Employees enjoy having a voice in the business. Even if you don't use their suggestions, they appreciate the chance to voice their views. If you use their suggestions, make sure that they get acknowledged, especially with their superiors. If you can't implement their suggestions, give an explanation why and encourage them to keep thinking about how the business can be improved.
From: Jim Karter
Subject: <subject of memo>
Thank you for taking the time to submit your suggestion regarding <subject of employee suggestion>. We really appreciate our employees taking an interest in our <company/organization>.
<Reason you will/won't implement suggestion>.
Please don't hesitate to pass on any other suggestions you may have. There's always room for improvement.