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PERSONNEL MANAGEMENT - CAN THEIR IDEAS HELP YOUR BUSINESS?
September 2009
Sainsbury’s recently asked its employees to suggest ideas on how it could improve business. But these schemes are not just for big boys. So what are the advantages and how do you set one up?
Don’t pay for it
Why pay an expensive consultant to tell you how to improve your business when you have easy access to free in-house advice from your own employees? It makes sense to approach them first. So, how do you go about introducing a staff suggestion scheme into your workplace?
What should you include?
First of all, you need to decide which areas of your business can staff offer positive suggestions on. You should make this as wide as possible. Suitable areas could include:
· Working processes and procedures
· Income generation
· Sales and marketing initiatives
· Improvements to Health & safety
· Customer services
· Communications and publicity
· Environmental and quality initiatives
What should you exclude?
Steer clear of certain topics, such as employee pay and conditions of employment! These are contractual matters and are not suitable for debate in this type of forum. If the employee has suggestions in these areas, they should raise them another way, e.g. during an appraisal.
Trap. If you don’t spell this out, your scheme may get clogged up with suggestions that will only be in your employees’ interests.
Open to all
Your scheme should be open to all employees on equal terms. Don’t exclude individuals or set eligibility criteria. This is a scheme, not a bonus system, so you must consistently and fairly otherwise it will be discriminatory.
Add an incentive
To tempt employees in you could offer an “encouragement award”. It’s paid as a “thank you” when an idea is suggested.
Tip 1. If you limit the encouragement award to as maximum of £25, your employee won’t have to pay income tax and NI on it. Plus, you won’t have to keep any specific paperwork for the Taxman.
Tip 2. Make it clear that any suggestions which come within the remit of an employee’s normal responsibilities and duties won’t qualify.
Tip 3. The payment should be “discretionary”, ie. you have the right not to pay it. If you don’t make this clear the employee may try to argue that it’s a contractual entitlement.
Note. We will be looking at the tax advantages of staff suggestion schemes in a future article.
Tell them it’s there
Finally, make sure your staff know about the scheme. Put details on your intranet or notice boards and reinforce its existence with periodic reminders.
Employees can come up with suggestions which are as good as, if not better than, expensive consultants. Any ideas should be outside their normal job remit. You can pay up to £25 tax-free to encourage ideas. Don’t place restrictions on who can apply – it must be open to all staff or it could be discriminatory.
Source: Tips & Advice Personnel 17 September 2009
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