The History Of Absenteeism Management Essay

The History Of Absenteeism Management Essay When employees intentionally make absence from work it is known as absenteeism. In todays working organisations everybody misses a day of work now and then. But when an employee misses too many days of work it can be a big problem for the organisation and this can cause serious problems when all other employees have to cover for the missing worker or in worse cases the work simply doesnt get done, which can cause low productivity or non availability of requested services, leading to bad impression on companys position and name. People often tend to have different perspectives or attach different meanings when viewing the topic of employee absenteeism. Absenteeism occurs when the employees of a company do not turn up to work due to any scheduled time off, any illness, any injury, or any other reason. If we look back the history, there is only a small written history of absenteeism in business literature, apparently because until the 20th century businesses had a clear rule, No work: no pay. Then labour unions forced the companies into agreements to allow employees to take time off from work for illness or vacations and the practice of offering paid sick days become widespread. These practices still vary among companies and union contracts and normally there is an average of four to ten sick days per year is standard. Companies have realized that human absence management policies are cost effective; even many companies were unwilling to off paid leave to their employees. In fact, there is an estimate in the current studies regarding absenteeism that those company who have effective employee absence strategies can reduce their overall payroll costs by atleast 10 percent. ABSENTEEISM COSTING THE BUSINESSES Most recent studies on absenteeism have claimed that missing employees cost companies millions of pounds in lost revenue each year. We know that absenteeism can be quite costly. It has been estimated that in the United States alone, absence causes a loss of 400 million workdays per years. Based on this estimates, several researchers have attached a dollar value to this of between $26 and $46 billion per year (Steers and Rhodes, 1978; Goodman and Atkin, 1984a). In Canada, this figure probably approaches $8 to $10 billion. The Confederation of British Industry (CBI, 1999) has carried out a survey and used its membership base to survey both private and public sector employers. This survey showed that the average number of working days lost per employee in the UK in 1998 was 8.5 days, which represented 3.7% of all working time available. Another important correlation showed that absence was positively associated with the size of the organisation, that is absence rates were higher in large organisations than in small organisations. In calculating time lost as a percentage of actual working time available, the survey was based on a 228 days working year. This figure is derived from taking out of 365 days, 104 days for weekends or rest-days, 8 public holidays and 25 days annual leave. For many organisations the figures of 228 would be reasonably proximate, but for others, a revised base would need to be used, for example within the education service. Table 1.1 Absence rates for manual and non-manual employees 1998 (1997 figures in brackets) Average Best performing quartile Employees Days lost % of working Days lost % of working time time Manual 9.4 (10.8) 4.1 (4.7) 5.5 2.4 Non-manual 7.6 (6.8) 3.3 (3.3) 3 1.4 All 8.5 (8.4) 3.7 (3.0) 4.1 1.8 Source: CBI, Focus on Absence, 1999. The other most recent survey on the common causes of absenteeism by BBC has revealed that within the UK 93% of workers cite cods and flu as their common reason for being away from their work. Recently BBC has reported that absenteeism is costing  £10.2bn a year and that is mainly through employees minor illness, stress and family responsibilities. A survey of more than 530 firms for the Confederation of British Industry estimated that 200m days were lost through sickness absence last year, an average of 8.5 days per worker. According to an annual survey report of CIPD in 2009, it is stated that the annual cost of absence, is highest in the following sectors of different organisations within UK: Average  £ per employee/year Public Sector  £784 Manufacturing and production employers  £754 Non-profit organisations  £698 Private services organisations  £666 However, the conclusions showed that there are only 41% of employers who are monitoring the cost of employee absence, a figure which has remained persistently low over the past few years.   Another company Hewitt Associates  which is based in  Lincolnshire,  Illinois  is a global  human resources  (HR)  outsourcing   and  consulting  firm which delivers a wide range of integrated services to help companies manage their total HR and employee costs and improve their workforces has confirmed that absenteeism is costing the organisations in UK more than  £1000 per employee almost every year. INTERNATIONAL COMPARISONS International comparison of absence rates is equally useful and informative. The title sick man of Europe was once given to Britain because of apparently poor industrial relations record. This title can be given to any other country now as absence rates in the UK are among the lowest of any EU member country. Table 1 illustrates this point: Country Short-term Absenteeism rate Long-term Absenteeism rate Denmark UK Austria Sweden Ireland Norway Netherlands France Germany Belgium Italy Portugal 3.5 3.6 4.1 4.4 4.5 5.0 5.5 5.6 5.6 5.8 6.9 8.0 9.1 5.5 12.7 3.0 10.4 13.3 11.1 6.5 6.6 5.5 11.2 Source: Adapted from CBI, Focus on Absence, 1989 THE MOST COMMON CAUSES OF ABSENCE There are two different classes of employees, manual and non-manual and the most common main causes of sickness absence for both of these classes have been identified as: Manual Non-Manual Minor illness (cold, flu, stomach upsets headaches) Minor illness (cold, flu, stomach upsets headaches) Back pain Stress Musculo-skeletal injuries Musculo-skeletal injuries Home/family responsibilities Back pain Stress Home/family responsibilities Recurring medical conditions Recurring medical conditions Injuries/accidents not related to work Other absences not related to ill-health The latest studies and surveys have revealed that an increase in stress related absence is continuing in number of employers these days. For both manual and non-manual workers, employers perceived that minor illness is the major cause of absence from the workplace. THEORIES RELEVANT TO ABSENTEEISM Over the past many years, there have been many studies and surveys conducted to discover what motivate people. The most recognised theories are Taylor (1856-1917), Mayo (1880-1949), Maslow (1908-1970), McGregor (1906-1964) and Herzberg (1923-2000). Because motivation is very much important not only at work but almost in all part of life too, there are so many new theories which are constantly being developed. MOTIVATION THEORY The word motivation is used to describe certain sorts of behaviour. The purpose of motivation theories is to predict behaviours. Motivation is not the behaviour itself, and it is not performance. Motivation concerns action and the internal and external forces which influence a persons choice of action (Mitchell 1987). Motivation encourages people happily to put more effort into doing something. Well-motivated employees will always feel fulfilled and happy in their respective workplace. Furthermore, the employees are to be expected to be more productive and generate work of a higher quality with lower rate of absenteeism. EXAMPLE A recent case study shows that Siemens, a well known company worldwide, believes that well motivated employees can add extra power into work in order to accomplish the necessary outcomes because they believe that their work is extraordinary. The motivated workforce is more confident to take pride in what they do and off course there is low rate of absenteeism because employees are happier to go to work. HERZBERGS TWO FACTOR THEORY Herzberg used the critical incidental method and his original study was chosen because of the growing importance in the business world and his study was consisted of interviews with 203 accountants and engineers  from different industries in the Pittsburgh area of America. The responses to these interviews were generally consistent and revealed that there were two different sets of factors affecting motivation and work. This led to the Two Factor Theory of motivation and job satisfaction. On the basis of his survey, Herzberg reported that employees tended to describe satisfying experiences in terms of factors that were intrinsic to the content of the job itself. These factors were called motivators and included such variables as: Achievement Recognition The work itself Responsibility Advancement and growth According to Herzberg theory these motivators who also can be known as satisfiers were associated with  long-term  positive effects in job performance while the hygiene factors (dissatisfiers) consistently produced only  short-term changes in job attitudes and performance, which quickly fell back to its previous level. In summary,  satisfiers describe a persons relationship with that she or he  does, many related to the tasks being performed.  On the other hand dissatisfiers have to do with a persons  relationship to the context or environment  in which she or he performs the job.  Ã‚  The satisfiers or motivators relate to what a person does while the dissatisfiers relate to the situation in which the person does what he or she does. So in summary according to Herzberg if the basic needs of an employee are being met at an organisation, the employee will always be willing to come to work and will be happy doing his job. Herzberg argued that extra compensation only work in the short term and other hygiene factors only avoid dissatisfaction and that satisfaction comes from intrinsic motivators. EXAMPLE Royal Bank of Scotland has implemented Herzberg Two Factor Theory and its working successfully at the bank. RBS has put the following few factors from Herzberg theory: The good work by employees  gets recognition The employees at RBS have a combined logic of success when the whole business does well They get extra responsibility and progress through regular performance reviews RBS rewards their employee when they do well in their work RBS also introduced flexible working for its all employees and these are adapted to suit the local needs of each RBS centre. Through its right to work flexibly theory RBS is continuously motivating its employee as if they are unable to come to the work on time due to an appointment, they always can come late and can cover their work through job sharing, home working or variable working hours. ATTRIBUTION THEORY Attribution theory suggests that we observe a persons behaviour and then try to establish whether internal or external forces caused it. If it is judged to be internal, it is seen as being under the persons control; if it is judged to be external, it is seen as a result of the situation. Attribution is said to be subjected to a number of considerations, because we judge actions in a context. For example, we judge how distinctive behaviour is and whether behaviour is unusual for a particular person. Attribution theory is very much relevant to absenteeism as for example the employee is absent from work and the circumstances are that his or her attendance record is exemplary, then the behaviour could be considered unusual and an external cause (that is, that the behaviour is outside the control of the individual) will be attributed. If the absenteeism fits in with the general pattern of behaviour, then an internal attribution will be attached (that is, it will be seen as being under the persons control). EQUITY THEORY The Adams Equity Theory is a simple theory which differentiates an employees inputs and the outputs. According to the theory, the judgment to this fair sense of balance serves to make sure that a strong and useful connection is achieved with the worker, with the overall result being satisfied and motivated workers. This theory states that optimistic outcomes and high levels of enthusiasm are likely only when employees recognize their behaviour to be fair. The thought behind Adams Equity Theory is to hit a strong balance here, with outputs on one side of the level and inputs on the other both weighing in a way that seems reasonably equal. If the balance is in favour of the employer then few employees may work to bring balance between inputs and outputs on their own, by asking for more reward or recognition. Others will be demotivated, and still others will look for substitute employment.   DOUGLAS MCGREGOR THEORY X THEORY Y According to Douglas McGregor there are two different views of human beings. He described under his Theory X, that workers come to work to do the work and raise no questions and receive their pay. While in his Theory Y he believed that workers are dedicated and want responsibility. McGregor strongly recommend that employers should treat all the workers as Theory Y because they will be more efficient. EXAMPLE Nuclear Decommissioning Authority (NDA) in UK has implemented McGregors Theory Y, as NDA wants its employees to be self-directed in their work and are always ready to accept high levels of responsibilities. NDA claims that with the help of this theory their employees absenteeism level is very low as everyone loves their work and they are more responsible to be at work on regular basis. ABSENTEEISM MEASUREMENT To measure worker absenteeism the most obvious way is to record how many days have employees not come in to work. The companies should have some sort of clock-in or accountability set-up making this step relatively simple. Once the numbers are available, surely it would be interesting to know how many of those workers were genuinely ill. Measuring absenteeism can serve as many as four purposes for organisations, which includes the following: Administering payroll and benefits programs Planning human resource requirements for production scheduling identifying absenteeism problems measuring and controlling personnel costs (Gandz and Mikalachki, 1979) Actual assessment and analyzing is a key aspect of managing absence effectively. Organisations must assess if they have complications with absenteeism, its extent and find out the best way to handle it. In the latest Chartered Institute of Personnel and Development (CIPD) absence survey, there were only a less than half of employers who monitor the cost of absence of their employee,  and there were just under  half of organisations who have set a target for reducing absenteeism and the only 38% of organisations benchmark themselves against other employers.   To analyse particular arrangement of absenteeism and underlying the basis, employers should acquire and use data, for example, the management approach of an appropriate manager or an increase in workloads. This can also provide the evidence of how absenteeism impacts on the bottom line and why it value investing in an effective absenteeism management programme. MEASURE TIME LOST To evaluate absenteeism there are a number of different measures that can be used, each of which can gives information about the different aspects of absenteeism. Some of the factors are described as under: LOST TIME RATE Lost time rate measure  articulate the percentage of the total time available which has been lost due to absence: Total absence (hours or days) in the period  x 100   Possible total (hours or days) in the period   For instance, if the total absence of the employees in the period is 155 person-hours and the total time available is 1,950 person-hours, the lost time rate will be:   155 x 100 = 7.95%   1,950   This can also be calculated separately for the individual departments of different groups of employees to uncover particular absence problems within an organisation. FREQUENCY RATE The frequency rate method shows an average number of absences per employee, which is expressed as a percentage. This does not give any indication of the length or duration of each absence period, nor any indication of employees who take more than one spell of absence and it is calculated as under:   No of spells of absence in the period  x 100   No of employees   For example, if an organisation employed on average 110 workers in one month, and during this time there were a total of 24 spells of absence, the frequency rate will be:   24  x 100 = 21.82%   110   To find out the individual frequency rate, we have to count the number of workers who take at least one interval of absence in the period, rather than to total number of intervals of absence. BRADFORD FACTOR This method expresses the persistent short-term absence for individuals, by measuring the number of spells of absence, and is therefore a useful measure of the disruption caused by this type of absence. It is calculated using the formula:   S x S x D S = number of spells of absence in 52 weeks taken by an individual   D = number of days of absence in 52 weeks taken by that individual   For example:   10 one-day absences: 10 x 10 x 10 = 1,000   1 ten-day absence: 1 x 1 x 10 = 10   5 two-day absences: 5 x 5 x 10 = 250   2 five-day absences: 2 x 2 x 10 = 40   The trigger points will differ between organisations. The underlying causes will need to be identified for all unauthorised absence. ABSENTEEISM CONTROL POLICIES The companies should have clear policies in place which support their business objectives and culture and this is the first step to managing absenteeism efficiently. Under the current legislation employers are required to provide their staff with knowledge on any terms and conditions relating to inadequacy for work due to the sickness or injury, including any arrangement for sick pay. Effective absenteeism policies must spell out clearly employees rights and responsibilities when taking time off from work due to sickness or any other reason. These policies should include: A clear idea of what absence is, how it can be defined and how it might be measured. An indication of the scope and scale of absence in the UK and elsewhere by sector, region and industry type An account of the likely causes of absence and how they relate to individuals, jobs, organisations and wider factors. Consideration of the legal environment within which absence must be managed. Examination of the equal opportunities implications of absence management, which particular regard to the Employment Relations Act 1999. Discussion of the ways in which work might be made more flexible to suit the needs of both the employer and the employee. Consideration of how a strategy for managing absence might be developed. Examination of the range of tactics that an employer might employ for the management of absence. HOW TO MANAGE ABSENTEEISM Before we discuss how to manage absenteeism we look the types of absenteeism. There are many other reasons why people take time off from work. These can be categorised as under: Non permitted absence or continuous lateness Long-term sickness absence Short-term sickness absence (uncertificated, self-certificated, or covered by a doctors fit note which replaced the sick note from April 2010) Other authorised absences:  for example,  annual leave; maternity, paternity, adoption, or parental leave; time off for public or trade union duties, or to care for dependents; compassionate leave; educational leave. Other than these above categories of absenteeism there are two main types of absenteeism, know as short term absenteeism and long term absenteeism. We discuss in detail how to manage these two main types of absenteeism: MANAGING SHORT-TERM ABSENCE Temporary absence is also known as absence interventions. The most effective interventions in managing short term absence include the followings: A proactive absence management policy Return-to-work interviews Disciplinary procedures for unacceptable absence levels Involving trained line managers in absence management Providing sickness absence information to line managers Restricting sick pay Involving occupational health professionals The most common method which is currently being adopted by many organisations is return-to-work interviews which can help identify short-term absence problems at an early stage. These return-to-work interviews provide an opportunity to managers to start a dialogue with staff over underlying issues, which might be causing the absence.   Tim Holden, the Managing Director of  FLUID, draws on more than 10 years experience as an award-winning recruiter and trainer. FLUID works with organisations to enhance their attractiveness to both current and future employees. Holden suggests that: The use of disciplinary procedures for unacceptable absence may be used to make it clear to employees that unjustified absence will not be tolerated and that absence policies will be enforced.   According to CIPDs recent survey it has been revealed that, only 12% of organisations use attendance incentives or bonuses as a tool of absence management according to our latest absence survey. MANAGING LONG-TERM ABSENCE The current studies and researches on long term absence have shown that absence of  eight days or more justify about one third  of total time lost through absence and absence of four weeks or more accounts for more than 15%. Consequently it is very vital that organisations have an approved strategy in place to help their employees to get back to work after a continuous period of sickness or injury-related absence. The knowledge of potential disability discrimination claims is also critical these days.   LINE MANAGERS ROLE To control and reduce the causes of absenteeism, line managers have a substantial role to play, either directly or indirectly. How managers behave is very important because it has a significant effect on employee health and comfort. Many recent researches show that line managers are the type of employees most likely to be reported as bullies within organisations. Management style within an organisation is also one of the top causes of stress at work.  Ã‚  The role and responsibilities of the line manager in the management of absence should be clearly defined. However, these days the role of line managers is paramount. It is the line managers responsibility to manager his or her department or unit. Therefore it is his/her responsibility to see that these resources are used as effectively as possible. This means that levels of attendance should be good and absence kept to a minimum. The line managers should follow the companys approach to management style, organisation and allocation of work, as this will be a vital part of any strategy to control absence. In addition it is his/her responsibility to follow the company absence polices and procedures to staff. In any organisations the managers need good communications skills to encourage employees so that they can feel free to discuss any problems they may have at an early stage so that they can be given support or advice by the managers before matters escalate. According to all the recent studies and surveys it is stated that despite of all the importance of line manager/supervisor involvement, there are only 50% organisations are training their line managers to get the skills needed to do this effectively. The organisations should train their line managers to get the following skills to handle the absenteeism properly and they should have a good knowledge of: Their companys absence policies and procedures What is their role in the absence management programme How to act upon any advice given by the doctor to the employee. All the related legal and disciplinary aspects of absence including potential disability discrimination issues   How to maintain absence record-keeping and understanding facts and figures on absence The role of occupational health services The proactive measures to support staff health and wellbeing Operation (where applicable) of trigger points Development of return-to-work interview skills Development of counselling skills. In addition, the line manager will be one of the main influences on an individuals view of the company attitude to absence. It is therefore important that the actions and words of line manager support the companys position. It a difference attitude is being taken on the management of absence, whether more strictly or leniently, it will cause problems for the individual manager and for the organisation. Line managers must be able to rely on the support of senior management for decision they take in line with the companys policy, their responsibilities are as under: To effectively organize and allocate work; To use an appropriate management style; To ensure that all staff are adequately trained for their role; To communicate the absence policy and procedures to all subordinates; To apply policy and procedures in a consistent and fair manner; To deal with requests for prior approved absence; To keep accurate and up-to-date records of absences; To investigate reasons for unexplained absences; To carry out return to work interviews; To instigate disciplinary procedures, when required; To provide adequate feedback to senior management; To ensure adequate personal development and training to be able to meet these responsibilities effectively. To support staff health and wellbeing by taking proactive measures for occupational health involvement To be a part of the absence management programme By restricting sick pay To changes work patterns or environment To induct rehabilitation programme There are also four typical components in the recovery of absence and return-to-work process, which are discussed as under: An up-to-date contact with sick employees   The line manager should ensure that a regular contact is maintained using both sensitive and non-intrusive approaches with the employee. This approach must be agreed with the member of staff and management and, also where appropriate, with the union or employee representative. Workplace controls or adjustments   There can be some obstacles which may cause delay, interruption or difficulties to an employees return to work. A risk appraisal can analyse measures or adjustments to assist workers return and stay in work. For example: Allowing a steady or step-by-step return-to-work, for example,  promoting an employee from part-time job to full-time job over a period of weeks To change work arrangement or management style to reduce work pressure and to give the worker more control Modifying the employees working hours, for example allowing flexible working hours to accommodate his/her family demands Co-coordinating the employees mobility. The use of professional advice and treatment   These days there are many occupational health professionals in every country, they can be consulted because they can play a major role to evaluate the reason for absenteeism, and also can carry out employees health assessments, and can assist the managers in preparation for a return to work. Return-to-work planning The management should have a return to work plan agreed by the employee and the line manager, and any other staff which is likely to be affected and this plan needs to include: The goals of the plan, alternative working hours, or a alternative job role The time period of the plan Information about the new working arrangements The reviews that will need to be made to make sure the plan is put into practice The dates when the plan will be reviewed This can be helpful if the management appoint someone who can coordinate the return-to-work process. This also can include the colleagues of the absent worker who can inform him/her of the progress, so that everyone appreciate the situation, as well as easing the alterations back to work and maintaining working relationships. TACTICS FOR CONTROLLING ABSENTEEISM There are many tools that can be used as a part of a structured plan of absenteeism. We discuss some of the tools to control absenteeism. In practice, these tools will be used in isolation but more probably several will be used in combination. PRE-EMPLOYMENT SCREENING: All reasonable steps should be taken to ensure that the employed staff is likely to be good attenders. One of the best indicators of likely future attendance rates is past attendance rates as many employers believe that pre-employment screening is a vital tool in absence management. There are number of simple steps that an employer can take to reduce the risk of employing a poor attender: Ask for information about absence on the application. For example, How many days absence have you had over the last two years? Ask about absence on reference requests. Ensure that those invited for interview are made fully aware of the expectations of the job. This would include duties, hours of work, work environment, standards of performance and conduct. Avoid the temptation to oversell the job at interview as this will result in disappointment and disillusioned employees and they will be more likely to be absent. Use pre-employment medical examinations to identify any potential problems. Note that disablement is not a reason not to employ an applicant, and employers must take great care to observe the terms o