Introduction to Absenteeism

Absence is a phenomenon that is present in organizations that are

large and small, public or private, urban or rural. It is an issue of
concern for many managers because it is often costly for the
organization as well as for individuals.

Absenteeism and turnover in the workplace are complex phenomena that have
implications for organizations and individuals alike. The employment culture is changing.
It is now relatively common to change jobs frequently, rather than to grow with one
company throughout the employment life. This kind of voluntary turnover directly affects
the performance of the organization. So now all organizations are highly concerned to
keep their valuable employees. Each day completed by an employee is an investment to
an organization, to leave before the full term is to get no return on the investment. Many
companies are floundering today in their attempts to improve employee retention because
they have placed the responsibility for it in the hands of human resources instead of the
managers (Leigh Branham, 1997). Most employees make a number of transitions
between jobs during their working lives. These may include both job changes
within a single employer and leaving one firm to
take a job to another firm.. In order to
make sure that their employees are good performer
they have to know first, the reasons of
dissatisfaction and also the reasons of leaving
organization as a dissatisfied employee.
There can be many different reasons for taking
decisions regarding staying or not to staying with
an organization. The loss of an organization’s
employee can be divided into three broad groups,
induction crises, natural wastage, and retirement
(Bennisonn, and Casson, 1984). The reason for the
induction crisis can be found in jobs not fulfilling
employees’ expectations. And it happens within
very short period of time. There is a strongly held
belief that the rate of natural wastage responds to
the level of morale within the organization. This is
broadly true but there is an overriding factor that
operates first: the level of vacancies in the labour
market for the occupation under study is a much
more important variable. Retirement can be
predicted with a reasonable degree of accuracy.
Retirement rules are usually based on age or
lengths of service or a combination of both
(Bennisonn, and Casson, 1984).
Talented workers want to feel they are being paid
comparably to what other companies pay for
similar work in the industry. Equity Theory
recognizes that individuals are concerned not only
with the absolute amount of rewards for their
efforts but also with the relationship of this amount
to what others receive (Robbins, 1999). They also
care about being paid equitably with others in
similar positions making comparable contributions.
When these two conditions exist along with
interesting and meaningful work, acceptable
working conditions and good management
practices, the prospect of making a little more
money in an another organization where these
softer factors are unknown is usually not enough to
pull the employee away (Branham, 1997).
Although many companies use contract employees
to address fluctuations in business, working side by
side with someone who is making twice the rate of
pay without any commitment or loyalty to the
company can be a real morale killer (Branham,
1997). Keeping good employees has more to do with how
organization manages than what they pay. They
stay or leave sometimes based on their relationship
with their manager and their opportunity to both
contribute and advance in their job. One recent
study showed that 50 percent of the typical
employee’s job satisfaction is determined by the
quality of his/her relationship with the manager.
Reducing turnover also starts with commitment of
top executives. (Branham, 1997). Work
environment is another important factor, which has
influence on job retention

Labor Scheduling with Employee Turnover and Absenteeism

1. Introduction
A host of direct and indirect costs arise from the wake of each employee who voluntarily
leaves an organization. Obvious expenses include the employer's recruiting, hiring, and
training
costs for a replacement employee. Until the vacancy is filled, employers may also face
additional overtime costs, reduced productivity, increased customer queue times, lost
sales and
business opportunities, and the likelihood of additional turnover due to the extra work
shouldered
by coworkers of the departing employees (Herman, 1997; McConnel, 1999; Richardson,
1999).
Turnover is not just expensive; it is pervasive, arising in virtually all professions. Twenty
percent of all new school-teachers and forty-four percent of all new lawyers quit within
three
years (Cooper, 2000; Flaherty, 1999). The average annual turnover rate (the number of
annual
resignations divided by the average workforce size) among call center employees is 31
percent
(Karr, 1999), although larger operations (500 or more agents) average 61 percent/year.
Zuber
(2001), citing declining turnover rates for limited-service restaurant workers, reported
that 1999
turnover averaged 123 percent in this industry.
Voluntary turnover problems also tend to be persistent and difficult to eliminate.
Leonard's
(1998) survey of human resource professionals found that 55 percent took measures to
improve
turnover, but only 10 percent reported noticeable improvements. Furthermore, many
firms report
that it takes 75 - 90 days to fill a vacant position (Fitz-enz, 1997; Matson, 1999),
followed by
weeks or months of training before a newly-hired employee becomes proficient.
While turnover results in permanent losses of human capital, unexpected absences due to
illness or personal matters consume 2.5 percent of all scheduled work hours in the U.S.
service
3
sector (Bureau of Labor Statistics, 2001). Some industries, however, suffer much higher
absenteeism rates. Call center managers, for example, report losing 12 - 16 percent of all
scheduled work hours to absenteeism (Call Center Ops, 2001).
The need to protect service delivery systems from turnover and absenteeism is well
established. Turnover planning models have been developed for many industries and
professions, including banking (Jones et al, 1973), engineering (Lapp & Thompson,
1974), law
enforcement (Leeson, 1981), and the armed services (Charnes et al., 1972; Collins, et al,
1983;
Eiger et al., 1988). Typically, these models anticipate the effects of turnover on existing
staff and
estimate the number of new employees that should be recruited into the organization each
year at
each grade to satisfy projected future staffing needs (Bartholomew, Forbes & McClean,
1991).
In this paper, however, we focus on the day-to-day operational impact of turnover and
absenteeism, and developing techniques that mitigate their impact through short-term
staffing
and scheduling decisions. Our premise is that both service demand and employee
availability are
random variables. We model the day-to-day flux of employee resignations and new hires
as a
Markov process, then derive estimates for the probabilities of realizing different
incumbency
levels. From the underlying employee survivor function, we predict workforce experience
levels
and proficiencies. Modeling the service delivery system as a multi-server queue, we
estimate
revenue losses due to reneging when customer patience decays exponentially with
waiting time.
Finally, we devise a labor staffing and scheduling model that integrates workforce
incumbency
probabilities, experience levels, and random employee absenteeism with the object of
maximizing expected profit under stochastic demand and impatient customers. The
model
determines the nominal workforce size, and how those employees should be deployed
over time,
to compensate for anticipated turnover and absenteeism.
4
To identify operating environments likely to benefit from this model, we compare its
solutions with those from a conventional profit-oriented labor staffing and scheduling
model that
assumes stochastic service demand and deterministic labor supply. Our experiments
reveal that
even with modest turnover rates and brief job vacancies, conventional labor scheduling
models
consistently misstate ideal staffing levels and overstate expected profits and service
levels. This
limitation is more pronounced as a firm's average service rate or profit margin decreases,
and as
either its average turnover rate, mean job vacancy duration, absenteeism, or training time
increases. In several operating environments, the proposed model improved expected
profit by
more than 10 percent over that earned with a conventional labor staffing and scheduling
model.
The rest of the paper is organized in the following manner. In Section 2, we develop a
framework for estimating workforce incumbency levels and experience levels. In Section
3, we
characterize a multi-server queuing system with customers whose patience decays
exponentially
with queue time. In Section 4, we describe our labor staffing and scheduling model for
stochastic service demand, impatient customers, and stochastic labor availability. In
section 5,
we describe our experiments to compare the proposed model with conventional
techniques and
discuss the results. Our summary of the project appears in Section 6.
2.3 Absenteeism
Even those employees who fully intend to continue their relationship with the
organization
occasionally get sick or must attend to personal business during the times they are
scheduled to
work. In 2000, U.S. industry lost 2.0% of all scheduled work hours due to unscheduled
absences
(Bureau of Labor Statistics, 2001), and 2.5% in the service sector. For industries like call
centers, however, anecdotal reports of 12 - 16 percent absenteeism are not unusual (Call
Center
Ops, 2001). CCH (2000) reports that 41 percent of the HR professionals responding to
their
annual survey now view unscheduled absenteeism as a serious problem in their
organizations.
Furthermore, few of the managers surveyed expect absenteeism to improve in the near
future.
Mitchell (2001) observed that the direct costs of absenteeism are a significant component
of
total payroll expense. For example, employee benefit plans often indemnify workers from
incidental absence and short-term illness. However, unscheduled absenteeism also
adversely
affects productivity, especially when compounded by employee turnover. Let A be the
ratio of
scheduled labor hours lost to unplanned absenteeism divided by total scheduled hours.
Although
H workers may have been originally scheduled for duty at a particular time, turnover and
absenteeism will reduce the expected number of workers who actually report for duty to
H(1− A)W W .

Absenteeism and Turnover

When contrasting leavers with stayers in these data, leavers can be distinguished since they
abandon a median pattern of perfect attendance. In responses taken at the end of the first
month, there are no differences among eventual leavers and stayers, as the median number of
absences is zero. Figure 2 shows that increases in absenteeism precede turnover in four of the
five
leavergroups. Stayers show a remarkably consistent pattern; the median number of absences
is zero for both nurses and accountants at all four time periods.
Knowledge of the structure of withdrawal and the prediction of withdrawal behaviors will be
enhanced if a temporal ordering is specified among commitment, absenteeism, and turnover.
Among leavers, there are simultaneous decreases in commitment and increases in
absenteeism, for both nurses and accountants, prior to exit.
The accountants among third-wave leavers partly continue the trend of simultaneous changes.
There are initial declines in commitment and increases in absenteeism, but a decline in
absenteeism immediately preceded exit. A pattern of sequenced change is apparent among
nurses who left after the third time point. In this case, a decline in commitment precedes the
rise in absenteeism which, in turn, is followed by exit. This sequenced pattern is also present
among nurses leaving after the fourth time point. Of the two trends just described, more
evidence supports the notion of simultaneous changes in the precursors of turnover. Given
these data and the fact that the measurement intervals in the present study are much shorter
than is common in most turnover studies, it is concluded that it is unlikely that researchers
will find strong evidence of sequential withdrawal among new employees. The impact of
occupational differences, which confound the withdrawal pattern in these data, is unknown.
Additional studies are required to explore the significantoccupational differences

Employee Turnover
Turnover is becoming a serious problem in today's corporate
environment. The employment culture is changing as well. It is
now relatively common to change jobs every few years, rather
than grow with one company throughout the employment life as
was once commonplace. In addition, employees are
increasingly demanding a balance between work and family life.
Turnover costs for many organizations are very high and can
significantly affect the financial performance of an organization.
Direct costs include recruitment, selection, and training of new
people. Much time and expense go into this process. Indirect
costs include such things as increased workloads and overtime
expenses for coworkers, as well as reduced productivity
associated with low employee morale. Estimated costs vary
from organization to organization, some as low as a few
hundred dollars to as high as four times the annual salary of the
employee.
CAUSES FOR TURNOVER.
There are many potential causes for turnover. Area economic
conditions and labor market conditions affect general turnover
rates and can be very difficult to manage. However, certain
causes associated with turnover in any specific job or
organization can be managed. These include such things as
non-competitive compensation, high stress, working conditions,
monotony, poor supervision, poor fit between the employee and
the job, inadequate training, poor communications, and
organization practices.
For a company to develop a retention strategy, several steps
must be taken. First, they must assess the current situation and
measure the turnover rate in their company. Turnover is calculated
simply by dividing the number of annual terminations
by the average number of employees in the work force.
A company must also measure the cost of turnover, develop
retention strategies, and plan for some expected turnover and a
changing workforce culture. Employers must recognize that
quality of work life is becoming more and more important to
employees.
What initial steps can be taken to reduce turnover? First, hire
the right people and continue to develop their careers.
Does your company have an ongoing career development
program, tuition reimbursement, or skills training program? An
investment in upgrading the workforce is one of the best
investments a company can make when looking at long-term
growth. Hiring the people that are a good "fit" with the culture of
the organization—meaning that their values, principles, and
goals clearly match those of the company—and then training as
necessary will go a long way toward ensuring employee loyalty
and retention.
Second, most companies with low turnover rates are very
employee oriented. They solicit input and involvement from all
employees and maintain a true "open-door" policy that avoids
closed-door meetings. Employees are given an opportunity for
advancement and are not micro-managed. Intrinsic rewards are
critical. Employees must believe they have a voice and are
recognized for their contribution. Remember that "trust" and
"loyalty" are a two-way street. Does your company's culture
encourage open communication and employee input?
Third, develop an overall strategic compensation package
that includes not only base and variable pay scales, but longterm
incentive compensation, bonus and gain-sharing plans,
benefit plans to address the health and welfare issues of the
employees, and non-cash rewards and perks as well. To be
competitive in today's labor market, most companies find it
necessary to offer a standard benefit package, including health,
dental, and life insurance, vacation and leave policies, and
investment and retirement plans. But what more could be done
that would be cost effective toward creating an employeeoriented
work environment?
If employee welfare is a genuine concern, what about child
care? How much employee absenteeism is attributable to not
having a dependable babysitter? Although the costs and
liabilities involved in providing onsite day care can be
prohibitive, perhaps a company could subsidize childcare in
some manner. Sometimes, just negotiating rates for your
employees with area childcare providers could be very helpful.
Maybe some kind of a company match would be possible.
Household chore assistance is another possibility that is being
used by some companies.
Consider other options—such as alternative work schedules or
flextime, or perhaps preventative health care and wellness
programs such as fitness center memberships—as possible
cost-effective benefits. Don't forget that perks or non-cash
rewards to recognize exceptional performance can be critical.
Service recognition, event tickets, trips, and public recognition
can send strong messages to the public regarding company
culture and values. Simply examine the issues and needs of
your employees and try to develop creative programs to
address these needs.

The major causes of voluntary absenteeism are discussed below:

Crew cohesion
The working crew's relationship with each other had the strongest influence on
absenteeism. An environment that fostered the mutual respect of the crew members
would reduce absenteeism because workers want to remain respected members of the
crew and because peer pressure would be brought to bear in the event a worker resorted
to absenteeism. Absenteeism is lowest when there is a strong "esprit de corps" in the
crew. Because of this team spirit, workers will feel that they are important and vital
members of the crew.
This cohesion can be used to reduce absenteeism by maintaining consistency within the
crew. Attempts should be made to develop crews which work well together and have an
"esprit de corp." Every effort should be made to keep those crews together as much as
possible.

Negative Reinforcement for Absences

There is a direct correlation between negative reinforcement for absences and the rate of
absenteeism on a project. Criticism of worker absenteeism by crew foreman reduces the
incidence of absenteeism. Management plays a big roll in how an employee perceives
absenteeism. If supervisors and foreman do not discuss absenteeism with abusers,
workers will perceive that management does not consider absenteeism important. Most
company's have policies toward absenteeism, these policies must be made known to all
employees. Just like safety, absenteeism is a topic which can be discussed at lunch box
meetings and during morning work assignments. Written policy should be posted in
plain sight of all employees and management needs to enforce the policy.

Positive Self-Image
The fact that crew cohesion is related to lower absenteeism rates, indicates that positive
factors exist in the workplace which cause workers to want to be in attendance. These
positive factors come from work that is perceived as challenging and mentally
stimulating. High self-esteem, when derived from the work performed, reduces
absenteeism.
Supervisors and managers may look to rotate job assignments on routine tasks, solicit
worker input on job accomplishment, or give workers the freedom to decide how certain
tasks will be completed. Participative management is an excellent tool by which the
ideas of workers can be given proper consideration. In fact, any form of recognition will
be favorably received by the workers.

Job Security
If a company has a strong policy towards absenteeism, i.e. dismissing abusers, the job
security for absent-prone workers is reduced. This may be a strong influence in an area
where construction jobs are in short supply. If construction is booming in the area or
workers perceive that jobs are readily available this policy will have less influence.

Travel Distance to Work

It appears intuitive that absenteeism would be greater for those workers traveling greater
distances. A long commute can be fatiguing in itself, and it can reduce the enjoyment
received from working. In addition, the effects of bad weather, may cause some workers
to be absent in order to avoid the long drive to work. Management only has a limited
amount of options available in this area. Travel distance can be considered when
assigning workers to construction sites. Absenteeism was particularly low among
workers who lived within ten miles of the construction site. Carpooling is another
alternative available. Management can encourage workers to carpool by posting or
publicizing names and telephone numbers of workers interested in carpooling from a
given locale. Carpooling can also build a feeling of camaraderie among workers and
dependence on each other, both of which can reduce absenteeism.

Turnover
Higher rates of absenteeism are present in work crews that have higher rates of turnover.
High turnover rates may indicate that there are other problems in the work environment.
Management needs to investigate the cause of high turnover rates in an effort to reduce
absenteeism.

Management -caused Delays

Job frustrations can be related to absenteeism. Workers want to feel productive, and
factors that hinder this productivity will lead to frustrations and possibly absences. Such
frustrations are of interest if management can reduce or eliminate them. Higher rates of
absenteeism are reported where workers are subject to greater instances of management
-caused delays. Management must accept the responsibility for some of the problems in
the workplace. Managers must systematically identify all areas where delays are being
encountered and work to reduce avoidable delays. Analysis of the job cost records or
delay surveys are an excellent place to start to identify delays.

Reasons for high turnover, attrition and absenteeism rate

Worldwide, the following are the statistics that reflect the cause of attrition in the
industry. The study is based on a sample of 3149 employees, appropriately
categorized into the four employee needs as :

1. The Need for Trust: Expecting the company and management to

deliver on its promises, to be honest and open in all communications
with you, to invest in you, to treat you fairly, and to compensate
you fairly and on time.
2. The Need to Have Hope: Believing that you will be able to grow,
develop your skills on the job and through training, and have the
opportunity for advancement or career progress leading to higher
earnings.
3. The Need to Feel a Sense of Worth: Feeling confident that if you
work hard, do your best, demonstrate commitment, and make
meaningful contributions, you will be recognized and rewarded
accordingly. Feeling worthy also means that you will be shown
respect and regarded as a valued asset, not as a cost, to the organization.
4. The Need to Feel Competent: Expecting that you will be matched
to a job that makes good use of your talents and is challenging,
receive the necessary training to perform the job capably, see the
end results of your work, and obtain regular feedback on your
performance.

On being asked the question, "Why do you want to leave?", the answers were
mostly in tandem and could be categorized into the following 20 reasons.

1. Limited Career Growth or Promotional Opportunity (16 percent),

indicating a lack of hope.
2. Lack of Respect from or Support by Supervisor (13 percent),
indicating a lack of trust or confidence.
3. Compensation (12 percent),
indicating an issue of worth or value.
4. Job Duties Boring or Unchallenging (11 percent),
indicating a lack of competence and fulfillment in the work itself.
5. Supervisor’s Lack of Leadership Skills (9 percent),
indicating a lack of trust and confidence.
6. Work Hours (6 percent), including comments ranging from undesirable
work schedule, to inflexibility, to overtime (too much or
too little), to undesirable shift—reasons
indicating a lack of worth,inasmuch as the organization, in their minds, did not view
their satisfaction as important enough to warrant a change.
7. Unavoidable Reasons (5 percent), generally considered unpreventable
by the organization and including excessive commuting distance,
retirement, birth of a child, child-care issues, relocation,
other family issues, career change, too much travel, return to
school, and death or illness in the family.
8. Lack of Recognition (4 percent),
indicating a lack of worth.
9. Favoritism by Supervisor (4 percent),
indicating a lack of trust.
10. Supervisor’s Poor Employee Relations (4 percent),
indicating a lack of trust.
11. Poor Working Conditions (3 percent),
pertaining mostly to undesirable physical conditions, indicating a lack of worth.
12. Training (3 percent), pertaining mostly to insufficient offerings,
poorly conducted training, or the denial of permission to attend
training—all indicating the lack of perceived worth.
13. Supervisor’s Incompetence (2 percent),
indicating a lack of trust and confidence.
14. Poor Senior Leadership (2 percent), same reasons as those given for
next level management, plus lack of clear vision or direction—
indicating a lack of trust or confidence.
15. Supervisor’s Lack of Technical Skills (1 percent),
indicating a lack of trust and confidence.
16. Discrimination (1 percent), indicating a lack of trust and hope.
17. Harassment (1 percent), indicating a lack of trust.
18. Benefits (1 percent), indicating a lack of worth.
19. Coworkers’ Attitude (1 percent), indicating a lack of trust.

These encompass all the possible reasons and there is very little other than these
that may be responsible for attrition.

Generally, the supervisor is the one who is held responsible... remember the
quote..'People do not leave jobs but their bosses'. There are times where ppl leave
even without new opportunities at hand.

Also, HR needs to concentrate on the cases where attrition is due to JDs not been
communicated or designed properly or KRAs have been designed without appropriate
vision and framework.

Apart from these, if more than 20% of the attrites are joining the same
organisation / group, you have a major poaching issue at hand. This needs to be
solved at a legal level or in appropriate discussion with the so-called poacher.

RECOMMENDATION

Current thinking suggests that organizations should

aim for an optimal rate of turnover rather than the
lowest possible rate. One scholar suggests that the
optimal rate occurs where the curve of turnover
costs crosses the curve of retention costs. So
organization can reduce turnover, but only by
incurring retention costs, such as higher salary,
better benefits, quality-of work-life and
development programs, and so on (Fisher, Schoenfeldt,
and Shaw, 2004). In addition, employees
should give opportunities to fulfill their increasing
demand, a balance between work and family life.
Again, employment turnover costs in many
organizations are very high and can significantly
affect the financial performance of an organization.
It is possible, though not easy, to put figure on
these costs to estimate the actual dollar loss from
departure of an employee (Cascio, 1991). Turnover
costs like direct- include recruitment, selection, and
training of new personnel, which process takes
much time and also expenses. Turnover costs like indirect
include such things as increased workloads
and overtime expenses for coworkers, as well as
reduced productivity associated with low employee
morale. This situation might lead one to believe
that all turnover is dysfunctional and that the
lowest possible rate of voluntary turnover would be
best. However, this is not necessarily true.
Turnover also has benefits. An organization with a
turnover rate that is too low may become stagnant
and hidebound, lack of opportunities for employees
to move up, and retain poor performers it would be
better off without (Fisher, 2004). Organization
need to calculate cost and benefits of voluntary
turnover and balance with the
organizations overall strategy.

Reducing Absenteeism
Employee absenteeism is a problem best resolved by taking the
following four positive interventions versus taking a negative or
punitive approach.

Change Management Style: We are all aware of the fact that when
employees saY they are ill, it does not mean they are truly too
physically ill to work. One reason, outside of illness, that employees
are absent is stress, and the number one reason employees are
stressed has to do with their relationship with their
manager/supervisor. Management styles that are too authoritarian
tend to promote high levels of absenteeism among employees.
Authoritarian managers are managers who have poor listening skills,
set unreachable goals, have poor communication skills, and are
inflexible. In other words, they yell too much, blame others for
problems, and make others feel that it must be their way or the
"highway." Authoritarian managers tend to produce high absenteeism
rates. By identifying managers who use an authoritarian style, and
providing them with management training, you will be taking a
positive step not only toward reducing absenteeism, but also reducing
turnover, job burnout, and employee health problems such as
backaches and headaches.
Change Working Conditions: By working conditions it is not meant
that .we are referring to well-lighted climate controlled building. The
working conditions here means, coworker relationships. Not only
does relationship stress occur between the employee and manager,
but it also exists between employees. Frequently employees say they
did not go to work because they are fearful of or angry with another
employee. These employees usually report they just could not deal
with "so and so" today, so they called in ill. Companies that adopted
policies and values that promote employee respect and

professionalism, and promote an internal conflict resolution

procedure, are companies that reduce employee stress. A reduction
in employee stress reduces employee absenteeism.
Provide Incentives: Giving employees incentives for reduced
absenteeism is not the same as rewarding or giving employees
bonuses for reduced absenteeism. An incentive provides an
employee with a boost to their motivation to avoid unnecessary
absenteeism. It simply helps the employee decide to go to work
versus staying home and watching Jerry Springer. The types of
incentive programs used by companies are numerous. Some
companies allow employees to cash-in unused sick days at the end
of every quarter, others give an employee two hours of bonus pay for
every month of perfect attendance; and still others provide employees
with a buffet lunch, a certificate of achievement, or even a scratch-off
card concealing prizes. The type of incentive program that your
company uses should be one created especially for your company.
You can create an incentive program tailored to your unique company
by allowing employees to help you develop the incentive program.
For example, your employees may not care about receiving a $25.00
U.S. saving bond for perfect attendance, but they might respond very
well to being able to leave one hour early on Friday if they have
perfect attendance all week. The duration of the incentive program is
also very important. Once again allow your employees to help guide
you to determine the length of time between incentives. Some
companies find that they can simply reward employees with perfect
attendance once a year, while others decide once a month is best,
and still others decide once a week works best. The general rule of
thumb is to reward workers more frequently the younger they are and
the more difficult the work is to perform. Also, it is best to start with
small incentives and work up to larger ones if necessary.
Develop an Attendance Policy: Every company should have an
attendance policy. An attendance policy allows a manager to
intervene with an employee who is frequently absent. Besides stress
as a primary reason for employee absenteeism, other causes relate
to alcoholism, domestic violence, and family problems. If you confront
an employee about his or her frequent absenteeism, and they inform
you it is due to personal problems, consider referring the employee to
an Employee Assistance Program (EAP).

By incorporating the above four strategies we can reduce

absenteeism and which will in turn will reduce employee burnout,
turnover, poor morale, and workplace negativism.

Recommendations to Help Reduce

Absenteeism and Turnover
As most contractors are aware, too much absenteeism and turnover can adversely affect
labor productivity. Finding ways to effectively deal with these problems is an
industrywide challenge. Even an effective program will become less so when there is
plenty of work to go around. And, of course, the behavior of some employees won’t
change, no matter what the company does. Yet, it is well worth it to proactively address
these problems. Many suggestions for reducing absenteeism and turnover presented in
the categories below were provided.

1. Redefine Overtime

It was established that a common practice for electricians is to miss a day of regular pay
to work hours that pay time-and-a-half. Although they have taken a day off, they still
work a 40-hour week but get overtime pay for any hours beyond regular work hours.
Such workers, in effect, have given themselves a raise. Some companies have redefined
overtime in their labor agreements as a way of addressing this problem.

It was also found that companies should not offer overtime as an incentive to keep
workers from moving to other jobs. This approach can backfire and will adversely affect
budgets.

2. Use Incentive Programs

Mixed responses about incentive programs were noticed. Most of the electricians
claimed these programs would help reduce their absenteeism and turnover. However,
management believed that incentive programs don’t work. They felt that electricians
already receive good wages. Although the effectiveness of incentive programs was not
studied, many ideas from respondents within the research were received. Following are
some of the responses we received:

• On larger projects, all employees who work 40 hours per week for all periods
throughout the month are eligible for a drawing to win a prize at the end of the
month.
• Every week, if 40 hours are worked the previous week, a ticket is earned. Every
week during a large project, small prizes are up for lottery by drawing a ticket. At
the end of the project, the accumulated tickets are put into a hat, and one name is
drawn for a new vehicle or other large prize.
• On large projects, workers would get a raffle ticket every day they show up on
time and show a clear safety record. At the end of every month, have a raffle.
Then at the end of the job, raffle a high-priced item. This would promote safety
and reduce tardiness and absenteeism.
• Workers should receive a reward of tools if 40 hours are worked on a consistent
basis.
• A bonus (shared with apprentices) goes to the lead installer for completing a
project in fewer hours than estimated while maintaining a quality of work
acceptable to the company. This program promotes teamwork.
• Set up a program where the electricians get a certain bonus for every hour worked
but have to have 40 hours worked in a week, or give workers an extra $100 for
working 40 hours the week before.
3. Change Work Schedules

Electricians reported that one way to reduce absenteeism was to schedule 40 hours in four
days instead of five. A schedule of 10 hours per day, Monday through Thursday, would
leave electricians time on Fridays to conduct business or rest. A missed day under this
schedule would also result in a higher financial loss for workers. Another suggestion was
to schedule four 9-hour days with a half-day on Friday.

4. Establish Safe Work Sites

Research showed that injuries play a key role in absenteeism. Electricians also reported
wanting to work on safe construction sites. Potentially dangerous tools, equipment, and
materials exist on all construction sites. Therefore, an ongoing, proactive safety program
can significantly reduce both absenteeism and turnover. Having a good safety record can
result in a company becoming a company of choice. A company of choice is one that
proactively inspires worker productivity and loyalty and thus, has fewer problems with
absenteeism and turnover.

5. Become a Company of Choice

Many of the companies that were surveyed said they did not have much of a problem
with turnover simply because they were a company of choice. Companies of choice
enjoy a stable workforce because their programs and policies build worker loyalty.
Following are some of their methods:

• Provide safe work sites

• Treat workers with respect
• Provide lunch
• Host company get-togethers
• Promote an “open-door” policy between workers and management
• Provide training or assistance with training
• Provide daycare or assistance with daycare
• Provide flexible schedules

6. Record Attendance Publicly

Supervisors can post the attendance record where all employees can see it every day.
Workers can track their own attendance and also see clearly who is not showing up for
work on a regular basis. This technique demonstrates that management values attendance
and takes absenteeism seriously. Workers who have already missed some time may be
reluctant to see more absences marked next to their names.

How to Deal with Employee Absenteeism

For Supervisors/Managers:
Recently, I was asked by a manager how he should deal with the fact that on any
given day 10% of his employees are absent from work. I informed the manager
that the problem of employee absenteeism is a problem best resolved by taking
the following four positive interventions versus taking a negative or punitive
approach.

Change Management Style: We are all aware of the fact that when employees
call in ill, it does not mean they are truly too physically ill to work. One reason,
outside of illness, that employees are absent is stress, and the number one
reason employees are stressed has to do with their relationship with their
manager/supervisor.

Management styles that are too authoritarian tend to promote high levels of
absenteeism among employees. Authoritarian managers are managers who
have poor listening skills, set unreachable goals, have poor communication skills,
and are inflexible. In other words, they yell too much, blame others for problems,
and make others feel that it must be their way or the "highway." Authoritarian
managers tend to produce high absenteeism rates. By identifying managers who
use an authoritarian style, and providing them with management training, you will
be taking a positive step not only toward reducing absenteeism, but also
reducing turnover, job burnout, and employee health problems such as
backaches and headaches.

Change Working Conditions: The employees in your company probably work

in a well-lighted climate controlled building. The working conditions I am referring
to relate to coworker relationships. Not only does relationship stress occur
between the employee and manager, but it also exists between employees.
Frequently I hear employees say they did not go to work because they are fearful
of or angry with another employee. These employees usually report they just
could not deal with "so and so" today, so they called in ill. Companies that
adopted policies and values that promote employee respect and professionalism,
and promote an internal conflict resolution procedure, are companies that reduce
employee stress. A reduction in employee stress reduces employee
absenteeism.

Provide Incentives: Giving employees incentives for reduced absenteeism is

not the same as rewarding or giving employees bonuses for reduced
absenteeism. An incentive provides an employee with a boost to their motivation
to avoid unnecessary absenteeism. It simply helps the employee decide to go to
work versus staying home and watching Jerry Springer.

The types of incentive programs used by companies are numerous. Some

companies allow employees to cash-in unused sick days at the end of every
quarter, others give an employee two hours of bonus pay for every month of
perfect attendance; and still others provide employees with a buffet lunch, a
certificate of achievement, or even a scratch-off card concealing prizes. The type
of incentive program that your company uses should be one created especially
for your company. You can create an incentive program tailored to your unique
company by allowing employees to help you develop the incentive program. For
example, your employees may not care about receiving a $25.00 U.S. saving
bond for perfect attendance, but they might respond very well to being able to
leave one hour early on Friday if they have perfect attendance all week.

The duration of the incentive program is also very important. Once again allow
your employees to help guide you to determine the length of time between
incentives. Some companies find that they can simply reward employees with
perfect attendance once a year, while others decide once a month is best, and
still others decide once a week works best. The general rule of thumb is to
reward workers more frequently the younger they are and the more difficult the
work is to perform. Also, it is best to start with small incentives and work up to
larger ones if necessary.

Develop an Attendance Policy: Every company should have an attendance

policy. An attendance policy allows a manager to intervene with an employee
who is frequently absent. Besides stress as a primary reason for employee
absenteeism, other causes relate to alcoholism, domestic violence, and family
problems. If you confront an employee about his or her frequent absenteeism,
and they inform you it is due to personal problems, consider referring the
employee to an Employee Assistance Program (EAP).

If the employee's absenteeism relates to a medical problem or a family member

with a medical problem, you may have to consider allowing the employee to use
the benefits allowed to them under the American's with Disability Act (ADA) or
the Family and Medical Leave Act (FMLA). Early identification of these
employees will get them back to work as fast as possible. Lastly, make sure that
you have an attorney review your attendance policy to make sure it does not
violate any State or Federal labor laws. By incorporating the above four
strategies into your company you will not only reduce absenteeism you will
reduce employee burnout, turnover, poor morale, and workplace negativism.

by

Gary Vikesland, MA LP CEAP

For Employees Who Are Frequently Absent

One of the most important steps you can take if you are frequently absent, is to
keep your employer informed. Employees who are frequently absent without
good cause are generally absent due to numerous frivolous reasons. Employees
who are absent for good cause have legitimate reasons, e.g. sickness or family
member illness, and the employee needs time off to resolve their personal
problems. Most employers generally understand the need to be gone from work
due to a legitimate reason; therefore, it is important to communicate clearly and
accurately so your employer does not assume you are out for frivolous reasons.

As an employee you are allowed to take up to 12 weeks of unpaid leave under

the federal Family and Medical Leave Act (FMLA). The 12 weeks of leave may
be taken continuous or intermittently, thereby allowing the employee to work on a
less than full-time schedule.

FMLA can be used for the care of a child after birth, adoption, or foster care
placement.

FMLA is available to care for an immediate family member (spouse, child,parent)

who has a serious health condition.

FMLA can be used for your own serious health concerns. It does not cover for
the common cold, flu, ear aches, upset stomach, common headache, or routine
dental care.

In order to be covered by FMLA you must be considered an "eligible" employee.

An eligible employee must have 12 months (1,250 hours) of employment, and
your employer must employ 50 or more employees within 75 miles of the
worksite. Employees must provide 30 days of advance notice for foreseeable
events. There are different exemptions present for both school teachers and
state/local government employees.

If you are an eligible employee, your employer must maintain your benefits, allow
you to return to the same or equivalent position, and not decrease your pay or
benefits at the conclusion of 12 weeks. If you believe you are eligible for FMLA,
inform your supervisor or HR department that you are requesting FMLA
coverage. Your employer is required to provide you with written notice, within two
business days, informing you if you are eligible or not.

Reducing Employee Turnover

With today's baby boomer generation beginning to retire from the labor market, many
companies are finding it increasingly difficult to retain employees. Turnover is becoming
a serious problem in today's corporate environment. The employment culture is changing
as well. It is now relatively common to change jobs every few years, rather than grow
with one company throughout the employment life as was once commonplace. In
addition, employees are increasingly demanding a balance between work and family life.

Turnover costs for many organizations are very high and can significantly affect the
financial performance of an organization. Direct costs include recruitment, selection, and
training of new people. Much time and expense go into this process. Indirect costs
include such things as increased workloads and overtime expenses for coworkers, as well
as reduced productivity associated with low employee morale. Estimated costs vary from
organization to organization, some as low as a few hundred dollars to as high as four
times the annual salary of the employee.

It has been estimated that, on average, it costs a company one-third of a new hire's annual
salary to replace an employee .Therefore, at minimum wage, the cost to replace an
employee is estimated at $3,700.

There are many potential causes for turnover. Area economic conditions and labor market
conditions affect general turnover rates and can be very difficult to manage. However,
certain causes associated with turnover in any specific job or organization can be
managed. These include such things as non-competitive compensation, high stress,
working conditions, monotony, poor supervision, poor fit between the employee and the
job, inadequate training, poor communications, and organization practices.

For a company to develop a retention strategy, several steps must be taken. First, they
must assess the current situation and measure the turnover rate in their company.
Turnover is calculated simply by dividing the number of annual terminations by the
average number of employees in the work force. The average employee turnover rate is
14.4 percent annually, according to the Bureau of National Affairs. How does your
company compare?

A company must also measure the cost of turnover, develop retention strategies, and plan
for some expected turnover and a changing workforce culture. Employers must recognize
that quality of work life is becoming more and more important to employees.

What initial steps can be taken to reduce turnover? First, hire the right people and
continue to develop their careers. Does your company have an ongoing career
development program, tuition reimbursement, or skills training program? An investment
in upgrading the workforce is one of the best investments a company can make when
looking at long-term growth. Hiring the people that are a good "fit" with the culture of
the organization—meaning that their values, principles, and goals clearly match those of
the company—and then training as necessary will go a long way toward ensuring
employee loyalty and retention.

Second, most companies with low turnover rates are very employee oriented. They
solicit input and involvement from all employees and maintain a true "open-door" policy
that avoids closed-door meetings. Employees are given an opportunity for advancement
and are not micro-managed. Intrinsic rewards are critical. Employees must believe they
have a voice and are recognized for their contribution. Remember that "trust" and
"loyalty" are a two-way street. Does your company's culture encourage open
communication and employee input?
Third, develop an overall strategic compensation package that includes not only base
and variable pay scales, but long-term incentive compensation, bonus and gain-sharing
plans, benefit plans to address the health and welfare issues of the employees, and non-
cash rewards and perks as well. To be competitive in today's labor market, most
companies find it necessary to offer a standard benefit package, including health, dental,
and life insurance, vacation and leave policies, and investment and retirement plans. But
what more could be done that would be cost effective toward creating an employee-
oriented work environment?

Creativity in compensation and benefits can make quite a difference to the welfare of the
employee. A company should assess overall employee needs when addressing retention
issues.

If employee welfare is a genuine concern, what about child care? How much employee
absenteeism is attributable to not having a dependable babysitter? Although the costs and
liabilities involved in providing onsite day care can be prohibitive, perhaps a company
could subsidize childcare in some manner. Sometimes, just negotiating rates for your
employees with area childcare providers could be very helpful. Maybe some kind of a
company match would be possible. Household chore assistance is another possibility that
is being used by some companies.

Consider other options—such as alternative work schedules or flextime, or perhaps

preventative health care and wellness programs such as fitness center memberships—as
possible cost-effective benefits. Don't forget that perks or non-cash rewards to recognize
exceptional performance can be critical. Service recognition, event tickets, trips, and
public recognition can send strong messages to the public regarding company culture and
values. Simply examine the issues and needs of your employees and try to develop
creative programs to address these needs.

Although many costs associated with these suggestions may seem prohibitive, as well
they may be, the company must evaluate the costs of current turnover, analyze the
reasons for the individual organization, and develop strategies that in the long term are
less costly than continued turnover. Some of these suggestions may not be so costly in
comparison.

Just a word of caution: Be fair and consistent in establishing compensation. Promote from
within if possible. Attempt to avoid bringing new people on board at a higher rate than
current employees. Policies to prevent discussion of wages simply do not work.
Furthermore, such policies are in complete opposition of "open-door" communications.

Although many companies use contract employees to address fluctuations in business,

working side by side with someone who is making twice the rate of pay without any
commitment or loyalty to the company can be a real morale killer. Avoid this if at all
possible!
If your company follows these steps and shows a genuine concern for the well being of
your employees, you may not have to pay the highest wages in town to have the lowest
employee turnover rate.

Literature review and hypotheses

Turnover, defined as the voluntary separation of an individual from an organization, has

particular importance in nursing because of the high turnover rate of hospital nurses
(Price and Mueller, 1986). This high turnover of hospital nurses is significant because it
results in high costs to the hospital administration and added stress on the nursing staff,
and ultimately, it may negatively affect the quality of care that the patient receives by
hindering the nurses' ability to meet workload demands and provide consistent patient
care (Parker and Kulik, 1995; Price and Mueller, 1981a). In this paper, turnover
intentions, not actual turnover, will be the dependent variables. Krausz et al. (1995)
asserted that studies among nurses have shown that intentions to leave are a better
predictor of actual turnover than are attitudinal measures. They argued that studies using
intentions as the criterion have distinct advantages over those using behavior as the
dependent variable. First, behaviors are often influenced by a host of other variables (e.g.,
company policies, economic conditions) that cannot be controlled by the investigator but
influence the findings. Second, turnover research has shown that a person's self-expressed
intentions are the best predictor of turnover (Steel and Ovalle, 1984). Therefore, turnover
intentions can be used as the dependent variable and an assumption can be made that
some action on the part of the employee is likely to follow. Moreover, Price and Mueller
(1981a) argued that expressed intentions of leaving a job are an expression of an
emotional response toward work or the profession. Parasuraman (1989), in a study of
turnover among staff nurses, asserted that intentions play a key mediating role between
attitudes and turnover and are the immediate determinant of actual turnover.

Actual absenteeism will be the second outcome examined here. Conceptually,

absenteeism and turnover are behaviors that have attracted a great deal of attention from
scholars (Harrison and Martocchio, 1998). Yet, there is a limited number of nursing
studies dealing with absenteeism, and those that do generally assign greater importance to
turnover than absence (Borda and Norman, 1997). Both turnover and absence may be
termed withdrawal behaviors, as they involve withdrawal from work (Borda and Norman,
1997). The causes for these two behaviors are also interrelated. They both stem from the
same underlying motivation to escape a dissatisfying job (Mitra et al., 1992). Many
theories hypothesize that people who dislike their jobs will avoid them, either
permanently by quitting or temporarily by being absent or coming in late. These
withdrawal behaviors have received a good deal of attention in the literature, but further
examination of them is needed in general and in nursing organizations in particular.

The independent variables examined in this study represent three conceptualizations of

the causes of withdrawal. Demographic models were commonly examined as reasons for
withdrawal, in many cases because of the need to control for important demographic
differences among the research participants. Work attitudes were included in previous
models as the main determinants of withdrawal (Harrison and Martocchio, 1998; Sagie,
1998). The emphasis on commitment forms and the addition of perceptions of health, all
in the same model, are an important contribution of this study. The inclusion of prior
absenteeism as a predictor of withdrawal, in addition to the other determinants examined
here, strengthens the contribution of this study. What follows is a more thorough
description of the research model, along with the specific hypotheses for the expected
relationships between the variables examined and the two outcomes.