More Proposals, Thinner Returns? — A Case Study of Proposal Value Assessment and Tiered Rewards

1. Introduction: The "Value Collapse" Behind the Quantity Boom

Many companies implementing suggestion systems experience a period of "happy trouble": once the slogans are shouted and rewards are announced, suggestions pour in like snowflakes, with the number increasing year by year. At award ceremonies, everyone receives a prize, and the atmosphere is lively. However, behind the excitement, the finance department's mood darkens—suggestion reward expenditures rise annually, but the calculable economic benefits do not grow in tandem. In some cases, the more bonuses are distributed, the more the company loses.

The suggestion system is the entry point for a continuous improvement system, intended to harness the wisdom of frontline employees. However, when quantity becomes the only metric, the system subtly changes: employees pick easy suggestions, repeat the same ones, and submit suggestions just to meet the quota, while truly challenging cross-departmental issues and technical problems are left untouched. The company analyzed in this article spent a year rebuilding its suggestion value assessment and tiered reward mechanism, steering the suggestion system back onto the track of "calculating value" rather than "counting quantity."

2. Case Background: The "18,000 Suggestions" Dilemma of a Manufacturing Company

A manufacturing company primarily produces precision metal components, with approximately 2,800 employees and an annual output value of about 900 million yuan. Starting in 2023, the company implemented a company-wide suggestion system, setting up a "Golden Idea Award," with monthly selections and cash rewards. For each suggestion, a participation award of 20 yuan was given. The system was highly effective in the first two years: the number of monthly suggestions increased from 300 to 1,500, and the workshop was filled with employees coming up with ideas, which initially pleased the management.

By 2025, problems began to surface. The total number of suggestions for the year exceeded 18,000, and the cumulative total over three years surpassed 30,000. However, the annual quantifiable benefits calculated by the finance department were only about 1.1 million yuan, while the reward expenditures reached 760,000 yuan. Including the human costs of evaluation, awards, and promotion, the input-to-output ratio was less than 1.5 to 1. What further alarmed the management were two signals: first, repetitive suggestions were rampant, with the same "move the material rack forward by two meters" being repeatedly proposed by different teams on the same production line, a total of 14 times; second, high-value suggestions were scarce, with only less than 8% of the total suggestions involving process parameters, mold structures, and cross-departmental processes, while the majority were low-threshold suggestions like "labeling trash bins" and "marking the floor." The quality director frankly stated: "We are not collecting wisdom; we are collecting repetitive labor."

3. Problem Analysis: Four Hard Truths from 100 Sample Suggestions

The company did not rush to cut rewards but instead conducted a diagnosis. The implementation office randomly selected 100 suggestions from the entire year, dissecting each one, and uncovered four hard truths.

First, repetitive and quota-filling suggestions accounted for 30%. Out of the 100 suggestions, 31% were either identical or highly similar to historical suggestions, with many simply rephrasing last year's suggestions—since the participation award was still given, there was no loss in submitting them. Second, nearly half lacked quantification. 46% of the suggestions only stated "strengthen management" or "improve processes" without detailing the current losses or the potential benefits, leading to subjective scoring and "universal rewards." Third, the value distribution was severely imbalanced. Based on actual post-implementation benefits, only 17 out of the 100 suggestions generated quantifiable benefits, with one process-related suggestion contributing more than 60% of the total benefits—83% of the suggestions were essentially "zero-benefit participations." Fourth, the evaluation and reward system were disconnected. Reward amounts were primarily determined by the category of the suggestion rather than the value created; a mold improvement that saved 300,000 yuan and a site organization that saved 300 yuan might only differ by one reward tier, leading employees to quickly "vote with their feet": they avoided complex tasks and focused on easy ones.

The diagnosis concluded in one sentence: the system rewards "the act of suggesting" rather than "value creation." Without changing the evaluation and reward criteria, doubling the number of suggestions would only double the costs.

4. Mechanism Rebuilding: Four-Step Method for Suggestion Value Assessment and Tiered Rewards

The company spent three months designing and six months implementing a new mechanism with "clear evaluation criteria, tiered rewards, and feedback on results" at its core, consisting of four steps.

Step 1: Categorization and Standardization. Suggestions were divided into four categories: on-site improvement (5S, layout, poka-yoke minor improvements), process optimization (cross-departmental processes, forms, approvals), technical improvements (process parameters, mold structures, equipment modifications), and management innovation (systems, models, digital applications). Each category was evaluated and awarded separately to avoid "technical challenges competing with on-site organization." Clear boundaries were also established: simple issues were resolved through a rapid on-site channel, while complex issues were escalated to QC group projects or Six Sigma initiatives—thus, the suggestion system now had an "exit point."

Step 2: Value Assessment. A "tangible benefits + intangible benefits" dual-dimensional evaluation form was established. Tangible benefits were calculated using a unified formula: labor savings = improvement cycle time × frequency × labor rate, quality yield benefits = reduced nonconforming product count × unit cost, material savings = saved material quantity × unit price, and it was mandated that these calculations be jointly confirmed by finance and process engineers to prevent "guesswork reporting." Intangible benefits were scored on a five-point scale across three dimensions: scalability, innovation, and customer impact, used for ranking within the same category. The evaluation form was displayed for three days before the review meeting, allowing suggesters to appeal, ensuring fairness for all.

Step 3: Tiered Rewards. Rewards were directly linked to value: the participation award was retained but significantly reduced, covering only "adopted" suggestions; the achievement award was calculated as 3% to 5% of the first-year quantifiable benefits, with no upper limit, and the benefits were verified and distributed quarterly by finance. An additional annual "Major Value Award" was set up for suggestions that were cross-departmentally implemented and generated over 500,000 yuan in benefits. One rule had an immediate effect: repetitive suggestions, which had "no additional value," were directly excluded from evaluation, turning the cost of quota-filling from "positive" to "zero," naturally discouraging such behavior.

Step 4: Closed-Loop Operations. Monthly review meetings were held without fail, with the evaluation results and quantified benefits displayed on workshop boards and internal systems. Each quarter, a "Suggestion Value Ranking" was published, ranking by value rather than quantity. The evaluation standards were reviewed annually, with unclear benefit clauses being progressively tightened. Supporting actions included training team leaders in "value estimation," enabling frontline employees to roughly calculate the value of their suggestions before submitting them—clear calculations lead to accurate suggestions.

5. Data One Year Later: Quantity Decreased, Value Increased

The data one year after the new mechanism was implemented silenced those who opposed cutting the participation award. The total number of suggestions for the year decreased from 18,000 to 12,600, a reduction of 30%—but the adoption rate increased from 41% to 69%; the proportion of repetitive suggestions dropped from 31% to 6%; the proportion of technical improvement suggestions rose from 8% to 24%; the quantifiable annual benefits confirmed by finance increased from 1.1 million yuan to 5.6 million yuan; and the reward expenditure increased from 760,000 yuan to 1.12 million yuan, with the input-to-output ratio improving from 1.5 to 1 to 5 to 1. A more subtle change was in the atmosphere: past review meetings resembled "meat distribution," while now they resemble "auctions"—employees argue passionately over the attribution of a parameter improvement, and team leaders actively help their members calculate the benefits.

6. Three Key Takeaways

Reflecting on this transformation, three points are worth noting for other companies. First, the essence of a suggestion system is not "collecting ideas" but "making value visible, calculable, and accurately rewarded"—evaluation and rewards are the soul of the system, while quantity is just a surface metric. Second, transparency in standards is the prerequisite for fairness, and unified calculations are the foundation of trust. Once the evaluation form is displayed, employees' questions about "why he gets a higher bonus" naturally disappear. Third, the suggestion system should form a "continuous improvement ladder" with QC groups and Six Sigma projects: small issues are resolved on-site, and major issues are escalated to projects; otherwise, suggestions will always remain in the shallow waters of "labeling and marking."

The effectiveness of a suggestion system is not measured by the number of suggestions posted on the wall but by the additional amount on the year-end financial statement. By changing the rewards from "those who suggest" to "those who create value," company-wide improvements can truly move from being a spectacle to being effective.

One-sentence summary: The suggestion system should reward "value creation" rather than "the act of suggesting"—using a unified value assessment and tiered reward system, it can steer company-wide improvements from counting quantity to calculating value.

Knowledge code: 5.1.2

Version: v20260901

Author: QTank QTank is dedicated to providing systematic professional knowledge, methodologies, and practical tools for quality management practitioners, helping companies continuously enhance their quality capabilities.