DOCUMEr RESUME

07990 - [ C33b6453

The Federal Rmplo.~ee Suggestion System: Possibilities forImprovement. FPCD-78-73; B-156022. November 8, 1978. 25 pp. + 8appendices 13 (pp.) .

Report to Alan K. Campbell, Chairman, Civil Service Comaission;by H. L. Krieger, Director , Federal Permonnel and CompensationDiv.

Issue Area: National Productivity: Evaluation of Productivityimpact of Federal Personnel Policiese, Pr:cedur.s, andControls (2904).

Contact: Federal Personnel and Compensatiov Div.Budget Function: General Government: Cent-al Personnel

Management (805).Orqanization Concerued: Department of the Air Eorce; Departsent

of the Aray; Department of the Treasuzy; LeFartuent ofDefense; Department of Housing and Urban DeveloFsent,Environmental Protection Agency; Postal Service; VeteransAdministration,

Congressional Relevance: House Committee on Post Office andCivil Service.

Authority: Governsent Emplcyees' Incentive Awards Act o' 1954 (5U.S.C, 4501). 5 U.S.C. 4506. 5 U.S.C. 45. =5 C.F.R. '4S1.

The Incentiv2 Awards Programe' objective is toencourage civilian employees to contribute to the efflciency,economy, or other areas of Government operations by recognizingand rewarding them for exceptionally meritorious achievements orsaqqestions. Findings/Conclusions: The full benefits of aneffective employee suggestion system are not being realized byFederal agencies. Pronounced support of a suggestion systemalone does not guarantee its effectiveness. many managers and

smployees lack enthusiasm for the system, and relatively fewemployees contribute suggestions. Persistent probleps prevailbecause no single office with the authority to act has directedaqencies to aggressively impleuent the system. Recomsandations:The Chairperson of the Civil Service Cosmission, and thesuccessor, the Director of the Office of Personnel Manageeent,Eih;ld direct aqency heads to develoFp lans for, aniaqqressively implement, an effective employee suggestion systemf+ ou ;h: active maa.ogeae;tt commitment and support, clearlydefi±s w9:ls, adequ:ate organization and staffing, constructiveaction on eiaqqestor;s !*-bmitted, and realistic evaluation of thesystem's op*;':a+ions %r`j risults, The Chairperecn/Director shouldalso require tiat aqency plaus be reviewed by thecosmissionf/ffice and ohoold suspend an agency's authority togrant awards if the agency's plan is not administered inaccordance with the Commission's/Officers guidance. (Author/SC)

v-REPO 1 BY' THiiE U S.

General Accounting Office

The Federal Employee SuggestionSystem--Possibilities For Irnprovement

Fet(diel idj!::t1s iil,; not realizin t the tuli t,)nPfits thalt c:atl ht? aciieved hihrough ani effectivemrnIl oyee sugestiol sysente.

-)ei-sistc ! 1(i)OieiflS fevaii bCc!ause 10o single

>tfic6, with the authority uo act haiS dieCtCidaj!encis to ag:gressilt implement the sys

i,+e '.:!.:i; Servie] (t Colm.l!ission and its suLccessor, the Office of Pers:)nnei Manlage.nent,shol ( hti -ldc a1ge:1cies accountab)le for aqgressivel¥ :mil:)'!t;'ltitlnq an elfective system.

, S

N.u \ t :} FFPCD-78-73

-'l( '(-'O1; ~4 ~ x" NOVEMBER 8, 1978C. !11;

UNITED STATES GENERAL ACCOUNTING OFFICEWASHINGTON, D.C. 20548

FEDERAL PERSONNEL ANDCOMPENSATION DIVISION

B-156022

The Honorable Alan K. CampbellChairman, U.S. Civil ServiceCommission

Dear Mr. Chairman:

This report summarizes our study of the Federal employeesuggestion system and pocssibilities for its improvement.

We have included recommendations to you on pages 24 and25. As you know, section 236 of the Legislative Reorganiza-tion Act of 1970 requires the head of a Federal agency to sub-mit a written statement on actions taken on our recommendationsto the House Committee on Government Operations and the SenateCommittee on Governmental Affairs not later than 60 days afterthe date of the report and to the House arid Senate Committeeson Appropriations with the agency's first request for appro-priations made more than 60 days after the date of the report.

We are sending copies of this report to the Director,Office of Management and Budget; the Chairmen, House andSenate Committees on Appropriations, House Committee on Gov-ernment Operations, and Senate Committee on Governmental Af-fairs; and the heads of departments and agencies included inour study.

Sincerely yours,

H. L. KriegerDirector

GENERAL ACCOUNTING OFFICE THE FEDERAL EMPLOYEEREPORT TO THE CHAIRMAN, SUGGESTION SYSTEM--CIVIL SERVICE COP-MISSION POSSIBILITIES FOR

IMPROVEMENT

DIGEST

The Government Employees' Incentive AwardsAct of September 1, 1954 (5 U.S.C. 4501),established the Incentive Awards Program.The Program's objective is to encouragecivilian employees to contribute to theefficiency, economy, or other areas of Gov-ernment operations by recognizing and re-warding employees for their exceptionallymeritorious achievements or suggestions.But the full benefits of an effective em-ployee suggestion system are not beingrealized by Federal agencies.

In the 39-month period ended September 30,1977, the system realized over 168,000 sug-gestions resulting in over $457 million intangible benefits. However, the systemcould contribute much more.

--Employees long have been encoLraged toserve beyond their job req;lire.,tents bysuggesting ideas contributing to the in-creased productivity, efficiency, economy,or other improvement of Government opera-tions.

-- The Civil Service Commission has issuedextensive guidelines and regularly pub-licized achievements to encourage agenciesto implement the system effectively.

--Agency heads have voiced their support ofthe system.

--The President personally has presentedawards to suggesters of ideas consideredparticularly significant.

Pronounced support of a suggestion systemdoes not guarantee its effectiveness; man-agers at all levels and employees must par-ticipate. Yet, many managers and employees

ar Abth. Upon removal, th! reportcover date should be noted hereon. i FPCD78-73

lack enthusiasm for the system; relativelyfew employee3 contribute suggestions; and insome agency activities, the system is prac-tically lifeless. Why? Because of commonproblems that are well known. The systemlacks:

--Active management commitment and support.

--Clearly defined goals.

-- Adequate organization and staffing.

--Aggressive implementation.

-- ConstrUctive action on ugqges~tions sub-mitted4.- ..

-- Realistic evaluation of the system'soperations and results.

GAO believes these persistent problems con-tinue to prevail because no single officewith the authority to act has directed agen-cies to aggressively implement the system.Although the Civil Service Commission hasprovided guidelines and disseminated infor-mation in accordance with its statutory re-sponsibilities, it has not had the authorityto enforce the system.

The President has determined that responsi-bility for productivity improvement withinthe executive agencies would b= most appro-priately assigned to the Civil ServiceCommission or its successor, the Offic4 ofPersonnel Management.

To discharge this responsibility, the Tn,,,mission/Office must hold agencies accoLnt-able for effectively implementing the sug-gestion system to encourage employees tosubmit their ideas. This seems reasonablein view of the potential for improved pro-ductivity, cost savings, and other benefits;and the civil service reform objective ofincreasing Government performance by es-tablishing greater incentives f,,r Federalemployees.

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RECOMMENDATIONS

The Chairman, Civil Service Commission, andhis successor, the Director, Office of Per-sonnel Management, should direct agency headsto develop plans for, and aggressively imple-ment, an effective employee suggestion systemthrough:

-- Active management commitment and support.Senior executives must provide leadershipin motivating managers at all leveil andemployees to participate in proposing andevaluating practical suggestions for improv-ing productivity or increasing operatingefficiency. Improvement in the effective-ness of this system should be consideredin appraising management performance.

--Clearly defined goals. Management shouldestablish realistic goals for employeeparticipation and processing suggestionssubmitted.

-- Adequate organization and staffing.Management should provide trained per-sonnel of sufficiently high level andtechnical competence to enlist the par-ticipation of managers in soliciting andevaluating employee suggestions.

---Constructive action on suggestions sub-mitted. Management should establish amechanism for promptly acknowledgingsuggestions received, evaluating themfairly, and recognizing and rewardingthe suggesters of adopted proposals.

--Realistic evaluation of the system'soperations and results. Responsiblepersonnel should periodically evaluatethe system's operations, nternal con-trols, costs, ard claimed benefits.

The Chairman/Director also should requirethat agency plans be reviewed by the Com-mission/Office; and he should suspend anagency's authority to grant awards if theagency's plan is not administered in accord-ance with the Commission's/Office's guidance.

Tear Shget iii

Contents

Page

DIGEST i

CHAPTER

1 INTRODUCTION 1Federal Incentive Awards Program 1ObJectives of suggestion systems 2Scope of review 3

2 SYSTEM POSSIBILITIES ARE NOT FULLYREALIZED 4System results 4Benefits 7

3 CAN THE EMPLOYEE SUGGESTION SYSTEMBE MORE EFFECTIVE? 10Management commitment and support 10Clearly defined goals 14Adequate organization and staffing 17Constructive action on suggestions

submitted 19Realistic evaluation of the system'soperations and results 21

4 CONCLUSIONS AND RECOMMENDATIONS 23Conclusions 23Recommendations 24

APPENDIX

I Locations visited 26

II Suggestions--results by agency visited 28

III Suggestion system operation at agencyactivities visited 29

IV Publicity used to promote suggestionsystems 35

V Employees' and supervisors' understandingof the suggestion system 36

VI Processing suggestions 37

VII Processing time policy and statistics 38

ABBREVIATIONS

CSC Civil Service Commission

DLA Defense Logistics Agency

EPA Environmental Protection Agency

GAO General Accounting Office

HUD Department of Housing and Urban Development

IRS Internal Revenue Serv'ce

VA Veterans Administration

CHAPTER 1

INTRODUCTION

Employee suggestion systems are rooted in the conceptthat nonmanagers can contribute ideas which will improvethe operation and productivity of their businesses or Gov-ernment agencies. Suggestion systems are essentially ameans of obtaining employees' ideas and using them. Thetechnique generally used is to pay cash awards to eiiploy-ees whose ideas are accepted and used.

In the Federal Government, the employee suggestionsystem is part of the incentive awards program monitoredby the Civil Service Commission's (CSC's) Office of Incen-tive Systems.

FEDERAL INCENTIVE AWARDS PROGRAM

The Government Employees' Incentive Awards Act of Sep-tember 1, 1954 (5 U.S.C. 4501), established the incentiveawards program in the Federal Government. This program in-corporated existing employee suggestion systems which hadbeen active for many years. Primarily, this program is toencourage civilian employees to contribute to the efficiency,economy, or other improvement of Government operations byrecognizing and rewarding employees with cash or honoraryawards for their exceptionally meritorious achievmnentsor suggestions.

In 1967 the House Committee on Post Office and CivilService, which sponsored the Incentive Awards Act, had itsSubcommitLee on Manpower and Civil Service review the ef-fectiveness of the Pct. The subcommittee's report outlinedweaknesses it haC found in the incentive awards proram andmade several recommendations, most of them directed to CSC,for improving the effectiveness of the program.

Using the subcommittee's report, CSC made an extensivestudy of the program. In March 1968 and July 1969 CSC is-sued new guidelines designed to revise and streamline theentire awards program--including suggestion systems--andto overcome weaknesses it had observed during its study.

Currentlv, CSC regulations direct the head of eachagency to:

-- Establish and operate ~n incentive awards plan(5 C.F.R. 451.201).

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-- Emphasize the need for active participation inimproving Government operations so as to obtainmaximum value from the program (5 C.F.R. 451.203).

-- Report annually on the operation of the agency'sprogram (5 C.F.R. 451.206).

We are currently making a study on improving productivitythrough the use of incentive 3wards.

CSC found that processing delays and backlogs contrib-uted to employee dissatisfaction and concern with the sug-gestion system. The backlog was caused partly by the largenumber of minor suggestions submitted. CSC recommendedthat agencies award only those employee suggestions thatdirectly increased the productivity, economy, efficiency,or effectiveness of Government operations.

OBJECTIVES OF SUGGESTION SYSTEMS

Suggestion systems, in the G)vernment or in business,seek to encourage employees to make contributions beyondtheir job requirements. CS 's Federal Personnel Manualdefinec these contributions as employee suggestions sub-stantially contributing to the productivity, efficiency,economy, or other improvement of Government operations.The eight Federal activities and two non-Government firmswe visited emphasized such improvements, but they alsorecognized other benefits, including the improvement ofemployee morale.

The Defense Logistics Agency (DLA) acknowledges thesubordinate benefits of a suggestion system while maintain-ing its productivity orientation, as shown by the followingstatement:

"This part of the program affords DLA person-nel with the opportunity to have an activevoice in accomplishing the DLA mission. Italso provides management with an effectivetool for stimulating morale while recognizingsubstantial benefits in cost reduction."

The Postal Service statement of purpose clearly stipu-lates a productivity-oriented program:

"It is the policy of the U.S. Postal Serviceto encourage its employees at all levels andin all installations to contribute practicalideas for improving the effectiveness and the

2

economy of postal operaticns. These ideas areto be promptly and decisively evaluated to as-sure that their value is quickly realized."

A non-Government activity we visited also stressesemphasis on productivity improvement in the statement ofpurpose for its suggestion system:

"The Suggestion Progrart is intended to stimulatethe creative thinking of the employees and tooffer an organized method of putting acceptableideas--suggestions that will reduce waste andimprove work methods, products, working condi-tions and equipment--into use."

SCOPE OF REVIEW

Our initial inquiry showed that the Federal Gover.-ment's suggestion system did not produce results compa-rable with those of private firms. Also, CSC statisticsshowed that agency participation had been decreasing. Wewanted to find what limited the success of the Federalprogram and the effects on productivity.

This study included visits to locations listed in ap-pendix I. At these locations, we gathered statistical dataand interviewed suggestion system administrative personnel.At some locations, we reviewed suggestion syFcem recordsand interviewed management, supervisory, ari nonmanagementemployees.

Circumstances and practices at these locations maynot be representative of all Government activities, butthere should be some commonality of suggestion systempractices among activities. Conditions similar to thoseat the locations studied could exist at other locations.

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CHAPTER 2

SYSTEM POSSIBILITIES ARE NOT

FULLY REALIZED

The Federal Government's suggestion system has rro-duced about 3.24 million suggestions resulting in reportedtangible benefits of over $1.6 billion during the last10 years. However, the system could contribute much more.

--Employee participation and the real value ofthe system's reported tangible benefits havedeclined steadily and significantly.

--Participation by Government employees is rela-tively low compared with that of non-Gcvernmentemployees as reported to the National Associationof Suggestion Systems.

-- There is wide disparity between the benefitsproduced by defense activities and nondefenseactivities.

SYSTEM RESULTS

Some measures of Federal suggestion system results areshown in CSC's annual reports. For the agencies we visited,reported results for the 15-mont-. period ending September 30,1977, are shown in appendix II.

Employee participationand tangible benefits

CSC's annual reports for the last 10 years show a sig-nificant decrease in both employee participation and tangiblebenefits, as shown on the following page.

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Estimated first yeartangible be.-,f its

Suggestions Ir 1967Fiscal Total Per 100 employees dollarsyear received Received Adopted Reported (note a)

---- (millions)----

1968 537,506 19.1 5.3 $ 149." $ 143.81969 505,159 18.2 5.3 196.0 178.51970 380,246 13.9 3.0 176.0 151.31971 366,200 13.7 3.6 170.8 140.81972 304,724 11.2 3.0 202.1 161.31973 240,588 9.6 2.7 156.8 117.81974 231,908 8.9 2.3 118.3 80.11975 257,162 8.9 2.0 136.8 84.91976 198,081 7.4 2.0 151.8 89.0TQ

(note b) 43,897 - - 33.7 19.81977

(note b) 175,589 6.5 - 134.8 74.3

Total 3,241,060 $1,626.9 $1,241.6

a/Converted to 1967 dollars to account for inflation.

b/Transition quarter. Pro-rata portion of report for the15-month period July 1, 1976, to September 30, 1977.

CSC advised agencies that effective July 1, 1969, theirprograms should concentrate on ideas contributing directlyto economy, efficiency, or increased effectiveness of Govern-ment operations. This may account for the decrease from theprevious year of about 125,000 suggestions received in fis-cal year 1970. However, no other policy changes were madeto account for the decrease in the following years.

Participation--Federaland non-Federal systems

The Federal suggestion system has substantially lowerparticipation rates than do non-Federal systems reported inthe National Association of Suggestion Systems' annual sta-tistical report. The Association, comprising nonprofit or-ganizations dedicated to increasing the worth, contribution,and benefits of employee suggestion systems, annually col-lects and rublishes data from its member organizations. Thefollowing table, taken from the Association's 1976 report,illustrates the differences in participation between Feduraland non-Federal systems.

5

Federal Non-FederalGovernment system,fiscal year calendar year

1976 (note a) 1976 (note b)

Number of eligible employees 2,641,771 4,071,362Suggestions submitted 198,081 971,455Submission rate per

100 eligible employees 7.4 23.9Suggestions adopted 53,404 306,401Percent adopted of those

submitted 27 27

a2'Excludes military personnel.

b/National Association of Suggestion Systems' members organi-zations exclusive of Federal agencies.

Data from non-Federal participants is limited to thatreported to the Association, which may largely be from itsmost interested members. Comparability of the data also isaffected by the difference in suggestion systems policies.For example, most non-Federal systems exclude some managers.In 1976 all Federal employees were eligible, but only 7> per-cent of the total non-Federal employees reported by -he As-sociation in that year were eligible to participate in theirfirms' suggestion systems.

Comparison would be of limited value if the differencein the participation rates were small. However, when thenon-Federal rate of suggestions submitted is more thanthree times the Federal civilian rate, the difference issignificant and indicates that the Federal program can beimproved.

Participation--defense andnon-defense activities

Defense activities accounted for almost 90 percent ofall reported first-year tangible benefits of the Federal sug-gestion system during the 39-month period ending Septem-ber 30, 1977. Tangible benefits reported by the defense ac-tivities we visited for fiscal year 1977 were over $5 million($285 per employee); and the non-defense activities benefitswere about $60,000 ($5.57 per employee). The following tablecompares defense and non-defense suggestion system activityfor the 39-months ended September 30, 1977.

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Defense Non-defense TotalNumber Percent Number Percent percent

Suggestionssubmitted 406,189 64 225,073 36 100

Suggestionsadopted 113,158 67 54,911 33 100

First-yearbenefits $407,767,656 89 $49,919,855 11 100

Amountpaid inawards $ 9,418,390 73 $ 3,427,536 27 100

The wide disparity between suggestion system perform-ance at defense and non-defense agencies indicates that thenon-defense agencies are not tapping the system's potentialas much as they could. The incentive may be lower for em-ployees working in service-type activities tc submit sugges-tions than for employees working in industrii -type activi-ties which offer greater opportunities for measurable savingsand larger cash awards. Although significant differencesexisted in the operations of the activities we visited--somewere industrial-type operations and others were serviceoriented--these differences cannot account for the differencein systems' results.

Information on the suggestion system operated by theagency activities we visited and, in some cases, informationfurnished by headquarters officials, is summarized in appen-lix III.

BENEFITS

The benefits at the activities we visited resultedfrom many types of adopted ideas--some large and otherssmall. The following cases shoo that savings do resultwhen employees exercise creativity and cost-consciousthinking.

-- In 1973 an inventory management specialist atthe Air Force Logistics Command recommendedthat a configuration of the TF-33 engine usedon aircraft models in storage be converted toa configuration of the same engine used onactive B-52H aircraft. Conversion of 14 TF-33aircraft engines eliminated requirements for14 additional B-52H aircraft engines with afirst-year savings of over $4 million.

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-- At the Dayton Veterans Administration (VA)Hospital, an employee recommended usingpaper instead of cloth thermopatch labelsto identify VA-owned clothing. This smallchange resulted in estimated projected sav-ings of $684 a year without reducing utilitybecause the paper labels last as long as theclothing they are attached to.

-- An Environmental Protection Agency (EPA) main-tenence mecnanic in Cincinnati, Ohio designeda rack for small flasks which prevents theglassware from breaking and the samples fromspilling. The savings was about $600 a year.

--A Cincinnati letter carrier suggested puttinghandles on carts pushed by clerks through therows of cases used by carriers. The handlesmade it easier to maneuver the carts.

--An Army Finance and Accounting Center militarypay clerk at Fort Benjamin Harrison suggestedreducing the publication frequency of a computerlisting, saving almost $35,000 a year.

--A Defense Electronic Supply Center employeesuggested that a mechanical process replacea hand-stamping procedure. In evaluating thesuggestion, Center officials found the stampingprocedure to be unnecessary and eliminated itwith an annual savings of ove£ $1,100.

--A Cincinnati Bulk Mail Center electronicstechnician designed a lamp-indicating fuseholder system to replace the fuse holdersystem on seven input cabinets. The newsystem indicates which fuse is blown therebysaving trouble-shooting time. Replacing fusesin the new system is also safer.

-- An Air Force Logistics Command equipment apecial-ist suggested that a control log be established forvarious types of actions in his section. Thie logenables the sections to identify the location ofthe documents and the processing time used.

The Federal employee suggestion system has producedsignificant tangible savings and intangible benefits. Itseems reasonable to expect that it could produce much more.

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Officials at most activities we visited recognized theimportarce of the suggestion system and acknowledged thattheir programs could be improved. Although they identifiedproblems that needed correction, greater emphasis is neededon increasing effectiveness of operations, improving produc-tivity, and assuring that claimed benefits actually haveoccurred.

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CHAPTER 3

CAN THE EMPLOYEE SUGGESTION

SYSTEM BE MORE EFFECTIVE?

If the Federal employee suggestion system is tc bemore effective, the basic problem to be resolved is howto enlist the active support and participation )f managersand employees at agency headquarters and local activities.This will require

-- active management commitment and support;

--clearly defined goals;

-- adequate organization and staffing;

--aggressive implementation;

-- constructive action on suggestions submitted; and

-- realistic evaluation of the system's operationsand results.

Most of these actions are noted in articles and instruc-tional material about suggestion systems. They have beendiscussed at Federal delegate conferences at National As-sociation of Suggestion Systems conventions. The problemsare persistent and generally well known.

MANAGEMENT COMMITMENT AND SUPPORT

Policymakers and top managers at most of the agenciesvisited do not provide enough direction and support totheir suggestion system. They have not made basic man-agement decisions, nor have they taken basic managementaction to ensure that the ruggestion system providesresults.

A statement of support by upper level management is nota guarantee that the system will be effective. For example,the Secretary of Housing and Urban Development (HUD) ex-pressed support for that agency's system by a July 5, 1977,memorandum to all employees. This document mentioned achange in the system name and stated that a new handbookwould be issued to make sure that good ideas get the atten-tion they deserve. In late March 1978, the new handbook was

10

still in draft form; and the changes supported by the Secre-tary in July 1977 had no impact on the system at the areaoffice we visited.

Since the key element is employee participation, manage-ment's interest must be transmitted through managers and su-,pervisors to the employees. Managers and supervisors alsoare frequently called on to assist employees in preparingsuggestions and to evaluate suggestions for adoption. Withthese responsibilities, the importance of their awareness andknowledge of the system, and their support for it is evident.We noted a number of instances where:

--Supervisory and management personnel seemed to lackknowledge of the system,

--Agency headquarters and field office personnel atvarious levels expressed the opinion that super-visors either resisted or feared change and/ordid not support the progr:2.

Knowledge of the system

As the system in most activities we examined is nowset up, the supervisor is possibly the only source ofdetailed suggestion system information for the employee.Yet, Some supervisors seem to lack knowledge of how thesystem works. For example, one supervisor we intervieweddid not differentiate between suggestion awards and incen-tive awards based on job-related performance. Other super-visors did not understand the procedure for evaluatingsuggestions.

Employees at all the field activities we visited prob-ably knew their activities had a functioning employee sug-gestion system, but this knowledge is not enough to ensurethe success of the system Employees must know the typesof ideas sought and other system details so their activeparticipation helps it reach its goals. As expressed in"Employee Innovation and Government Productivity: A Studyof Suggestion Systems in the Public Sector," published by theInternational Personnel Management Association:

"It is more important to communicate the intentand results of suggestion systems to all employ-ees than it is to exhort and promise some kind ofundefined payoff. Employees are considerably moresophisticated, knowledgeable and skeptical thanthey were in the past. In our opinion, they will

11

be most impressed by a forthright statement ofpolicy guides and examples of how to present ideasand prepare suggestion forms."

The field offices we visited used various forms ofpublicity to inform eaployees about the program. These in-cluded posters, mailed flyers, and articles in local agencynewsletters. Meny of these publicity devices were aimed atreminding employees that a sugg-stion system existed intheir agency and that tne agenc' \wds interested in goodideas. They generally dod not ^1l the employees specifi-cally about the types of ideaa eptable, nor did theyadvise employees of system pro, Lures. Appendix IV liststhe publicity devices used.

One technique used to provide complete and accurateinformation on the suggestion system is the publicationand distribution of handbooks. Both private firms wevisited used this technique to ensure that their employ-ees understood the system. Only the Defense ElectronicsSupply Center among the Federal activities we visited hada suggestion system handbook' program officials said itwas given to new employees to read as part of an orien-tation package and was not explained.

Most of the agencies gave some system guidance totheir employees; some gave employees handbooks which dis-cussed the suggestion systeia. For example, the VA hospi-tal's personnel office gave employees a memorandum on incen-tive awards wihich discussed the suggestion system. EPA hada "Handbook for Employees," which included a paragraph aboutsuggestions under the caption "Awards." Appendix V describesguidance provided employees at the eight Federal activitieswe visited.

Regardless of the information provided, certain proc-esses are applied. Suggestions are written and submitted tosome individual with program responsibilities, after whichthe suggestion is recorded and evaluated. The suggester isthen informed of either rejection or acceptance, and is re-warded if the su, estion is adopted. Appendix VI shows theprocessing procedures of a generalized system.

Attitudes toward the system

The attitudes of supervisory and mid-level managementpersonnel are generally conceded to be extremely importantto the suggestion system's effectiveness. Supervisors are

12

expected to encourage the employees they supervise to par-ticipate in the program. On the other hand, some super-visors consider employee suggestions to be criticisms oftheir (supervisors') performance and failure to identifyand remedy the situation causing the suggestion.

We know of no measure of the extent of supervisors'negative attitudes or of the effect on the Federal sug-gestion system. However, system officials, managers, andother employees commented on Fome supervisors' negativeattitudes toward the system when we discussed the qualityof suggestion evaluations.

Improvin4 knowledge and attitudes

Training for supervisors is frequently cited as a wayto overcome some of their resistance to suggestion systems.CSC makes material available to assist in training super-visors about the Federal incentive awards system includingsome data on suggestions, such as

-- a pamphlet titled "A Supervisor's 15 MinuteGuide to the Federal Incentive Awards Program."CSC officials said the 250,000 copies of thispamphlet were ordered by agencies at the firstprinting; and

-- a training package titled "Incentive Awards--A Positive Force in Personnel Management."CSC officials said that 1,125 copies of thispackage had been sold by March 31, 1978. andthat CSC offices around the country had copiesavailable to lend.

Three agencies we visited have recognized theimportance of supervisory attitudes toward the systemin their operating manuals. An Army regulation pro-vides for recognition for supervisors who demonstrateunusual ability to stimulate participation in the system.The EPA manual requires supervisors to

"Participate actively in the suggestion systemby encouraging employees to submit their ideasand by evaluating suggestions promptly and ob-jectively."

The VA manual provides for recognition of supervisors suc-cessful in motivating employees to submit beneficialsuggestions.

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Local activities we visited also provided training forsupervisory personnel. For example, at Ft. BenjaminHarrison, the Army's incentive awards administrator pro-vided training on incentive awards to all supervisors. AtEPk, the administrator told us he planned to provide super-vio30rs some training on suggestion systems.

CLEARLY DEFINED GOALS

Performance goals are a commonly accepted managementtool for defining and ultimately evaluating almost any kindof effort. For managers to be aware of how a system func-tions, they must have some kind of clearly defined perform-ance goal against which to measure.

A 1976 study published by the International PersonnelManagement Association identifies three basic types of goalsfor suggestion systems:

-- Participation and/or adoption.

-- Value of efficiency and effectiveness improvements.

-- Quality of the program measures.

CSC addressed goals in its Federal Personnel Manual aspart of its discussion of incentive awards program evalua-tion:

"Agencies are encouraged to establish goalsand objectives which are specific in deter-mining whether the end result was actuallyattained."

Goals may be considered for the following areas:

-- "Reducing the average processing time by 'X' days.

-- Establishing time goals and follow-up proceduresfor processing.

-- Reducing backlogs by 'X' percent.

-- Increasing submission and adoption rates forsuggestions by 'X' percent.

--Establishing quarterly promotional programs thatfocus employee ideas on increasing the produc-tivity, economy, efficiency, or effectiveness"

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"of Government operations, and thereby, increasethe level of tangible benefits from adopted sug-gestions.

--Developing and administering a first-line super-visory training course.

-- Reviewing and updating aids to suggesters andevaluators."

Two of the eight Government field activities we visitedhad participation and/or adoption goals. The Defense Elec-tronics Supply Center's goal is establisted by the DefenseLogistics Agency. The Agency's goal is the same for allheadquarters and field activities. Center officials acceptthe goal as reasonable and have generally met it over thelast several years. However, the goal is not realistic forall activities. Agency data showed that scme of its activi-ties far exceeded the goal, while others could not achieveit. Suggestion system officials at headquarters said thatits activities could not be evaluated solely by comparingperformance with the goal, and that the circumstances ateach activity must be considered.

At Wright-Patterson Air Force Base, goals have beenestablished locally and have differed by organiz .ion. Thesystem, administered by the 2750th Air Base Wing, includesthe 2750th, Air Force Logistics Command Headquarters, andother tenant activities. According to a September 1977study of the system, the goals were for suggestions equalto 20 percent of the population for the 2750th, 15 percentfor the Logistics Command Headquarters, and 15 percent forall other tenant activities.

Logistics Command Headquarters set overall fiscal year1978 goals as follows:

--Participation rate of 16 percent.

--Adoption rate of 25 percent.

-- Tangible benefits of $1,500 for each suggestionsubmitted.

-- Tangible benefits of $6,000 for each suggestionadopted.

The Command's guidance on goal setting cautioned thatestablished goals should be attainable. The 1977 studyrecommended that all activities in the system should adoptthese goals.

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One of the non-Government activities visited establishesindividual coals for each of the facilities serviced by thecentralized suggestion system. The goals, set by suggestionsystem personnel after discussion with facility managers,are based on past performance, changes in product lines,changes in personnel strength, and any other factors whichmay influence participation in the system.

Comments endorsing goals

Some officials at the activities we visited concurredthat clearly defined goals should be established. Othersdid rnot.

HUD national office officials said they believed lackof specific goals contributed to their system's poor per-formance. Their suggestion system is undergoing majorchanges, including establishing performance goals. Offi-cials estimated coals for HUD headquarters in fiscal year1977 with these results:

Fiscal year1976 Fiscal year 1977

Actual Goal Actual

Suggestions submitted 109 550 352Tangible benefits $86,000 %350,000 $187,000

Some officials at agencies without goals believed thatgoals could be valuable: An EPA field official said thatgoals could substantially improve program administration.An Internal Revenue Service (IRS) national office officialcautioned that goals could help suggestion system performanceonly if all concerned in the goal setting, performance, andevaluation procedures agreed that the goals were realistic.

Comments not endorsing goals

Goals for participation and/or adoption of suggestionsare not universally accepted as useful management tools.Officials at some activities said they felt goals createfalse levels of activity and concentration on the numbers.

An IRS regional official said goals create unrealisticcompetition and are a waste of time; a national office systemofficial expressed a similar opinion. A Postal Service fieldadministrator said that its national office does not estab-lish goals and field activities are not permitted to. A VAfield official felt that goals simply were not appropriatefor suggestion systems.

16

ADEQUATE ORGANIZATION AND STAFFING

Organization and staffing for the suggestion system dif-fered substantially among the activities we visited. Someactivities chose a system design in which the suggestionsare submitted to and processed by a central office; otherschose a design in which suggestions are submitted to andprocessed by several decentralized groups. For example, onenon-Government activity's system requires employees from twodivisions with offices and plants in many parts of the coun-try to submit suggestions to ore central office. The centraloffice records the suggestions, determines idea and suggestereligibility, and determines whether the suggestion is orig-inal. The IRS system requires employees to submit sugges-tions through their supervisors to a functional coordinatorresponsible for only one activity at one location. Thiscoordinator records the suggestion and controls furtherprocessing.

The size and type of staff at the locations visited gen-erally were not adequate to assure both timely processing ofemployee suggestions and program promotion. The followingtable, which includes functional coordinator time where wecould accumulate it but does not include evaluation time,makes the point:

Fiscal year 1977 Approximateapproximate number ofstaff years employees

EPA--Cincinnati, Oh. 0.05 900HUD Area Office .00 200IRS Office (note a) .50 b/2,800Postal Service .30 5,100VA Center--Dayton, Oh. .45 1,800Army--Ft. Benjamin Harrison 1.25 4,200Air Force--Wright-PattersonAir Force Base 1.70 11,000

Defense Electronic SupplyCenter (note b) 4.00 3,000

8.25 29,000

a/Includes functional coordination time.

b/Does not include the 1,900 seasonal employees at the Serv-ice Center.

17

The types of individuals represented by the staff-yearcolumn above vary greatly. For IRS it shows the accumulationof estimated time of 21 different people. For Ft. Harrison,one of the 1.25 staff-years was the time of a clerk, not aprofessional administrator. About half of the 1.7 staff-years at Wright-Patterson Air Force Base was the time of thesystem manager. All time spent on the program at the VACenter in Dayton was that of one clerk.

By way of contrast, one of the private firms we visitedhad 35 centrally located full-time employees, including 4managers and 22 specialists and analysts, administering theprogram for about 60,000 eligible employees Nationwide. Theanalysts, selected from the rank of hourly workers, have highpotential for management positions.

CSC's Office of Incentive Systems officials provided uswith data from several analyses of suggestion staffing. Theearliest of these was made by the Navy in 1952, before thesuggestion system became part of the incentive awards pro-gram, and is interesting primarily because it identifies anddiscusses some of the same basic issues that exist today.

More recent analyses have been made by the Office ofIncentive Systems. At the 1975 National Association ofSuggestion Systems Conference, the Office polled the Federaldelegates to obtain data on the types of people administer-ing suggestion systems. This survey showed that about 70percent of the 64 delegates who responded were below gradeGS-12. About half of the 56 delegates responding to the surveyquestion concerning GS job series were in personnel seriesjobs. The remainder were in general clerical and administra-tive or cther series.

CSC has also attempted to gather data on the number ofindividuals involved in the incentive awards program on sev-eral occasions. A fiscal year 1971 report showed that 27agencies used about 817 staff-years on incentive awards. A1974 analysis of 12 non-Defense agencies with about one-halfmillion employees showed use of 155 staff-years on the pro-gram.

Although these analyses produced some interesting data,the data could not be considered generally useful in analyz-ing overall Government suggestion systems because

-- not all agencies were included;

18

-- in some cases, the data included the time ofpeople who were not on the program staff (e.g.,committee members and evaluators), and in somecases it did notl and

-- the data always addressed the incentive awardsprogram of which the suggestion system is onlya part.

Annual reports from various activities to the Commissionhighlight the problem of staffing. A report for fiscal year1977 said that:

"Operating problems reported by agencies aremainly those which are of a continuing nature,e.g., lack of adequate or qualified incentiveawards personnel."

The Air Force narrative said of the problem of type ofstaff:

"Our proposal continues to be the same as yearspast. We continue to urge that the CSC developguidance to agencies on the importance of pro-fessional, full-time suggestion program admin-istrators through a separate job classificationseries."

A suggestion system administrator, who is a formerPresident of the National Association of Suggestion Systems.said the key element in a suggestion system is its adminis-trator. The administrator must give the system its vitalityand attractiveness. This opinion on the importance of staff-ing obviously is not universally shared in the Federal Gov-ernment, as shown by the staffing of the program at the fieldactivities we visited.

CONSTRUCTIVE ACTION ON SUGGESTIONS SUBMITTED

One consideration which contributes to poor participa-tion by employees is their belief that their suggestions willnot be fairly evaluated. In addition to fair evaluations,agencies should assure suggesters that their ideas are wantedby promptly evaluating them and contacting the suggestersduring the processing period. Extensive delays in processingsuggestions can be fatal to a suggestion system.

19

Evaluating suggestions

Employees we interviewed expressed their concern aboutthe fairness of suggestion evaluations. One suggester saidhe felt deceived because he thought the activity wanted hisideas; but the evaluation and subsequent rejection proved tothe contrary. Others said their agency stole ideas by re-jecting suggestions and subsequently using the ideas sug-gested. The employees who believed their agencies providedunfair evaluations expressed reluctance to submit suggestionsin the future.

System administrators, functional coordinators, andfunctional managers also expressed concern about the fairnessof evaluations. One administrator said that evaluators gen-erally seem too concerned about amounts awarded or givingawards at all. The administrator advised us that this tight-fisted attitude hurt employee confidence in the system.

Delays in processing suggestions were evident at sev-eral -tivities. Interestingly, the agency whose policyestao.. hed the most restrictive time limits with specifiedcontrol measures now experiences virtually no delays. Onthe other hand, the agency which has the least restrictiveregulations experienced the largest problem with delays.

Appendix VII summarizes data on agencies' processingtime policies and average processing time in fiscal year1977.

Contacting suggesters

Another consideration in promptly and fairly evaluatingsuggestions is the interaction between management and thesuggester. Suggesters should be kept informed of the statusof their suggestions. Acknowledging receipt of a suggestionis a common practice in private industry and in most of theagencies we visited. One agency that does not acknowledgereceipt of suggestions is the Postal Service.

Delays should be explained to suggesters to avoid lossof their confidence in the system. Suggesters will not offerideas freely if they believe their suggestions are not appro-priately considered. For example, IRS has a procedure whichprovides for periodic revision of forms. Any suggestionsconcerning a form change are put into the "forms bank" andare not considered until it is time to revise the applicableform. Currently, suggestions dealing with a particular formare put into that form's bank and screened when the form is

20

reviewed. One individual advised urf he did not put in a sug-gestion because he felt it would just get lost in the formsbank.

Changes being made

Changes in th9 procedures for evaluating suggestions arebeing made at three agencies we visited.

-- HUD program officials said they are estab.ish-ing a priority system for processing the mostsignificant suggestions first, while assuringthat all suggestions are processed within settime goals.

-- IRS is revising the "forms bank" process. Un-der the new draft procedure, all suggestionssent to the forms bank will be reviewed and,if original, put in the forms bank and acknow-ledged. Suggestions which are not originalwill be returned to the suggester.

-- Postal Service proposals include submittingsuggestions to a suggestion office ratherthan through a supervisor. The officialresponsible for suggestion policy saidthis change hopefully will build employeeconfidence by eliminating possible localprejudice. Another proposal is a changedprocedure for expediting processing of sug-gestions with a potential for bigger savings.

REALISTIC EVALUATION OF THESYSTEM'S OPERATIONS AND RESULTS

Generally, the agencies have evaluated their suggestionsystem as part of the evaluation of the incentive awards pro-gram. At the request of the Base Vice-Commander, the Wright-,Patterson Air Force Base system received a more direct eval-uation. None of the evaluations related benefits to costbecause none of the agencies knew the cost of their system.

In a 1973 report, we recommended that CSC revise agencyreporting requirements to obtain complete program administra-tion costs, including the cost of time spent evaluating em-ployee contributions, and include these costs in its annualreport. This recommendation has not been adopted. Respond-ing to our report, CSC said that:

21

"We agree that program administration costsshould be obtained and included within theCommission's annual program report. We willstudy the costs and benefits of obtainingprogram administrative costs. If, follow-ing consultation with agencies, it is deter-mined that this can be accomplished econom-ically, guidance will be incorporated in ourreporting instructions and theso cost figureswill be included in our annual report."

In December 1974, CSC's Office of Incentive Systemsinformed us that it had:

-- Surveyed agencies that had attempted to Jeter-nine program administration cost, and requestedcost information and forms used to collect costsof evaluatinq suggestions.

-- Discussed the feasibility of cost determinationwith a number of incentive awards administrators.

-- Developed a proposed format.

-- Solicited agency comments with a view to issuinginstructions and incorporatinr these costs in theannual report.

-- Reviewed level of experience of department andagency awards program personnel (e.g., grade, level,and series) to obtain a profile on incentive awardsadministrators, and dollar value on personnel costs.

CSC's Office of Incentive Systems officials said theirefforts to identify, collect, and report administrative costshad met with little success. For example, in 1974 a proposecformat to be used in tracking the cost of processing sugges-tions was sent to three program administrators. None formallyresponded, but informally they said that they did not havesufficient staff for the effort. Because many individualswith responsiblities for the suggestion system are also re-Fponsible for the remainder of the incentive awards prograii,it may be difficult to distinguish the cost of one from theother.

22

CHAPTER 4

CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

Federal agencies are not fully realizing the benefitsthat may be achieved through an effective employee suggestionsystem.

-- Employees long have been encouraged to servebeyond their job requirements by suggestingideas contributing to increased productivity,efficiency, economy, or other improvementof Government operations.

-- Under its statutory authority (5 U.S.C. 4506),CSC has issued extensive regulations andguidelines and regularly publicized achieve-ments to encourage agencies to implement thesystem effectively.

-,-Agency heads have voiced their support of thesystem.

-- The President personally has presented awardsto suggesters of ideas considered particularlysignificant.

But pronounced support of a suggestion system does notguarantee its effectiveness; managers at all levels andemployees must participate. Yet, many managers and employ-ees lack enthusiasm for the system; relatively few employeescontribute suggestions; and in some agency activities, thesystem is practically lifeless. Why?

This is attributable, in our opinion, to common problemsthat are well known. The system lacks:

-- Active management commitment and support.

-- Clearly defined goals.

-- Adequate organization and staffing.

-- Aggressive implementation.

-- Constructive action ona suggestions submitted.

23

-- Realistic evaluation of the system's operations andresults.

We believe these persistent problems continue because nosingle office with the authority to act has directed agenciesto aggressively implement the system. Title 5 U.S.C. 45 au-thorizes heads of agencies to grant awards and CSC to issueregulations and instructions for administration of agencies'systems. Although CSC has provided guidance and dissemi-nated information in accordance with its statutory responsi-bilities, it has not had the authority to direct agencies totranslate its guidance into effective program action.

Commenting on another of our reports on improving produc-tivity, in April 1978 the Associate Director for Managementand Regulatory Policy, Office of Management and Budget, saidthat the President had:

.w * " determined that responsibility forproductivity improvement within the execu-tive agencies would be most appropriatelyassigned to the Civil Service Commission(or the Office of Personnel Management ifCivil Service reorganization is adopted)." 1/

To discharge this responsibility, CSC and its successor,the Office of Personnel Management, must hold agencies ac-countable for effectively implementing the suggestion systemto encourage employees to share their creative thinking.This seems reasonable in view of the potential for improvedproductivity, cost savings, and other benefits; and the civilservice reform objective of increasing Government performanceby establishing greater incentives for Federal employees.

RECOMMENDATIONS

We recommend that the Chairman, Civil Service Commis-sion, and his successor, the Director, Office of PersonnelManagement, direct agency heads to develop plans for and ag-gressively implement an effective employee suggestion systemthrough:

-- Active management commitment and support. Seniorexecutives must provide leadership in motivating

1/"The Federal Role in Improving Productivity--Is The Na-tional Center for Productivity and Quality of Working Lifethe Proper Mechanism?" (FGMSD-78-26, May 23, 1978.)

24

managers at all levels and employees to participatein proposing and evaluating practical suggestionsfor improving productivity or increasing operatingefficiency. Improvement in the effectiveness ofthis system should be considered in appraisingmanagement performance.

--Clearly defined goals. Management should establishrealistic goals for employee participation and proc-essing suggestions submitted.

--Adequate organization and staffing. Managementshould provide trained personnel of sufficientlyhigh level and technical competence to enlist theparticipation of managers in soliciting and evalu-ating employee suggestions.

--Constructive action on suggestions submitted. Man-agers should establish a mechanism for promptly ac-knowledging suggestions received, evaluating themfairly, and recognizing and rewarding the suggestersof adopted proposals.

--Realistic evaluation of the system's operations andresults. Responsible personnel should periodicallyevaluate the system's operations, internal controls,costs, and claimed benefits.

We also recommend that the Chairman/Director requirethat agency plans be reviewed by the Commission/Office;and that he suspend an agency's authority to grant awardsif the agency's plan is not administered in accordancewith the Commission's/Office's guidance.

25

APPENDIX I APPENDIX I

LOCATIONS VISITED

Defense Logisti.cs Agency:Defense Electronics Supply Center,

Dayton, Ohio

Defense Logistics Agency,Training and Incentives Division,Civilian Personnel,Cameron Station, Virginia

Department of the Army:United States Army Finance and Accounting Center,

Indianapolis, Indiana

Department of the Air Force:2750th Air Base Wing,Wright-Patterson Air Force Base, Ohio

Department of the Treasury:Department of the Treasury,

Office of the Assistant Director ofPersonnel for Training, Development and Recognition,

Office of Personnel,Washington, D.C.

Internal Revenue Service,Employment Branch,Personnel Division,Washington, D.C.

Internal Revenue Service,Office of Regional Commissioner,Cincinnati, Ohio

Internal Revenue Service,Cincinnati Service Center,Covington, Kentucky

Veterans Administration:Incentive Awards Staff,Office of Assistant Administrator for Personnel,Washington, D.C.

Veterans Administration Hospital,Dayton, Ohio

96

APPENDIX I APPENDIX I

Department of Housing and Urban Development:Management Systems and Studies Branch,

Management Systems and Organizations Division,Office of Organization and Management Information,Washington, D.C.

Columbus Area Office,Columbus, Ohio

Environmental Protection Agency:Personnel Management Divisions,

Deputy Assistant Administrator for Adm'nistration,Assistant Administrator for Planning an,'. Management,Washington, D.C.

Environmental Protection Agency Offices,Cincinnati, Ohio

Postal Service:Cincinnati Management Sectional Center,Post Office Annex,Cincinnati, Ohio

Cincinnati Bulk Mail Center,Cincinnati. Ohio

Environmental Services DivisionEmployee and Labor Relations Group,Washington, D.C.

Civil Service Commission:Office of Incentive Systems,Washington, D.C.

Private Organizations Visited:National Association of Suggestion Systems,

Chicago, Illinois

International Business Machines Corp.,Office Products DivisionLexington, Kentucky

Johnson and Johnson,Surgical Dressing Division,Chicago, Illinois

27

APPENDIX II APPENDIX II

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28

APPENDIX III APPENDIX III

SUGGESTION SYSTEM OPERi.TION

AT AGENCY ACTIVITIES VISITED

DEFENSE ELECTRONICS SUPPLY CENTER,DEFENSE LOGISTICS AGENCY

The nefense Electronics Supply Center has had high ratesof employd. participation and adopted suggestions. DLA head-quarters has actively supported the Center by setting numeri-cal goals for adoption of suggestions, reviewing and follow-ing up suggestions submitted by the Center, and providingstaffing.

One technique DLA headquarters uses to maintain a highlevel of activity at its field locations is active responseto reported statistics. These responses are of two basictypes--prodding letters to those locations failing to achieveat a satisfactory level, and congratulatory letters to thoselocations with superior achievements. The congratulatoryletters are signed by the Commander, Defense LogisticsAgency.

DLA headquarters officials told us that the organiza-tion we observed at the Center is typical of the way activi-ties are organized to carry out the program. This organiza-tion included program personnel in the Office of EmployeeDevelopment and Incentives and coordinators at each func-tional entity at the Centers.

DLA suggestion program personnel have written that:

"The basic premise underlying anysuggestion program is that indi-vidual personnel, regardless ofposition or grade level, can becreative and apply it to improv-ing the organization's effective-ness and productivity. DLA managersand supervisors have accepted asone of their basic responsibilitiesthe stimulation of this type ofemployee creativity."

Althougih DLA's stated orientation of its suggestionprogram is toward increasing productivity, DLA has no formalprocesses for determining whether claimed improvements andproductivity gains actually have occurred. Headquarters of-ficials stressed, however, that the program has some built-incontrols.

29

APPENDIX III APPENDIX III

--individuals authorized to adopt ideas mustcertify that the ideas were adopted beforeawards can be made.

-- Internal audits are made of all savingsresulting in awards over $1,000.

-- All suggestion evaluations require twosignatures.

ARMY ACCOUNTING AND FINANCE CENTER,FT. BFNJAMIN HARRISON

Suggestion system officials at Ft. Benjamin Harrisonacknowledged that employee participation has decreased dur-ing the past few years. They said that this is an Army-widesituation.

Ft. Harrison's system does not provide for setting par-ticipation goals, but it does provide for setting and closelyfollowing time goals for processing suggestions received.Recently, a backlog of suggestions was eliminated when, instaff meetings, the commander emphasized the importance ofprocessing suggestions quickly.

The Army regards involvement and support of supervisorsas most important, and supervisory training includes stress ontheir responsibilities in the suggestion program. Regula-tions require that supervisors identify areas in which con-structive suggestions are desired. Regulations also providethat letters of commendation or other appropriate recogni-tion be given to supervisors demonstrating unusual abilityin stimulating participation in the system.

Reviews are not routinely made to determine whetherclaimed and projected benefits from adopted suggestionsactually have Seen realized. One official said that theinternal review group has made periodic post audits ofadopted suggestions for which large awards have been paidto determine whether anticipated savings or other benefitshave been realized.

WRIGHT-PATTERSON AIR FORCE BASE

Suggestion cystem officials at Wright-Patterson AirForce Base said they firmly believed their system is costeffective. They said they stress submission of qualitysuggestions.

30

APPENDIX III APPENDIX III

Officials said one of the Air Force review or inspectiongroups reviews aspects of the system about once a year on theaverage. These reviews generally focus on administration ofthe program rather than on the validity of claimed savings orother benefits.

In September 1977, management analysis personnel made aspecial study of the system at the request of the Deputy Com-mander to evaluate complaints about its operation. Afterexamining the files on 53 suggestions, the study team con-cluded that the suggestions wer-t 3incere attempts to improveoperations and that the evaluations of the suggestions gen-erally were well made.

The study team recommended that (1) participation goalsbe set at 16 percent, (2) program publicity emphasize thatquality suggestions be submitted, and (3) the Base foster anatmosphere in which imagination, creativity, and innovationmight flourish ba, not insisting that goals be met throughforced participation.

INTERNAL REVENUE SERVICE,DEPARTMENT OF THE TREASURY

IRS officials said their program was not a healthy on-going program. They identified several problems, includinglack of program credibility among management and employees,delays in suggestion processing, and lack of management sup-port at all levels.

Large numbers of IRS employees spend small amounts oftime on the program. Data is centralized and must be devel-oped fLom discussions with people in each office. This or-ganization is typical for the program in all IRS regions.

Headquarters officials emphasized they could not setnumerical goals for the program, but that they probablycould negotiate with the regi as to do anything. They em-phasized the regions' respo.: bility for evaluating theirown programs. They said the p.'ogram in the Cincinnati Re-gion was typical of IRS.

IRS officials expressed uncertainty about whether theprogram actually pays for itself. They said no one has ac-tually validated claimed productivity increases.

31

APPENDIX III APPENDIX III

VETERANS ADMINISTRATION

At VA headquarters, we interviewed three employees whospend major portions of their time on the suggestion program.The program is administered by the various components of VA,with a high degree of freedom. Officials who showed us memo-randums stating top-level management's commitment to thesuggestion program said that:

-- No goals are set.

-- The only controls exercised by headquartersare the requirement for semiannual reportsand visits by personnel evaluation teamswhich look at administration of all programs.

--The grade level of actual administratorsin the field is too low. The function isdelegated to clerical personnel who needadditional training for this function.

--Although officials have stated that trainingfor field administrators is needed, no fundshave been set aside for travel to acquirethis training.

No formal studies have been made to verify the actualincreases in productivity resulting from suggestions. How-ever, suggestions which require large investments to imple-ment are tested before awards are granted. Officials feelthe $3 million in tangible benefits derived from the pro-gram in fiscal year 1977 has paid for the program's admin-istration and more.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

At %he Columbus Area Office we noted:

-- Almost no local promotion of the program.

--Responsibilities not clearly defined.

--Very few people involved.

-- No suggestions submitted in the last 3 or 4 years.

-- A long delay in processing the single suggestionon hand.

32

APPENDIX III APPENDIX III

HUD headquarters officials said they realized severalthings were wrong with their program, and they are makingchanges to correct them.

A key to the implementation of their proposals is adraft handbook which has not been adopted yet because someaffected elements of HUD have not concurred in it. Changeshave been made in the headquarters unit and in two regions,and observable improvements have occurred in program par-ticipation, nuroer of adoptions, and amount of benefits re-ported.

Headquarters officials said the only mechanisms used atthe present time to control the program are the statisticaland narrative report. from the regions, personnel managementevaluation team visits to the regions, and the regions' eval-uations of their offices. Headquarters officials have pro-posed a report which will furnish additional information onthe administrative cost of the program and criteria which theregions can use to evaluate their own programs.

No formal attempt has been made to verify productivityincreases resulting from suggestions.

ENVIRONMENTAL PROTECTION AGENCY

The EPA suggestion program is a low-key, low-priorityexercise carried out by a division in the personnel office.Headquarters officials said that the little time spent onsuggestions by the Cincinnati coordinator was probably con-sistent throughout the agency.

The only monitoring or control activities by programrepresentatives at EPA headquarters were review and analysisof the annual statistics reports and periodic personnel man-agement evaluations. Personnel officials said they could notdirect activities outside the personnel area or require su-pervisors and managers to promote the program or be receptiveto its products. Although their voluntary cooperation isneeded, some supervisors and managers do not understand theprogram or reject it as some kind of "giveaway program."

EPA has not made any studies to measure the actual ef-ficiency or productivity gains from the suggestion progra.n.The individuals with authority to adopt suggestions and nakeawards are supposed to make sure that improvments are made.

33

APPENDIX III APPENDIX III

POSTAL SERVICE

Postal Service officials expressed the opinion that pro-gram problems are obvious and need correction. Program offi-cials have a number of proposals in process which, they said,could be implemented. The proposals came our of an analysisof the program made several years ago. An official believeschanges will be accepted because of increased management sup-port.

Proposed features in the revised program include:

-- Submission of suggestions directly to acoordinator in the Management SectionalCenter rather than through a local super-visor.

-- Changes to the formal policy and programhandbook.

-- Preparation and distribution of programinformation to employees.

--Simplification of the intangible award scale.

-- Improved procedure for handling bigger savingsideas.

-- Campaigns aimed at specific problem areas.

Officials said we had looked at a Management SectionalCenter that was below average in terms of participation,adoption, and savings. They said the current system ishighly dependent on local support and widely divergent re-sults can occur at the various activities.

Officials said that the potential for efficiency andproductivity increases in the Postal Service is great becauseof the multiplier effect. The substantial standardization inthe Postal Service created several areas where suggestionswith wide-sweeping effect could be made.

34

APPENDIX IV APPENDIX IV

PUBLICITY USED TO PROMOTE THE

SUGGESTION SYSTEM

Memo-randums/ In-houseflyers news-

Posters (note a) papers

Defense Electronics SupplyCenter b/Yes Yes Yes

Department of Housing andUrban Development (note c) No Yes No

Environmental ProtectionAgency--Cincinnati, Oh. Yes No No

Ft. Benjamin Harrison (U.S.Army) Army Accounting andFinance Center Yes Yes Yes

Internal Revenue Service Of-fices--Cincinnati, Oh., area Yes No Yes

U.S. Postal Service--CincinnatiManagement Sectional Centerand Cincinnati Bulk Mail Cen-ter (note c) No Yes d/Yes

Veterans Administration Hos-pital--Dayton, Oh. Yes Yes yes

Wright-Patterson Air ForceBase Yes Yes Yes

&/Memorandums/flyers distributed to all employees.

b/Defense Electronics Supply Center also publicizes the sug-gestion system via a large sign at the Center's entrance.

c/A Nationwide promotional campaign has been proposed.

d/Very infrequently--last in 1974.

35

APPENDIX V APPENDIX V

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APPENDIX VI APPENDIX VI

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APPENDIX VII APPENDIX VII

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