ideas on asuggestion form. committee basis frequently aim to reflect a mix not only of technical expertise but also ofEvaluating suggestions seniority. As well as bringing different perspectives on an idea, including front-line staffChoosing an evaluator at this stage can help underscore a company’sThe process of choosing a suitably qualified commitment to employee involvement.colleague to assess a suggestion is not alwayseasy and often relies on a scheme administrator’s Keeping suggesters updatedknowledge of, and links to, staff within the Giving timely and detailed feedback is anorganisation. The scheme administrator at extremely important factor in building theGloucestershire Constabulary, for example, has credibility of a scheme in the eyes of employees.built up an extensive network of contacts over A failure to do so can weaken confidence in theher years in the force and is therefore well placed scheme and adversely affect participation levels.i HR Study 812 • December 2005 5
  4. 4. Suggestion schemes Cutting out the middleman some common pitfalls, for example, the negative To facilitate good feedback, it can be helpful to consequences of giving inappropriate or late put suggester and evaluator in direct contact. feedback. This has worked well but requires Organisations tackle this in various ways. Some, considerable time commitment on the part of the such as Gloucestershire Constabulary, copy central IDEAS team and can disrupt the suggesters into correspondence with the evaluator’s working day if they have to travel to evaluator of their idea wherever appropriate. attend the session. To overcome these issues, the Certain BUPA evaluation panels invite company is looking into the possibility of employees to present their idea in person. running this training in the form of an e-learning module. Managing expectations Many schemes work to tight timescales for Guidelines acknowledging the submission of an idea. Some Not all organisations have the resources to train go a step further and set out target timeframes evaluators but many set out guidelines to which within which a suggester can expect their idea to they should work. However, as with the be evaluated fully. Panel-based evaluation suggestion form itself, it is important to keep particularly lends itself to this, as the scheme such guidelines as succinct as possible to ensure administrator can advise a suggester of the date evaluators are not dissuaded from following of the next panel meeting when acknowledging them. Both Gloucestershire Constabulary and receipt of their suggestion. Translink have condensed the written material they provide into an easy-to-follow format. However, it is not always practical for an idea to be evaluated quickly. There may be issues of Scoring suggestions customer or employee safety to consider, for Scoring matrices can be a very useful tool for example, or it could be necessary to investigate ensuring consistency in the evaluation process. the level of savings that might be achieved. This These require the evaluator to rate a suggestion need not be problematic provided the suggester according to its merits in certain key areas, for is kept updated on progress. Saffron Walden BS example, customer service or financial benefits. is particularly transparent in this respect and A number of organisations, including Saffron publishes the Ivan Idea tracking spreadsheet on Walden BS and Gloucestershire Constabulary, its intranet. also include an element assessing a suggestion’s Taking suggestions seriously compatibility with, or contribution to, corporate Occasionally, people use suggestion schemes as strategy. Sometimes the employee’s efforts in an outlet for venting their frustrations. Others compiling the submission count towards the propose ideas that at first sight can appear rather final score. Examples of scoring matrices are eccentric. In both cases, it is advisable to provide highlighted in a number of the case studies. prompt and diplomatic feedback. Online scoring The IDEAS team at BUPA feels strongly that The suggestion scheme software that supports even apparently small or trivial suggestions can the BUPA IDEAS scheme was recently enhanced have a worthwhile issue at their core. It therefore by a step-by-step process that allows evaluators encourages evaluators to consider all possible to score ideas online. The modification also applications of an idea. Many organisations also created personalised accounts for evaluators, ask evaluators to think carefully about the who can now see at a glance how many overall scope of an idea, in case it can be applied suggestions are awaiting their attention. These more broadly than the suggester originally enhancements have helped to simplify and speed envisaged. up the evaluation process. Ensuring consistency Rewarding good ideas Where a number of people are involved in the evaluation process it is important that all ideas Responsibility for deciding on the amount of any are treated in a uniform way. Companies can award generally lies with the evaluator or panel take a number of measures to address this. that originally assessed the suggestion. Some schemes, such as Bright Sparks at Formal training Gloucestershire Constabulary, have a separate BUPA provides formal training for evaluators, panel to allocate awards. The majority of outlining their responsibilities and flagging up schemes specify an upper limit on the monetary6 i HR Study 812 • December 2005
  5. 5. Analysis The tax position of staff suggestion scheme awards . HM Revenue & Customs operates an extra-statutory improvement in efficiency and/or effectiveness likely to concession (A57) to allow some awards made by staff be achieved measured by reference to: suggestion schemes to be free of tax, as long as they fall ● the prospective financial benefits and the period over within the following guidelines. which they would accrue and The Revenue’s concession ● the importance of the subject matter having regard to ‘Income tax will not be charged under Schedule E in respect the nature of the employer’s business. of an award made by an employer to an employee under a (e) The amount of an award does not exceed: staff suggestion scheme where the following conditions are ● 50 per cent of the expected net financial benefit satisfied: during the first year of implementation or (a) There is a formally constituted scheme under which ● ten per cent of the expected net financial benefit over suggestions are made and it is open to all employees on a period of up to five years, equal terms. subject to an overriding maximum of £5,000. (b)The suggestion for which the award is made is outside the Where an award exceeds £5,000, the excess is not scope of the employee’s normal duties. The test is covered by this concession. whether, taking account of his experience, the employee could not reasonably have been expected to have put (f) Where a suggestion is put forward by more than one forward such a suggestion as part of the duties of his post. employee the award made under (e) above is divided Where meetings of employees are held for the purpose of between them on a reasonable basis. putting forward suggestions, they should be regarded as (g)Any encouragement award is of £25 or less. An part of their duties and any consequential awards would encouragement award is one which is made in respect of not be within the terms of this concession. a suggestion which, though it will not be implemented, (c) Awards other than encouragement awards – see (g) has some intrinsic merit and/or reflects meritorious effort below – are only made following a decision to implement on the part of the employee in making the suggestion. the suggestion and are made directly to the employees This concession does not apply to any liability to income tax concerned. or capital gains tax on income or gains arising from the (d)The decision to make an award other than an exploitation or disposal of rights in an invention devised by encouragement award is based on the degree of the employee (eg patent rights, know-how etc).’value of an award. Sometimes, there is the A less regimented approach can also work welloption of seeking senior management approval for organisations which reward ideas primarilyto make higher value awards for outstanding on the grounds of whether they can besuggestions. The tax treatment of awards made implemented or not. Awards are then allocatedto employees under a suggestion scheme is depending on their relative impact on theoutlined in the box above. company or predicted (or proven) cost savings.Types of awards Some benefits harder to quantifyMost organisations use some form of tiered Some ideas do not bring obvious gains to anaward structure to reward staff for their organisation’s bottom line, but are nonethelesssuggestions. Some companies pay beneficial. Suggestions relating to customer‘encouragement’ awards even if an idea is not service, for example, may cost money tofeasible and does not merit implementation. This implement but can indirectly lead to improvedavoids disappointing staff and is a token of customer satisfaction and therefore retention.appreciation for their efforts. Others sendOrganisations which employ a large proportionpromotional gifts, such as pens, to acknowledge of staff in front-line positions, such as Translinka suggester’s submission. and Saffron Walden BS, receive many suggestions of this kind.Evaluation matrices can be particularly helpfulwhen deciding on the appropriate level of Other suggestions where the benefits cannotaward. This can help in terms of benchmarking easily be quantified may be concerned withideas against each other. However, it may be mitigating risk. A suggestion followed up atappropriate to allow some flexibility, as not all Gloucestershire Constabulary saw the fitting ofideas fit neatly into such a structure. deer whistles to the force’s operational vehicles.i HR Study 812 • December 2005 7
  6. 6. Suggestion schemes ideasUK – a body promoting staff suggestion schemes . ideasUK is a national association of organisations end-of-year conference and, as well as choosing the from both the public and private sectors that aims outright ‘Idea of the Year’, trophies are awarded in to encourage ideas for improvement from ten other categories. The association has an employees through recognition and reward accreditation programme for suggestion schemes programmes. Below we look at how ideasUK and has awards for related communication and promotes staff suggestion schemes. marketing initiatives. It also has an annual Originally formed as a suggestion scheme unit benchmarking award and a recognition within the Industrial Society (now The Work programme which assists with the development of Foundation), the association became The United skilled evaluators. Kingdom Association of Suggestion Schemes in Research 1987. It changed its name to ‘ideasUK’ in 1998 to The association conducts an annual survey of reflect more fully the broad range of reward and members. The main results from the latest survey recognition programmes adopted by member are shown below: organisations to harvest employee ideas. Facilities ideasUK suggestion scheme survey 2005 An annual membership fee entitles members to attend up to ten networking meetings each year, Number of organisations 52 including a one-day conference to celebrate responding ideasUK National Ideas Day (in March). These Number of employees 781,636 provide opportunities for the exchange of represented knowledge and best practice and the ability to benchmark directly with other members. A central Number of ideas submitted 113,602 office provides advice and guidance, as well as Participation rate 14.5% information about forthcoming events. The members’ area of the ideasUK website contains a Ideas implemented 30,513 wide range of information covering all aspects of setting up and running a successful suggestion Implementation rate 27% scheme including best practice guidance, a library Overall savings £42 million of presentations and past papers, annual surveys and a discussion forum. Total awards paid £1.4 million For an additional fee, members can attend the Average clearance time 49 days annual conference, a two-day event in the autumn featuring keynote presentations, workshops and briefing sessions. The association also offers a Further information can be obtained from: number of training programmes. ideasUK, 52 Peveril Bank, Dawley Bank, Idea of the Year competition Telford TF4 2BZ ideasUK invites member organisations to submit 0870 9021658 their most successful ideas to its annual enquiries@ideasUK.com competition. The final judging takes place at the www.ideasUK.com These are likely to have paid for themselves organisations pay suggesters a percentage of the many times over by reducing the number of money saved or generated by their idea over a accidents involving animals on the county’s fixed period of time. In some cases, the level of roads. DML Group welcomes suggestions award is decided at the time, while in other relating to health and safety, particularly in view instances, suggesters are paid an interim award of the potential hazards posed by working with pending calculation of the precise savings nuclear material. following implementation. Quantifiable benefits Special awards Depending on a scheme’s objectives, ideas which At United Utilities, ideas that cannot be save money or generate revenue can often attract implemented but have intrinsic value are entered prizes of greater value than those awarded for into a monthly prize draw for £50 in Capital ideas with less easily quantifiable benefits. Many Bonds. Translink runs an annual prize draw8 i HR Study 812 • December 2005
  7. 7. Analysiswhich also provides a good opportunity to potential suggestions – is to invite staff to thinkpromote its scheme. up a name for it. Ivan Idea (Saffron Walden BS) and Milesbetter (Translink) were both suggestedGloucestershire Constabulary is considering by employees.introducing a prize to recognise the contributionof a small number of ‘serial’ suggesters who Sustaining interestconsistently submit high-quality ideas. Regular publicity helps to keep a scheme at the forefront of employees’ minds and to maintainCelebrating success participation levels. Ivan Idea operates on aA public celebration of success can help keep a quarterly cycle, which provides opportunities tosuggestion scheme in the spotlight. The highlight revive interest in the scheme at frequentof the BUPA IDEAS year for example is the intervals. Companies that operate continuousannual lunch, to which the suggesters of the 40 schemes have to take a proactive approach tobest ideas submitted over the course of the year keep the ideas coming in. At some companies,are invited. These finalists also receive a £250 such as United Utilities North West, anprize. On the day, the Chief Executive presents introduction to the suggestion scheme formsthe suggesters of the best eight ideas with a part of the induction process for new joiners. Ittrophy and a further £2,000. This event has been also profiles the scheme in its handbook fora great success and has given rise to a number of managers.welcome marketing opportunities. Otherorganisations may prefer to adopt a more low- Company magazines and newsletters are a usefulkey approach to recognising suggesters. means of illustrating how suggestions can comeNorthern Ireland Railways (NIR), a forerunner to fruition and some companies publicise schemeto Translink, used to invite successful suggesters award ceremonies through such channels.to meet members of its senior management team. However, it is important to strike the rightHowever, Translink decided to dispense with balance. A disproportionate focus on big ideasthis form of recognition as focus groups from can wrongly imply that smaller suggestions areNIR had suggested that employees had not valued.sometimes felt rather uncomfortable at the Time for a revampprospect. Over time, suggestions may dry up and this can be the signal to relaunch a scheme. A number ofPublicising schemes the organisations profiled in this study haveFrom launching a suggestion scheme right completely overhauled existing schemes andthrough to publicising award winners, the way a enjoyed a significant improvement inscheme is marketed has an obvious impact on participation levels as a result.the degree of staff involvement and, ultimately, Providing a focuson the number of good ideas submitted. Some companies promote their schemes by actively encouraging employees to think aboutScheme launches ideas for improvement in a specific area.The launch of a new suggestion scheme is Choosing topics which are closely aligned to anusually surrounded by a fanfare of publicity. organisation’s strategic objectives can improveMost organisations use a range of media to the chances of an idea being implemented.ensure it is promoted to the broadest possibleaudience. Features in company magazines anddedicated intranet pages are a popular and Sharing best practiceefficient means of achieving this aim. Eye- Many good ideas may well have broadercatching posters on themes of innovation can be application than was initially envisaged by theeffective in raising awareness. Companies that suggester. A number of departments at BUPA,employ staff across a large number of sites may for example, have taken steps to ensure ideas arealso arrange visits to key locations to promote adopted wherever they are relevant. Its careand launch a scheme. home division has set up a regional panel to consider ‘big’ suggestions, while BUPA hospitalsGive the scheme a name assess high-scoring ideas through a ‘virtual’A popular way of launching a new scheme – and panel consisting of staff drawn from a number ofgetting people to start thinking creatively about different roles.i HR Study 812 • December 2005 9
  8. 8. Suggestion schemes To help share best practice across the company, Revisiting past ideas administration of the Ideas Direct scheme at When new initiatives are launched, project United Utilities North West is expected to move teams often turn to suggestion scheme databases to see whether any previously rejected ideas to the company’s central performance and could now be relevant. Many organisations are efficiency group in early 2006. This unit has willing to re-evaluate and reward ideas some links with similar teams within each directorate time after the original submission if their of the organisation. circumstances change. Coming soon in IDS HR Studies IDS HR Studies regularly cover all the main areas of HR activity. Forthcoming titles include: ■ Employee recognition schemes ■ Coaching in the workplace ■ e-learning ■ Annual hours For a full subject list of all IDS HR Studies, go to the IDS website at www.incomesdata.co.uk and click on HR policy and practice. oon........Coming soon........Coming soon........Coming soon.......Coming soon..... I10 i HR Study 812 • December 2005

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