Case 10.2: Implementing an Employee Innovation Program

Purpose:
The purpose of this case is to develop an effective program to encourage employee innovation.

Situation:
You've been asked to advise a manger in a local manufacturing plant about how to implement an employee suggestion system. The manager is under "orders" to develop this system because the president has just toured another plant that has an "effective" suggestion system.

Background:
The manager provides you the following history:

We've tried this twice before and it never really worked. The first program started about five years ago and was called the Performance Improvement Program or PIP. Employees were informed about the program and were shown how to fill out the necessary form. The main problems were:

• Many people came up with the same ideas.
• At first, the PIP coordinator had too many ideas to deal with, and there was no feedback about what happened to the ideas after they were submitted. Employees were rewarded for just coming up with the ideas.
• There was no qualifier on the payoff-it didn't seem to matter how an idea impacted the business because employees still got rewarded equally with dinner certificates or movie tickets.

  In the long run, the whole program slowly disintegrated through apathy. Then we went to a quality seminar and completely revamped the program. That's when I started working here. The new system was called Error Cause Removal (ECR) and was focused on resolving chronic problems. Based on our seminar, we decided to eliminate all incentives and just make the ECR part of the job. It sounded great in theory, so we asked the supervisors to administer the program. But we did have some problems with this program, as well, such as:

• Employees really resented not having any incentives, so many didn't participate. These "stupid" little rewards were part of the culture.
• The employees who did participate developed a "We bitch, you fix" attitude-they didn't feel that they had to do anything to implement their ideas.
• Supervisors felt overwhelmed with the new responsibility and many never acted on the ideas. They never bought into the program and few employees received feedback about their ideas.

• It was a paperwork disaster—the amount of detailed documentation required was overwhelming to everyone.

These are the lessons I've learned from these incidents:

• We need to respond to people and their ideas.
• The program must be simple to administer.
• It needs to empower employees to work on the solutions.
• Administrators must want to be involved in the program.
• There needs to be some kind of incentive built in to the program.

Our new program is called Novel Ideas For the Future (NIFF) and will be based on the following:

1. We will provide training in such areas as problem-solving skills and plant systems for the departments involved in the program.
2. Every employee will receive a response within 72 hours of his or her suggestion, with a response that says either:
   • No
   • Yes, we'll do it immediately
   • Yes, we'll do it when we are able
3. The incentives will be based on the number of ideas: if an employee has 10 ideas, he or she will get a flashlight, 25 ideas will earn a dinner for two, whether or not the idea is implemented.

This is a sketch of the NIFF program so far. What I want to know is:

1. Have we analyzed the problems effectively?
2. Are we proceeding correctly?
3. What should we be doing?

Objectives:

1. Specify the precise response you would make to the manager
2. Specify the approach you would use in presenting your reactions to the manager.
3. Provide the rationale for the approach and proposal.