Viewpoint: The Best Way to Reward Employees for Sharing Good Ideas

By Aichia Chuang, Greg R. Oldham, Jing Zhou and Ryan Shuwei Hsu May 26, 2023

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Companies can increase not only the volume but also the quality of employee suggestions and ideas by offering rewards and a choice, according to a study we published in 2022.

We conducted the study on 345 employees working at a call center in Taiwan, which already had a suggestion program set up to solicit creative ideas to improve the organization. The company rewarded those who suggested ideas deemed the most valuable by giving them a trophy.

We wanted to see how tweaking the reward changed the quantity and quality of suggestions. So we invited the employees to submit ideas and that if their suggestions ranked among the top 20 percent most creative ideas—as evaluated by a team of managers and researchers—they would receive one of four rewards: US$80 in cash for themselves, $80 to share with colleagues, $80 to give to a preferred charitable organization or the ability to select specific days off. About half of the employees were offered a choice of the four rewards they would receive for submitting ideas. We then randomly assigned one of the four rewards to the remaining employees.

In total, we received and evaluated 144 ideas over a one-month period, and found that employees who were given a choice of reward submitted 86 percent more ideas than those who were told what they would be getting. Moreover, the average creativity score of their ideas was 82 percent higher. Overall, our suggestion program elicited double the number of ideas as the company's own program and resulted in ideas that were ranked 84 percent more creative.

Why It Matters

Soliciting employee ideas can be a key driver of innovation in organizations. When employees share their ideas about products, services or policies using a suggestion program, an organization can take those ideas and refine and implement them. These implemented ideas can then enhance an organization's ability to adapt and compete. A 2003 study of 47 organizations found that ideas submitted to employee suggestion programs saved those organizations more than $624 million in a single year.

Our own study suggests small incentives could have a significant impact on the quantity and quality of those employee suggestions.

What's Next?

Research is still needed on whether there is an optimal number of rewards that organizations should offer to get more submissions. One past study found that when employees were asked to choose from a large set of rewards, they felt overwhelmed and produced few ideas.

Future research can also test whether our results can be found in other types of organizations, with employees in other types of jobs and in other parts of the world.

Aichia Chuang is a Professor of Organizational Behavior at the University of North Carolina – Greensboro. Greg R. Oldham is  Professor emeritus at Tulane University in New Orleans. Jing Zhou is Deputy Dean of Academic Affairs and Mary Gibbs Jones Professor of Management at the Jones Graduate School of Business at Rice University in Houston. Ryan Shuwei Hsu is an Associate Professor in the Department of Business Administration at National Chengchi University in Taipei City, Taiwan.

This article is adapted from with permission. ©2023. All rights reserved.



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