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1. Employees should be rewarded on percentage basis instead of giving them a flat amount. It would be preferable to reward them a percentage in the range of 2% to 5% out of the total profit earned in the first 3 years, if profits are earned due to their suggestion.
2. It would be preferable to prefix a limit on the reward given to employees on implementation of their suggestion. The total reward paid in the first three years should not exceed the maximum limit of preferably $10,000.
3. Rewards should be given annually as and when earnings are realized out of the suggestion. Paying the amount in full on acceptance of the suggestion would be very risky since there are high chances that the suggestion might not be as profitable as anticipated.
4. Rewards should be distributed on an equal ratio basis. The total reward calculated on a specified percentage as above should be divided among each employee combining on a suggestion, equally.
5. Rewards should be decreased by a certain percentage if those suggestions are accepted which are not original and have already been applied in other organizations. An annual percentage of 1% and an overall limit of $5,000 should suffice for such suggestions.
6. The suggestion system is already an incentive for employees to contribute more and participate in the affairs of the company. An ‘impetus award’ for recognizing suggestions which hasten the company’s initiated actions would be an extra burden on the management. It should not be implemented.
7. Written rules or written terms and conditions would be quite advantageous for the company. It would help in avoiding future conflicts, misunderstandings and confusions among the management and staff.
8. Each employee should be required to sign the rules form before they provide a suggestion. This shall allow the staff to have a clear view and understanding of the suggestion and the corresponding reward system. The management shall also have a written proof that there was no conflict of interest when the employee gave the suggestion.
9. Employees should be allowed to provide suggestions only for their respective fields. This shall encourage them to concentrate more on their areas of expertise rather than on other departments.
10. Marketing and Financial Policy should be excluded from the suggestion system. Both of these fields require extensive research and analysis and it would be better for the management to have them under their control. They can be made open for suggestions only when a deadlock ensues.
11. A team or committee should be formed which shall evaluate each suggestion and calculate the rewards to be given. The team should be given full authority to accept and follow-up on suggestions and given responsibility to deal with any conflicts.
12. Dropping the suggestion system would be financially favorable for the company however; having such a system shall enable increased employee participation and motivation. It is a form of an incentive scheme which can encourage employees to work and contribute more towards the organization. The company also has the benefit of receiving suggestions from within the organization instead of seeking external help, which may be even costlier.
