BOSTON — `IF I'm in a room with 10 people and ask them which would they rather have, cash or noncash [awards], they will generally say cash," Gary Allen says. "But that's the wrong question."
According to the Southfield, Mich.-based Maritz Motivation consultant, the right question is: What's the best way to encourage employee participation in suggestion programs?
Mr. Allen, who advises companies on suggestion systems, says noncash awards have proved the most effective method.
It's what he calls the "you can't ride half a bicycle" syndrome. If an employee earns cash for his idea, the money is often frittered away with no tangible benefit. However, if he earns 50 points for a suggestion and needs 100 to win, say, a bicycle, he has to come up with another idea.
The "total quality management" movement of the 1980s swept away many of the traditional award systems in companies. This new philosophy held that improvements and suggestions should become an integral part of an employee's job and not require special recognition. Many companies, however, have found that incentives help to sustain employees' interest in the improvement process.
Even in the early days of employee input, awards were key. In 1928, Frank Risso, the chauffeur of the founder of Bank of America, came up with one of the most successful ideas ever. He suggested to his boss that the bank issue travellers' checks "to accommodate those customers who are thinking of touring the state [of California]." Risso gained $1 for his idea.