Exercise 7.1

• Subject: Establishment of Suggestion System

• We announce the establishment of a Suggestion System. This new program is designed to provide a means for hourly employees to submit suggestions to the company management concerning operations and safety. The program will also provide an award system to compensate non-management employees for implemented suggestions.

• Here is how the program will work: beginning October 1, suggestions can be submitted by hourly workers to the company on Form 292, which will be furnished to all plants and their departments by October 1. On the form, a submitting employee should include the suggestion, his or her name, and the department number. The form can be deposited in a suggestion drop box, which will be located near the Personnel Office in each plant.

• Any suggestion dealing with the improvement of operations, safety,working conditions or morale is eligible for consideration. The award structure for the program will be as follows:

• 1. For an implemented suggestion which improves safety or efficiency with no associated monetary benefits or cost reduction: $50.00

• 2. For an implemented suggestion which makes or saves the company money: 10% of the first year’s estimated annual savings or additional revenue.

• It is hoped that we will have a good initial and continuous response from all hourly employees. This year, we are out to try to cut production costs, and this program may be the vehicle through which we will realize new savings and increased revenues. New idea which can truly increase operational efficiency or cut safety problems will make the company a nicer place for all employees. A safer work environment is a better work environment. If department operations can be made more efficient, this will eventually make everyone’s job just a little easier, and give that department and its employees a sense of pride.