Tit for Tat or chotchkey rewards often cheapen the experience and foster people to compare the value one innovation to the next, thus discouraging participation. Whether the innovation succeeds or fails is not material: focus on the concept of innovation not the outcome. This is about culture change.

My tech-driven company's attempt to do this has grown over the past year, but it is gaining success at fostering innovation:

Formalize Innovation - Make a well-defined program with ceremonies for recognition and reward as follows:

Require Self-Nominations - On a monthly basis, have employees nominate their innovations for review by the management team. Self nominations put individuals in the position of responsiblity for innovation, not just for recognizing innovation in other people.

Require Impactful and Innovative - The nomination has to have the potential to make a difference and has to improve the way something is done in the company. The idea does not have to succeed to pass the bar (a.la.: 9 of 10 startups fail).

Focus on Implementation - Ideas alone don't pass the bar. It doesn't matter whose idea it was, the implementer gets the credit.

Reward and Recognize - The most impactful and innovative entry (judged by management) gets recognition and a modest reward each month ($50 gift card). Give honorable mentions.

Sweeten the Pot - Nominees who clear the above criteria also get entered into a quarterly and annual prize drawing (xbox/ps3 and bigscreen respectively).

Also, the text-only slashdot.org/palm version of the homepage includes ALL idle entries making it harder for mobile users to enjoy the slashdot experience on the road. And there's no login option from the /palm page to take advantage of predefined user controls.