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A big problem with most employee-suggestion systems is that the financial rewards, if they exist at
all, are unrelated to the value of the suggestions. Without much incentive to find better ways to do things, many employees lose interest in
trying. Not so at Peavey Electronics Corp. The Meridian, Miss., company pays hourly workers 8% of the estimated first-year labor and
materials savings that result from their ideas.
Peavey, which makes amplifiers and guitars, used to have a more conventional system, rewarding suggestions with $25
to $100 bonuses, vice-president Melia Peavey explains. Paying for savings instead, she says, generates more excitement.
For each suggestion, the company projects the savings in a cost study. Then it pays the employee his or her
percentage up front-a minimum of $15, with no maximum. "We give them the benefit of the doubt," Peavey says.
Salaried workers aren't included in the program. "Saving money is part of their jobs," she says, "and we
don't want supervisors competing with hourly employees."
In 1988 hourly workers earned a combined total of $43,857 for their ideas. The biggest check - $1,331- went to a
machinist who figured out how to reduce the amount of maple scrapped by the neck-carving machine.
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