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Research methods for business

Research topic: Causes and Costs of Absenteeism

Presented by: Mariham Helal

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Table of content:

Abstract

Introduction Purpose of the research

Broad problem Area

Problem Statement

Expected scholarly contribution

Theoretical framework of the study and Hypothesis Literature review

Hypothesis

Research Method Research design

Sample Characteristics

Questionnaire

Data Analysis

Findings

Conclusion and Recommendations

Limitations and Future research recommendations

References

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Abstract

This research on Employee Absenteeism reveals that one of the major problems is absenteeism in our industry. Absenteeism is the practice or habit of being an absentee and an absentee is one who habitually stays away from work. Employees Absenteeism is a serious problem for management because it involves heavy additional expenses. Absenteeism hinders planning, production, efficiency and functioning of the organization. In fact high rates of absenteeism affect an organization state of health and also supervisory and managerial effectiveness.

-Introduction

Purpose of the research

• Assessing causes of Absenteeism & suggest remedies to overcome it

• Finding out the costs of absenteeism and how to reduce it.• Figuring out the solutions for this problem

Broad problem area

Low productivity due to high rate of absenteeism.

Problem statement

What are main causes of employee absenteeism?

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Expected scholarly outcomes

Increasing production Improve interpersonal relationships Increase in efficiency of operation by trainees Decrease in labor cost Improve the discipline of the company Boost employee motivation Reduce expenses of recruitment and training of new comers

-Theory and Hypothesis

Literature Review

1. Ernest B. Akyeampong has written a research paper Trends and seasonality in Absenteeism. In this paper the author focus on that at which time period the employees are more absent. In this paper he said that illness-related absences are highly seasonal, reaching a peak during the winter months (December to February) and a trough during the summer (June to August). The high incidence in winter is likely related to the prevalence of communicable diseases at that time, especially colds and influenza. The low incidence during the summer may be partly because many employees take their vacation duringthese months. Because of survey design, those who fall ill during vacation will likely report „vacation‟ rather than „sickness or disability‟ as the main reason for being away from work. Compared with the annual average, part-week absences are roughly 30% more prevalent in the winter months and almost 20% less so during the summer months. Seasonality is much less evident in full-week absences.

2. Mariajosé Romero and Young-Sun Lee has written a research paper A National Portrait of Chronic Absenteeism in the Early Grades. In this paper he focused on the following points:

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(i) How widespread is the Problem of Early Absenteeism? (ii) Does Family Incomes Impact Early Absenteeism? (iii) What is the Impact of Early Absenteeism on Academic Achievement?

3. Morten Nordberg and Knut Røed has written a research paper Absenteeism, Health Insurance, and Business Cycles. In this he wants to evaluate how the economic environment affects worker absenteeism and he also isolate the causal effects of business cycle developments on work-resumption prospects for ongoing absence spells, by conditioning on the state of the business cycle at the moment of entry into sickness absence.

The author finds that

(i) That business cycle improvements yield lower work-resumption rates for persons who are absent, and higher relapse rates for persons who have already resumed work.

(ii) That absence sometimes represents a health investment, in the sense that longer absence „now‟ reduces the subsequent relapse propensity.

(iii) That the work-resumption rate increases when sickness benefits are exhausted, but that work-resumptions at this point tend to be short-lived.

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Concept of Absenteeism

It refers to workers absence from their regular task when he is normally schedule to work. The according to Webster‟s dictionary “Absenteeism is the practice or habit of being an absentee and an absentee is one who habitually stays away from work.” According to Labour Bureau of Shimla: Absenteeism is defined as the total man shifts lost because of absence as percentage of total number of man shifts scheduled to work In other words, it signifies the absence of an employee from work when he is scheduled to be at work. Any employee may stay away from work if he has taken leave to which he is entitled or on ground of sickness or some accident or without any previous sanction of leave. Thus absence may be authorized or unauthorized, willful or caused by circumstances beyond one‟s control.

Types of Absenteeism:

Authorized Absenteeism

Unauthorized Absenteeism

Willful Absenteeism

Absenteeism caused by circumstances beyond ones control

Features of Absenteeism

The rate of absenteeism is the lowest on pay day and increases considerably on the days following payment of wages and bonuses.

Absenteeism is generally high among the workers below 25 years of age and those above 40 years of age.

The rate of Absenteeism varies from department to another within an organization. Generally it is high in the production departments.

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Absenteeism in traditional industries is seasonal in character

Maybe even worse than absenteeism, it is obvious that people such as malingerers and those unwilling to play their part in the workplace can also have a decidedly negative impact.Such team members need individual attention from frontline supervisors and management.

Indeed, as prevention is better than cure, where such a problem occurs, it is always important to review recruitment procedures to identify how such individuals came to be employed in the first place. For any business owner or manager, to cure excessive absenteeism, it is essential to find and then eliminate the causes of discontent among team members.If they find their supervisor or job unpleasant - really unpleasant - they look for legitimate excuses to stay home and find them with things such as upset stomachs or splitting headaches. Any effective absentee control program has to locate the causes of discontent and modify those causes or eliminate them entirely. In other words, if we deal with the real reasons team members stay home it can become unnecessary for t hem to stay away.

Any investigation into absenteeism needs to look at the real reasons for it. Sometimes team members call in sick when they really do not want to go to work. They would not call you up and say, “I‟m not coming in today because my superviser abuses me.” Or, “I‟m not coming in today because my chair is uncomfortable.” Or, “I‟m not coming in today because the bathrooms are so filthy; it makes me sick to walk into them.”

There are a few essential questions to consider at the outset if you want to make a measurable improvement to your absenteeism figures. Why is your present absenteeism policy ineffective?

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Where and when is excessive absenteeism occurring? In many cases, under- trained supervisors could be a contributing factor.What are the real causes for absences? It is commonly expected that low pay, poor benefits and high workloads will be the major causes.

However, in numerous employee surveys absenteeism generally has been identified as a symptom of low job satisfaction, sub-standard working conditions and consistent negative and unfair treatment received by first-line supervisors.

How much formal training have your supervisors received on absenteeism containment and reduction? If your answer is none or very little, may be you have found the solution.

As with every other element within your organization, you cannot ask a person to do a job he or she has never been trained to do. Many human resources specialists have found that repetitive, boring jobs coupled with uncaring supervisors and/or physically unpleasant workplaces are likely to lead workers to make up excuses for not coming to work. If your team members perceive that your company is indifferent to their needs, they are less likely to be motivated, or even to clock on at all.

One way to determine the causes of absenteeism is to question your supervisors about excessive absenteeism, including what causes it and how to reduce it. Of course, if your supervisors have made no efforts to get to know the team members in their respective departments, they may not be able to provide reasons.

However, just the act of questioning may get the ball rolling and signal to your supervisors that their involvement is important.

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Once a manager finds the real reasons for absenteeism there is another important step. Through open communication, you need to change the team member’s way of reacting and responding to discontent.

Other problems will no doubt arise in the future. If the way of responding has not been reviewed, then the same cycle is likely to start all over again.

So, often absenteeism problems can be sheeted back to the supervisor level and to unsatisfactory working conditions. Without improvement in these areas, you can your high rate of absenteeism to continue.

Hypothesis

Main reasons for employees’ absenteeism:-

1- High rates of absenteeism is due to health problems 2- Lack of fringe benefits within highly competitive markets 3- Autocratic management systems which causes stressful working environment

Research Method

Research Design

An employee opinion survey will be administered to identify employee’s perceptions of the key issues, which may be attributing to high absenteeism

Purpose of the study: Hypotheses-TestingType of the study: Casual

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Study setting: Non-Contrived, Field Study Time Horizon: Longitudinal Unit of Analysis: Employees among different corporatesSources of Data: Primary

Sample size: 10 employees from 10 different corporatesData Collection Method: Questionnaires

The survey will be administrated to all contributing organizations. The survey is a self-administered survey and requires about 15 minutes to complete. The survey will be conducted in the Customer Relations conference room, at various times accommodate those employees working 2 and 3 shifts. This method of collection was used in an effort to get a 100 percent response rate.

It will be given to HR department of each participating company in the survey.They will be responsible of choosing 10 employees randomly to answer the questionnaire in cooperation with personnel department.

Variables

Dependent Variables: Absenteeism, Turnover rate & Productivity Independent Variable: Working conditions Mediating Variable: Job satisfaction

Questionnaire

Written to HR Managers to be spread to their employees, one or two persons per department.

Dear Sir/Madam:

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Thanks for agreeing to participate in our research. You will help us to understand how to improve your working environment in order to reduce rate of absenteeism. The questionnaire would take about 15 minutes.

Questionnaire for employee absenteeism

1-Age

Below 2525-35Above 35

2-Gender

MaleFemale

3-Years of experience

Less than 1 year1-3 yearsAbove 3 years

4-Your opinion about the job

Heavy work load Poor working environment Long working hours

5-Duration of leave taken by an employee in a month

1 day1 -3 days More than 3 days

6-Do you attend the daily duty on time ?

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YesNo

7- How many shifts do you attend?

1shift2 shifts 3 shifts

8- Rate your awareness of the job responsibilities

Very clearClearFairy clearNot clear

9-Your view regarding working environment

ExcellentGoodFairPoor

10-Boredom with assigning dutyOftenSometimesRareNever

11-Occurrence of strict actions against absenteeism

OftenSometimesRareNever

12-Do you achieve a work-life balance?

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YesNo

13-Your opinion about the effect of absenteeism

Causes work stressCauses delayed performanceLeads to overtime work More turnovers All of the above

14-Rate your satisfaction level with the relationship with your superior

Highly satisfied SatisfiedNeutralDis-satisfiedHighly dis-satisfied

15-Your opinion about the main reason for long absence

Family problem Health problemWork dissatisfaction Working environment

16-Does your co-workers help you with work load ?YesNo

17-Your reason for taking a leave

SicknessLack of interest in the jobPoor working conditions Long working hours

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18-Your opinion regarding working environment

ExcellentGoodFairPoor

18-Your opinion regarding work pressureYes, a lotModerateNo

19-Your suggestions about how to reduce absenteeism

Increase number of holidays Improve working conditions Better performance appraisals Adapting job rotations

20-Your level of awareness regarding your absence from work

HighModerateLow

21-Your opinion about the motivational factors avoiding taking leaves

Good employee relationsBetter working environment Incentives and bonuses based on performance Recognition at work

Please add any further suggestions that you have for the management to reduce level of absenteeism in your company

........................................................................................................

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Data Analysis

-Coding responses-Data entry-Creating data file -Data will be analyzed in an effort to fully understand what is causing the disciplinary actions using SPSS. Mean scores and standard deviations will be calculated for each item on the survey.

Conclusion

Impact

A high degree of absenteeism and turnover can cause serious problems for businesses. Absenteeism hurts productivity and costs. Most of the companies are currently suffering a high degree of absenteeism in its production department. Employees on the assembly line are often absent. The production employees must operate complex machinery that requires training, so temp employees don't have the requisite skills to pick up the slack for absent operators. Thus, production decreases with each absent employee. This costs the company money.

Moreover, most of the absences are paid leave, which means even though production is down, labor costs remain the same.

Turnover is even a more serious problem for all companies nowadays. Not only can turnover cause productivity problems, but it results in the loss of human resources that may not be easily replaced.

For example, some of the company's best and most innovative engineers and researchers have voluntarily separated from service to pursue other opportunities. Loss of these employees not only hurts productivity but weakens the company strategically because of the specialized skills and creativity that the employees brought with them. Even if the company can find the same quality of workers, the search, training and time involved costs serious cash.

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ANALYSIS OF CAUSES

1) FAMILY ORIENTED & RESPONSIBILITIES

It was observed that about 40% case absenteeism is family oriented and more responsibilities of workers. It increases in harvesting season.

2) SOCIAL CEREMONIES

In 20 % cases it was found that social and religious functions divert worker from work.

3) HOUSING FACILITY

In about 30% cases, the workers remain absent because there is no housing facilities and the workers stay alone and great distance from factory.

4) SICKNESS AND ACCIDENT

In 20% case the workers remain absent due to ill health and disease and in 15% cases workers remain absent due to accident.

5) TRANSPORTATION

Most of the workers have to travel long distance to reach the work place. Most of the workers are not satisfied with transport facilities.

6) WELFARE FACILITIES

In 13% cases, the workers are not satisfied with welfare facilities.

7) WORKING CONDITIONS

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In 21% cases, the workers feel that there is not good working condition, because they work in standing position which causes to remain absence for relaxation.

8) MANAGEMENT SYSTEM

Near about 34% people are dissatisfied with management system because they feel that their work is not being recognized and promotions are biased.

Costs of Absenteeism

Wages paid to absent employeesHigh-cost replacement workers (overtime pay for other employees and/or temporary workers Administrative cost of managing absenteeism

Indirect costs and effects of absenteeism

-Poor quality of goods/services resulting from overtime fatigue or understaffing -Reduced productivity -Excess manager time while dealing with discipline and finding suitable employee replacement Poor morale among employees who have to do extra work to cover absent co-workers

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Findings:-

Age of respondents

Inference:

The above table explains that from the total respondents 30% of

respondents are below age groups of 25 years. 35% of respondents are of groups of 25- 35 years and above 35 years are 35% of respondents. None of the respondents are below further it clears that majority of total respondents are from all age of groups.

Below 2530%

25-3535%

Above 3535%

NO OF PERSONS

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Feeling boredom with assigning duty

Inference:

The table shows that 10% of the respondents felt boredom at work rarely, 40% felt sometimes, 35% felt always and 15% felt never, it

seems that the majority employees are not interested in the work.

Sometimes40%

Rarely10%

Never15%

Often35%

Boredom in routine work

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Strict actions against absenteeismInference:

From above table it seems that 22%worker says that there is always strict against absenteeism.15%says sometime, 20%says rarely and remain43%no action against absenteeism

Often

Sometimes

Rarely

Never

0 12.5 25 37.5 50

Strict action

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Main reason for employee absenteeism

Inference:

Out of total 100 respondents, 55% of respondents are absent because

of health problem, and 30% of respondents absents because of stress,10% of respondents will absent because of work dissatisfaction ,and remain 5% because of work environment. From the above chart it is clearly observed that the workers will absent to duty i.e. 55% are absent for health reason only.

•Majority of the employees are absenting due to ailment and health problems.

Health ProblemStressWork Dissatisfaction

Work Enviroment0 25 50 75 100

Main Reason of Employee Absenteeism

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•Majority of the employees has said they are paid worth of their work.•Majority of the employees has said that there is no strict action against absenteeism.

•Most of the workers do not intimate their senior regarding their leaves.

•Though there are limitations the personal department is taking special care to frame certain policies and procedures that would reduce absenteeism and increase the labor turn over.

•Majority of workers who has attend more at one shift per day face absenteeism problems

•Majority of workers never got appreciation for their punctuality in most of the organizations.

Suggestions and recommendations

Companies need to find a solution to its rampant absenteeism and turnover. Extrinsic motivational techniques can be used to help reduce turnover. Extrinsic rewards are a means by which an organization can motivate employees to stay with the company by providing external rewards. Some common extrinsic inducements that can be used to encourage employee retention include:

• Providing high wages and allowance based on organizational financial positions.

• Selecting the workers by testing them thoroughly regarding their aspirations, value system, and sense of responsibility.

• The management should conduct regular seminars, group’s discussions, social gathering orientations programmers’ on the problems of absenteeism.

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• The personnel department (HRD) of the factory must conduct the interviews of the absenteeism cases and give proper counseling to the workers.

• The employees who are attending to several shifts have to be provided more benefits than the workers. In order to make them enthusiastic to attend the workers.

Limitations and Future Research Recommendations

This research was limited in that it did not survey management. Had the supervisors and shift supervisors been surveyed other conclusions may have been reached. Maybe management does not receive all of the information they need when they are making decisions.

A future recommendation would be to form focus groups, making sure all shifts are represented, and look at the causes of some of these problems. Some times symptoms are thought to be the cause of a problem.

References:

-Uma Sekaran and Roger Bougie(2013). Research Methods for Business, 6th ed., John Wiley & Sons-Anonymous (1995). Curbing absenteeism. HR Focus, 72(12), 9.-http://geog.uoregon.edu/amarcus/geog620/Readings/handout-researech.pdf- http://surveyanalysis.org/wiki/Formal_Hypothesis_Testing -Fowler, A. (1998). How to cut absenteeism. People Management, 4(1), 44-45.-Kelly, L. (1992). Attendance management: An issue of the ‘90s. Worklife Report, 8(5), 12-14.