Innovation and continuous improvement only happen through one essential asset: people. But to create processes and structure ways for people to innovate, companies can rely on specific tools designed to implement and manage innovation. One of these tools is the employee suggestion scheme.
The concept of an employee suggestion scheme does not have a single, precise origin. It can be associated with suggestion boxes, idea programs, and intrapreneurship programs.
Beyond being closely related concepts, all of them share the same core purpose: generating new ideas.
In this article, you will understand the value and benefits of an employee suggestion scheme for industrial companies, and how to structure one that drives continuous improvement and operational excellence.
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What is an employee suggestion scheme?
An employee suggestion scheme is an innovation and continuous improvement resource designed to collect insights from employees in order to identify opportunities and solve business problems. These ideas may address improvements in existing processes, products, and services, or they may lead to the creation of entirely new solutions.
From a historical perspective, idea-generation practices became more popular after World War II. Over time, the number of ideas inside organizations began to increase, creating new management challenges.
When properly structured, an employee suggestion scheme works as a continuous and manageable process, moving from ideation to the implementation of innovation projects.
By turning valuable ideas into real initiatives, a company can achieve its corporate goals while gaining several benefits, such as stronger competitive advantages, higher employee engagement and satisfaction, and better customer satisfaction.
In short, market needs to generate ideas. Those ideas then guide development, research, and marketing actions that ultimately reach the market itself.
Within this cycle, everyone understands the potential and importance of innovation in creating change not only inside a company, but also across an entire market niche. When a market is challenged, it needs to innovate to remain relevant and competitive.
How does an employee suggestion scheme and idea program work?
To better understand what an idea program is and how it works, it is important to look at the steps required to implement an innovation strategy based on ideas and suggestions from employees.
In practical terms, an employee suggestion scheme creates a formal path for employees to submit ideas, managers to evaluate them, and the company to implement the suggestions that generate real value. To see how ideas move from submission to implementation, explore the innovation funnel.
A well-structured program usually includes:
- Clear goals aligned with business strategy;
- A simple process for submitting ideas;
- Evaluation criteria for selecting the best suggestions;
- A defined approval workflow;
- Recognition or rewards for employees;
- Tools to monitor ideas from submission to implementation.
Once the concept is clear, it becomes easier to understand the different types of employee suggestion scheme models.
What are the main employee suggestion scheme models?
When discussing employee suggestion schemes, there are two main approaches that still influence innovation methodologies today.
These approaches are commonly known as the Western model and the Eastern, or Japanese, model.
As mentioned earlier, the post-World War II period played an important role in the adoption of suggestion programs. However, that does not mean suggestion systems were not already being developed before that time.
Western model
The Western model, also called the traditional or North American approach, is strongly characterized by its focus on encouraging idea generation through economic rewards.
The way the reward is calculated may vary. Depending on how the system is structured, it can be a predefined amount or a percentage of the gains the company will obtain after implementing the idea.
The process in the Western model starts with idea analysis. Suggestions are reviewed to determine whether they can bring benefits to the company.
After this analysis, the idea is approved and authorized by the appropriate management level. At this stage, it is important to assess both technical and economic feasibility. In other words, the company considers the investments required and the expected returns from the idea.
In this model, the priority when selecting ideas is the benefit they can generate. For this reason, innovation management must provide tools capable of measuring and ranking the main benefits.
Selected ideas are then implemented as innovation projects, with a defined plan. Resources, goals, and deadlines are established so the idea can generate measurable results.
Because idea generation is more controlled and employees are encouraged to take the initiative in exchange for financial rewards, the Western model can often be managed with less operational complexity.
This also means that these systems can be implemented even without being deeply connected to the company’s broader management model.
Eastern or Japanese model
The Eastern model, also known as the Japanese approach, is mainly characterized by the voluntary contribution of all employees.
Unlike the Western employee suggestion scheme, which tends to focus on financial incentives, this model often uses symbolic rewards designed to reinforce and improve internal processes.
Because it does not prioritize only ideas that generate immediate financial results, the Eastern model can still produce strong economic outcomes over time.
That happens because this model is rooted in the philosophy of Kaizen Teian. In Japanese, Kaizen means continuous improvement, while Teian means proposal or suggestion. With the participation of all employees, the Eastern model seeks to create a positive environment for solving routine problems.
In Kaizen philosophy, the greater the participation, the greater the accumulation of knowledge.
A suggestion becomes the starting point for putting Kaizen into practice through the activities carried out by the group.
This approach requires quality control practices that can bring Kaizen philosophy to life. Above all, it requires an incentive for participation and collaboration among employees.
Continuous innovation in the Eastern model, guided by the Kaizen Teian philosophy, goes hand in hand with improving the internal work environment.
Examples of employee suggestion schemes
To understand how innovative ideas generated through an employee suggestion scheme can directly impact results and company culture, it is useful to look at examples from organizations with international relevance.
Toyota
Toyota is one of the best-known examples of a company that has embedded employee ideas into its continuous improvement culture. Its Creative Idea Suggestion System is closely connected to the company’s Kaizen mindset and has been used to encourage employees to propose improvements in their own work. Toyota has described this system as a long-running initiative that helps foster Kaizen talent and keep ideas flowing across the organization.
This kind of model shows how an employee suggestion scheme can go far beyond occasional idea collection. When practice becomes part of the culture, employees are encouraged to continuously identify problems, suggest improvements, and contribute to operational excellence.
3M
3M is another strong international reference in employee-driven innovation. The company is known for its “15 percent culture,” which encourages employees to dedicate part of their working time to pursuing new ideas and problem-solving initiatives. According to 3M, this culture has existed since around 1948 and has contributed to several important innovations.
Although this is not a traditional employee suggestion scheme in the strictest sense, it demonstrates the same underlying principle: companies innovate more effectively when they create space, structure, and permission for employees to explore ideas.
Ajinomoto
Ajinomoto is a global group operating in food, amino acids, agribusiness, food services, animal nutrition, and the pharmaceutical industry. The company’s global website presents the group as serving customers worldwide through a broad range of products and solutions.
In the original AEVO Innovate case, Ajinomoto already had an idea and suggestion program, but it did not have the support of a dedicated platform. By using AEVO Innovate’s innovation management platform and its idea program module, the company improved the structure of its program and achieved stronger results, including more submitted ideas, more implemented ideas, greater transparency in selection and implementation processes, and higher employee engagement.
These examples show that an employee suggestion scheme can generate value across different fronts: financial return, time optimization, cost reduction, internal transparency, and employee engagement.
How to create an employee suggestion scheme
The ideal model for an employee suggestion scheme is not the same for every company. Each organization needs to analyze its internal culture before defining the structure of the program.
This analysis helps identify which approach is most aligned with the company’s business model and organizational dynamics.
In general, to create an employee suggestion scheme, it is important to define the following aspects:
Program objective
The objective of the idea program must be aligned with the company’s strategy.
Whether the organization chooses a Western or Eastern model, the program needs to support clear business goals. These goals may include reducing costs, improving processes, increasing productivity, improving customer experience, strengthening innovation culture, or developing new products and services.
Rewards
Rewards, whether financial or symbolic, are important for personal engagement.
The engagement techniques used, such as achievements, prizes, recognition, or ranking systems, must be aligned with employee expectations.
Some companies may benefit from financial rewards linked to measurable business results. Others may see better outcomes through public recognition, career development opportunities, badges, symbolic awards, or participation in innovation projects.
Participants
It is important to understand whether the idea program will generate better results based on the number and profile of participants.
Western models tend to restrict ideas and prioritize more qualified participants or ideas with stronger economic potential. Eastern models, on the other hand, seek to involve as many employees as possible, regardless of role or qualification level.
The best choice depends on the company’s maturity, culture, goals, and internal capacity to evaluate and implement ideas.
Approval workflow
The system must allow suggestion approval according to the company’s reality.
Some models, especially more traditional ones, require approval from senior leadership. Other models allow managers and team leaders within the organization to have autonomy to approve and implement the ideas generated.
A clear approval workflow prevents good ideas from being lost, reduces delays, and makes the process more transparent for everyone involved.
The rules of the employee suggestion scheme should be structured according to what can generate the best results for the company. Another important point is flexibility.
An idea program evolves as its rules evolve, following the progress of the company’s own innovation culture.
How to come up with good ideas
Innovation creates answers to business and market challenges. As explored throughout this article, the best ideas often come from people inside the organization.
To generate good ideas for the company, employees can follow a few practical tips:
- Look at the problems you face in your daily work and think about possible solutions. Then, submit those solutions through the company’s employee suggestion scheme.
- Identify how a process connects strategically with the company’s goals and how it could be optimized. This can generate valuable insights.
- Talk to people from different departments to better understand different challenges across the organization. For more practical guidance, see these best practices to generate business improvement ideas.
- Organize brainstorming meetings to explore problems and opportunities collectively.
For managers, a good practice is to look for methodologies and training initiatives that can be applied with employees.
It is also important to preserve a participatory culture, where everyone has a voice and everyone understands their importance in the innovation process. Learn how to build a continuous improvement culture that sustains engagement.
Using tools that support the employee suggestion scheme can also make the innovation process more organized, transparent, and scalable.
In addition, companies should create reinforcement actions, recognize employees, and reward the best ideas. When employees see that other people in the company made a difference through innovation, they are more likely to participate and engage with the program.
Structuring your employee suggestion scheme with AEVO Innovate
For a company to have an employee suggestion scheme that generates results and contributes effectively to innovation, there are challenges to overcome. The biggest one is usually managing the idea program itself. To track whether your program delivers results, follow the right KPIs for idea management.
Not every management team is prepared to handle idea generation in an organized and effective way.
With AEVO Innovate’s platform solutions, industrial companies can implement and manage different models of idea programs. The company gains access to a responsive platform, available on mobile and desktop, designed to make participation easier for all employees.
See how a dedicated idea management software supports the whole process.
The solution enables faster analysis, approval, and implementation of ideas, supporting different employee suggestion scheme models.
As an end-to-end, AI-powered platform, AEVO Innovate keeps the innovation strategy aligned with the business, offers a complete experience for innovation management, and helps leaders measure ROI across every business unit.
Beyond the idea program, the software enables integrated use of its solutions. Managers can turn selected ideas into innovation projects and, if desired, use an open innovation module that allows the company to interact with the innovation ecosystem.
Conclusion
Once companies understand the importance of an employee suggestion scheme, they can act in a more organized and strategic way, ensuring that good ideas are not lost over time or scattered across disconnected spreadsheets.
A well-structured program allows people across the organization to innovate and build valuable solutions for both the present and the future.
Frequently Asked Questions (FAQ)
What is an employee suggestion scheme?
An employee suggestion scheme is a structured innovation and continuous improvement resource that lets employees submit ideas so the company can identify opportunities and solve business problems. In industrial companies, a well-run employee suggestion scheme turns everyday shop-floor insights into measurable improvements in processes, products, and services.
What are the benefits of an employee suggestion scheme for industrial companies?
A well-structured employee suggestion scheme strengthens competitive advantage, increases employee engagement and satisfaction, and supports operational excellence through continuous improvement. It also creates a transparent, manageable path from idea to implementation, helping leaders measure ROI and avoid losing valuable ideas in disconnected spreadsheets.
How do you structure an effective employee suggestion scheme?
Start by aligning the program with your business strategy, then define clear submission and evaluation criteria, a transparent approval workflow, and recognition or rewards for contributors. Choosing between a Western (reward-driven) or Eastern (Kaizen, participation-driven) model depends on your culture, and an end-to-end platform such as AEVO Innovate makes the scheme easier to manage, measure, and scale.
