Choosing the Right Suggestion Scheme
There are two main types of suggestion schemes, a centralised or a decentralised scheme. Some organisations operate both models successfully.
In organisations where there is a hierarchical management structure in place a centralised suggestion scheme is often the most appropriate system.
How it operates
- A centralised Suggestion Scheme office, with dedicated staff, will receive and process all suggestions.
- Suggestions are submitted directly to the Suggestion Scheme office, or are passed through line management for validation purposes.
- Suggestions are acknowledged and allocated to specialist evaluators for investigation.
- Evaluations should be carried out within a specified time scale usually 2-4 weeks.
- The suggestor should be kept informed of the progress of the suggestion.
- The evaluator will recommend whether the suggestion will be accepted and implemented or not and may make recommendations as to the level of award to be paid or this may be assessed by a committee or panel established to consider all suggestions.
- The scheme administrator will issue the reply to the suggestor.
In a decentralised scheme the suggestor passes the suggestion to the immediate line manager who may be responsible for evaluating and implementing, or there may be other local arrangements.
- The line manager may need to consult with relevant specialists during the evaluation process.
- Line managers act as coach and facilitators of ideas for improvement.
- The suggestor is encouraged to become involved in the development and implementation of the suggestion therefore retaining a stronger degree of ownership.
- Ideas that have a wider application are sent to the Suggestion Scheme administrator, thereby tying into the central scheme, or referred to more senior management for wider application and implementation.
- Evaluation turnaround times can be shorter in a decentralised scheme.
It is important to understand that both centralised and de-centralised programmes require a ‘driver’ and active support from the top of the organisation. The most common cause of failure is lack of correct processes and commitment to the management and implementation of ideas.
The same basic elements are required regardless of the type of suggestion scheme deemed best suited to the culture and size of the organisation.
- Location of scheme – Identify who in the organisation will be responsible for the administration of the programme and maintaining the momentum
- Manpower requirements – When launching a scheme the anticipated workload is difficult to estimate and this will depend on the size of the organisation. However, it is crucial that there is sufficient resource to ensure efficient processing of ideas. If this is not the case backlogs will occur and cause loss of credibility for the scheme.
- Rules – The rules of the scheme should be kept to a minimum but must be clear and communicated to all employees.
- Inland Revenue Tax Statute – Organisations setting up a formal suggestion scheme can register under the Inland Revenue Statute and thereby make tax-free awards.
- Submission procedures – Consider how ideas will be submitted; approved form, either hard copy or electronically, face to face, telephone. All ideas should be logged.
- Duplicate ideas – Establish a policy on duplicate ideas.
- Awards and Recognition – It is important that any awards structure is equitable and details made available to all employees who should be recognised for their contribution and involvement.
- Appeals – An appeals procedure should be established to enable a suggestor to make representations if they feel their suggestion has not been fully understood or given proper consideration.
- Publicity – Before launching (or re-launching) a suggestion scheme decide on a publicity campaign which should be incorporated within the marketing plan.
- Processes and record keeping – It is important to consider at the outset how the information relating to the suggestion scheme is going to be recorded to enable effective management reporting on the outcomes of the business plan.
- Evaluating the programme – Regular evaluation of the programme is essential to identify strengths and weakness. IdeasUK offers an accreditation programme for your scheme. Contact us for more details.