IBM Suggestion Plan

February 4, 1985

Memorandum to: All IBM Managers

Subject: IBM Suggestion Plan

In today's competitive environment, IBM's Suggestion Plan provides us with an important edge. It continues to help us improve our productivity and the quality of our products. And it allows us to reward employees for their innovative ideas.

To encourage greater employee participation in the plan, we are improving it in a number of ways. First, the maximum award is being increased from $100,000 to $150,000. In addition, administrative procedures are being streamlined to speed up the evaluation process.

This program needs, and deserves, your continued support. You can provide that by helping your employees to develop and submit cost-saving ideas, and by resolving issues that may arise during the evaluation process.

Please review the improved IBM Suggestion Plan, which is covered in the attached documents, with your staff in the coming weeks. It can benefit them--and IBM.

/S/
John F. Akers, CEO

JFA:md

Attachments

IBM Suggestion Plan

CHANGES IN IBM SUGGESTION PLAN

A number of changes have been made to the IBM Suggestion Plan. The changes are designed to improve the administration of the plan, speed the evaluation process, and increase employee participation.

Under the enhanced plan, the maximum employee award has been increased from $100,000 to $150,000.

The "Your Ideas Have Value" booklet, which covers employee and subject eligibility, has been revised to make the plan easier to understand. In addition, the IBM Suggestion Form has been redesigned to help ensure that each submission is complete.

The improvements apply to all new suggestions that are received by the Suggestion Department after February 15, 1985.

The new suggestion booklets and forms are being made available at each location.

REVISED PLAN

Q. How has the IBM Suggestion Plan been changed?

A. The key changes include: Increasing the maximum award from $100,000 to $150,000. Eliminating employee anonymity. This will allow direct communication between evaluator and suggester, and improve the evaluation process. Using job descriptions and performance plans to determine employee eligibility. This should reduce any misunderstanding about job responsibility. Requiring a manager's signature on suggestions about safety, health and security which should improve the quality of these submissions. Redesigning the suggestion form to include a section for describing how an idea will benefit IBM. Clarifying certain elements of the program - including maturing process, and definition of second year payment.

Q. Will these changes apply to suggestions now being processed?

A. No. The changes apply only to suggestions that are received on or after February 15, 1985. Suggestions received before that will be administered according to provisions in the plan that were in effect on the day the suggestions were received.

Q. Is there any additional information on the enhanced Suggestion Plan?

A. The "Your Ideas Have Value" booklet has been revised to reflect the Plan improvements. As a manager, I will be conducting a department meeting to discuss the Suggestion Plan. Additionally, the Suggestion Departments will conduct training for coordinators and evaluators.

GENERAL

Q. What is the purpose of the Suggestion Plan?

A. The Suggestion Plan was established in 1928 to reward employees for their cost-saving ideas that helped to reduce costs or improve the quality of our products.

Q. Who is eligible to participate?

A. All IBM employees are eligible to participate in the IBM Suggestion Plan.

Q. Who is eligible to receive an award?

A. All employees who meet the eligibility requirements of the suggestion plan, are eligible for award consideration. Your eligibility is determined by IBM management.

Q. How does management determine my eligibility?

A. Eligibility determination is based on the suggester's job description and performance plan at the time the suggestion is submitted. If your suggestion is outside your assigned job responsibilities, you will be eligible to be considered for an award.

Q. If I change jobs, how will that affect my eligibility?

A. Eligibility is determined by your new job responsibilities. For a period of six months, you won't be eligible to receive an award for an idea(s) that were part of your previous job responsibilities.

Q. Are retirees eligible to receive awards?

A. Yes. IBM retirees - and those on the IBM Medical Disability Income Plan - are eligible to participate and receive awards under the Suggestion Plan. For a period of six months, following the date of retirement or disability, their eligibility is based on their last active job assignment.

Q. Who isn't eligible to receive an award?

A. All managers (except program managers) - as well as suggestion plan staffs - are not eligible to receive awards.

Q. Must suggestions provide savings to IBM for me to receive an award?

A. No. If there are no direct savings but the idea fits one of the five intangible categories, the suggestion will be eligible for an intangible award. In cases where there are no savings and the idea does not qualify for an intangible award, the suggestion may be adopted, but there will be no award paid under the IBM Suggestion Plan guidelines.

Q. What makes a suggestion eligible for an award?

A. A suggestion is eligible for an award if: (1) both the subject of the suggestion - and the suggester - are eligible; (2) the suggestion has merit; (3) there is a cost justification for implementing the idea; and (4) all other provisions of the Suggestion Plan are met.

Q. Can I receive an award for a suggestion submitted on a subject in the "maturing process"?

A. In situations where management determines that an action was taken solely as a result of a suggestion, an award may be granted under the Plan. However, suggestions on subjects in the "maturing process" are normally not awarded.

REMOVE THE PROVISION FOR ANONYMITY FROM THE SUGGESTION PLAN

Anonymity restricts the evaluation of ideas because it hinders open communication between the suggester and evaluator.

REVISE AND CLARIFY SUBJECT ELIGIBILITY

The provisions of the plan dealing with subject eligibility have been revised to include four major headings covering items ineligible under any conditions, subjects normally not awarded, actions that predate a suggestion and activities in the maturing process. It is expected that there will be a significant reduction in the confusion and dissatisfaction often resulting from the current subject eligibility guidelines.

UTILIZE JOB DESCRIPTION AND PERFORMANCE PLAN TO DETERMINE EMPLOYEE ELIGIBILITY

Employee award eligibility determination will be based on the employee's job responsibilities as stated in the job description and performance plan. Although management must still make a judgment regarding an employee's award eligibility the decision will be based on documents familiar to both the manager and the employee.

REVISE THE PROCEDURE FOR HANDLING SAFETY, HEALTH AND SECURITY SUGGESTIONS

Safety, health and security suggestions must be reviewed and approved by the suggester's manager. Managers have been provided with guidelines outlining the criteria by which ideas can be submitted as suggestions. This change in procedure will prompt more timely focus on safety, health and security concerns and strengthen the premise that employees have a responsibility to bring such matters to the immediate attention of management.

INCREASE MAXIMUM AWARD FROM $100,000 to $150,000

Along with the improvements made to the plan, the maximum award has been increased. Our Suggestion Program is a leader in the industry. By raising the maximum, we stay in the forefront with other leading companies.