Quality manuals advise that cash spoils the spirit of employee-recognition programs. But Bill Mork found out that not every company behaves like the examples in books. When he set up a program to reward employee suggestions at his company, Modern of Marshfield, a furniture manufacturer in Marshfield, Wis., the program failed. When he adapted it to real life instead of going by the book, Mork turned the program around.
In 1988, after he attended a seminar on quality and visited Milliken & Co., a quality avatar, Mork set up a suggestion program at Modern. Each month, company managers reviewed all the suggestions that had been implemented and named a "colleague of the month." The honoree got a special parking space and a handshake in front of the assembled company -- but no cash. Suggestions trickled in. Within a few months one colleague of the month begged Mork never again to embarrass him that way. His friends were calling him a brownnose.
So Mork revamped the whole program, injecting cash into every step. Now whenever an employee makes a suggestion that the company implements, he or she gets 10% of the estimated savings realized because of the change. Another 10% goes into a fund distributed at the end of the year to all employees who have made useful suggestions. Each month the names of all who have made an implemented suggestion are eligible for a drawing for prizes ranging from T-shirts to TVs.
The suggestions are still the primary source of candidates for colleague of the month, but now a panel of the previous six winners makes the selection, not managers. The colleague of the year wins a trip for two to a fancy locale.
During the first year of the new suggestion program, though sales dropped, profits rose. Since then, sales have nearly doubled, to $8 million. Last year the company's 100 employees submitted 1,200 suggestions. Mork happily dispenses $10,000 in prizes annually, and he claims a fivefold return in savings realized from suggestions. A recent idea to make swatch books from scrap fabric saved an estimated $10,000. But that's extraordinary; Mork calls $500 in savings an excellent result.
"Our people got a whole different attitude when they saw someone walk up to get a check," Mork says. "Suddenly, the winner became someone who could buy a round of beer." Not a brownnose.* * *