absemteesam & turnover (1)

8/7/2019 Absemteesam & turnover (1)

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Introduction of Absenteeismy Absenteeism is a habitual pattern of absence from a duty or

obligation.

y Absenteeism occurs when an employee of a company does not

come to work due to scheduled time off, illness, injury, or anyother reason. The cost of absenteeism to business, usually

expressed in terms of lost productivity, is difficult to determine.

y Traditionally, absenteeism has been viewed as an indicator of rich

individual performance, as well as a breach of an implicit contract

between employee and employer; it was seen as a management

problem, and framed in economic terms.


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y Absenteeism is the term generally used to refer to

unscheduled employee absences from the workplace.

y Manycauses ofabsenteeism are legitimatepersonal

illness or family issues, for examplebut absenteeism

also can often be traced to other factors such as a poor

work environment or workers who are not committed to

their jobs.

y If such absences become excessive, they can have a

seriously adverse impact on a business's operations and,

ultimately, its profitability.


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The Causes of Absenteeism

y Serious accidents and illness

y low morale

ypoor working conditions

y boredom on the job

y lack of job satisfaction

y inadequate leadership and poor supervision


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y personal problems (financial, marital, substanceabuse, child care etc.)

y poor physical fitness

y transportation problems

y

the existence of income protection plans (collectiveagreement )

y benefits which continue income during periods ofillness or accident.)

y stressyworkload

y employee discontent with the work environment


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Costs of Absenteeism

y Lost productivity of the absent employee

y

Overtime for other employees to fill iny Decreased overall productivity of those employees

y Any temporary help costs incurred

y Possible loss of business or dissatisfied customers

y Problems with employee morale


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Establishing a System for Tracking Absences

y Absenteeism policies are useless if the business doesnot also implement and maintain an effective system

for tracking employee attendance.Some companiesare able to track absenteeism through existing payroll

systems (Clock In or out), but for those who do nothave this option, they need to make certain that theyput together a system that can:

1) keep an accurate count of individual employeeabsences;


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2) tabulate company wide absenteeism totals;

3) calculate the financial impact that these absenceshave on the business;

4) detect periods when absences are particularly high;

and

5) differentiate between various types of absences.


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Types of absenteeismy There are two types of absenteeism, each of which requires a

different type of approach.

1.Innocent Absenteeism

y Innocent absenteeism refers to employees who are absent forreasons beyond their control; like sickness and injury. Innocentabsenteeism is not culpable which means that it is blameless.

2.Culpable Absenteeism

y Culpable absenteeism refers to employees who are absent

without authorization for reasons which are within their control.For instance, an employee who is on sick leave even thoughhe/she is not sick, and it can be proven that the employee wasnot sick, is guilty of culpable absenteeism.


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Steps to deal with Absenteeismy Individual Communication :

y After all available information has been gathered, theadministrator or supervisor should individually meet with

each employee whom has been identified as having higherthan average or questionable (or pattern) absences.

y This first meeting should be used to bring concerns regardingattendance to the employee's attention.

y It is also an opportunity to discuss with the employee, in some

depth, the causes of his or her attendance problem andpossible steps he or she can take to remedy or control theabsences.

y Listen carefully to the employee's responses.


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y Proof of Illness

y Sometimes it is helpful in counseling employees with

excessive innocent or culpable absenteeism to inquire or

verify the nature and reasons of their absence.

y After the Initial Interview

y If after the initial interview, enough time and counselling

efforts, as appropriate, have passed and the employee's

absenteeism has not improved, it may be necessary to take

further action. Further action must be handled with

extreme caution - a mistake in approach, timing


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Counseling Innocent Absenteeism:

y Innocent absenteeism is not blameworthy andtherefore disciplinary action is not justified. It isobviously unfair to punish someone for conduct

which is beyond his/her control.

y The procedure an employer may take for innocentabsenteeism is as follows:

y Initial counselling(s)

y Written counselling(s)

y Reduction(s) of hours and/or job reclassification

y Discharge


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y

Initial CounselingPresuming you have communicated attendanceexpectations generally and have already identified anemployee as a problem, you will have met with him or her aspart of your attendance program and you should now

continue to monitor the effect of these efforts on his or herattendance.

y Written CounselingIf the absences persist, you should meet with the employeeformally and provide him/her with a letter of concern. If the

absenteeism still continues to persist then the employeeshould be given a second letter of concern during anotherformal meeting. This letter would be stronger worded inthat it would warn the employee that unless attendanceimproves, termination may be necessary.


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y Reduction(s) of hours and or job reclassification

In between the first and second letters the employee may

be given the option to reduce his/her hours to better fit

his/her personal circumstances. This option must be

voluntarily accepted by the employee and cannot be

offered as an ultimatum, as a reduction in hours is a

reduction in pay and therefore can be looked upon as

discipline.


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Discharge: it is the last level ofpunishment

y innocent absenteeism dismissal case.y Has the employee done everything possible to regain their

health and return to work?

y Has the employer provided every assistance possible? (i.e.counseling, support, time off.)

y Has the employer informed the employee of theunworkable situation resulting from their sickness?

y Has the employer attempted to accommodate theemployee by offering a more suitable position (if available)or a reduction of hours?

y Has enough time elapsed to allow for every possiblechance of recovery?

y Has the employer treated the employee prejudicially in anyway?


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y Corrective Action for Culpable Absenteeism

y culpable absenteeism consists of absences where it can

be demonstrated that the employee is not actually illand is able to improve his/her attendance.

y The general procedure is as follows:

y Initial Warning(s)

yWritten Warning(s)y Suspension(s)

y Discharge


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y Verbal Warning

Formally meet with the employee and explain thatincome protection is to be used only when an employeeis legitimately ill. Advise the employee that his/herattendance record must improve and be maintained atan improved level or further disciplinary action will

result.y Written WarningInterview the employee again. Show him/her thestatistics and point out that there has been nonoticeable (or sufficient) improvement. Listen to the

employee to see if there is a valid reason and offer anyassistance you can. If no satisfactory explanation isgiven, advise the employee that he/she will be given awritten warning.


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y Suspension (only after consultation with the

appropriate superiors)

If the problem of culpable absenteeism persists,

following the next interview period and immediately

following an absence, the employee should be

interviewed and advised that he/she is to be suspended.

The length of the suspension will depend again on the

severity of the problem, the credibility of theemployee's explanation, the employee's general work

performance and length of service.


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y Dismissal (only after consultation with the

appropriate superiors)

Dismissals should only be considered when all of the

above conditions and procedures have been met. Theemployee, upon displaying no satisfactory

improvement, would be dismissed on the grounds of

his/her unwillingness to correct his/her absence

record.


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How to Deal with Employee Absenteeism

y Positive discipline

y Punitive discipline.

y Change Management Style

y Change Working Conditions

y Provide Incentivesy PAID TIME OFF SYSTEM :Some companies have

approached similar problems by eliminating sick leavealtogether. Instead of vacation time and sick leave, the

companies have developed "paid-leave banksy Developan Attendance Policy

y EmployeeAssistance Program (EAP).

y American's with DisabilityAct (ADA)

y or the Family and Medical Leave Act (FMLA


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Absentee Management Metrics

y Many approaches exist to measuring and gathering statisticsrelated to absentee management & employee attendancetracking. Aquick online search will reveal a multitude ofAbsentee Management System(AMS) software: such as

employee attendance tracking software, timekeepingsoftware, employee time clock software, and employeetime and attendance software. All these attendancetracking software will help to automate most employeeattendance metrics & chart the absenteeism progression

accordingly. However, regardless of what trackingsoftware is selected or even what employee attendancemetrics are ultimately chosen, vital to all absenteemanagement programs are that those metrics be:


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y properly communicated;

y systematically reviewed with all employees; and,y applied consistently across the employee base.

y To give you sense of the types ofemployee attendancepolicymeasures utilized in the field of absenteeismmanagement, below are a few example employee

attendance metrics a typical company might employ.Employee Attendance Record

y There are three important statistics relative to anyemployee absenteeism calendar or employeeattendance record system:y Number of days absent

y Number of incidents

y Pattern of absences


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y few steps of keeping absenteeism to a minimum.

y Communicate your attendance policy across alllevels in the organization clearly

y Measure and thereby monitor the rate of absenteeism inyour companyon a regular basis

y Initiate periodic health checkups to avoidabsences resulting out of illness

y Implement reward schemes for those employeeswho are regular

y

Create a favorable and peaceful workenvironment where relationship between workersand supervisors are professional and devoid of conflict.


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y Provide adequate training to managers particularly

authoritative ones to curb absenteeism

y Engage supervisors to speak to employeeswho were

absent and have returned to work

y Educate and engageyour employees activelyin theorganization. Disciplinary action to correct absentees

should mostly be avoided. However counseling sessions

can prove useful.

y Keepyour employees motivated and try making the

organization a fun place to work


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Turnovery In a human resources context, turnover or laborturnover is the rate at which an employer gains and losesemployees.

y Simple ways to describe it are "how long employees tend

to stayy Turnover is measured for individual companies and for

their industry as a whole. If an employer is said to have ahigh turnover relative to its competitors, it means thatemployees of that company have a shorter average tenure

than those of other companies in the same industry.y High turnover can be harmful to a company's productivity

if skilled workers are often leaving and the workerpopulation contains a high percentage of novice workers


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Definition:y According to Pigors and Myers labour turnover

costs not only human values but also in money. It

includes,y Costs incurred in hiring and training each new

employees.

y Cost of overtime, work required from regular

workers in order to maintain the requited levelof production until the new employee can do hisshare.


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y Loss of production in the interval between separation of

the former employee and time when his replacement is

fully broken.

y Expense in equipment or facilitates not being fully

utilized during the training period


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Costs

y There are two types of cost:

y Direct costs relate to the leaving costs, replacement costs

and transitions costs.

yIndirect costs relate to the loss of production, reduced

performance levels, unnecessary overtime and low morale


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HR Supply ForecastIt is process of estimating future quantity and quality of

manpower available internally & externally to an

organization.

y SupplyAnalysis

y Existing HumanResources

y Internal Sources ofSupply

y External Sources ofSupply


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y Existing Human Resourcesy Capability / Skills Inventory using HRInformation System

y Internal Supplyy Inflows & Outflows - The number of losses & gains of staff is

estimated.

y TurnoverRate - refers to rate of employees leaving.= ( No. of separations in a year / Avg no. of employees during the year

) x 100

y Absenteeism - unauthorized absence from work.= ( total absentees in a year / Avg no. of employees x No. of working

days) x 100y ProductivityLevel - = Output / Input. Change inproductivity affects no. of persons per unit of output.

y External Supply

y External recruitment, selection & placement - Advertisements,Manpower Consultants, Campus Recruitment, UnsolicitedApplications, Employee Referrals


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Measurement of labour turnovery Turnover can be computed for each type of movement in

and out of the company.

y Following formulas are generally used to measure the

extent of labour turnover:

1. Accession Formula

2. Separation Formula

3. Replacement formula

4. Comprise formula


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Accession Formula

y Labour turnover ratio according to this formula isarrived at bydividing the total accessories unitduring a specified period bythe average labour

force that until during the same period.y Total accessories are all permanent and temporary

additions to the employment rollwhether new orretired employee.

yTransfer from other establishment of the companyare also counted


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y The average labour force of a specified periodmay be calculating by dividing the total no. ofemployees on the payroll at the beginning & atthe period underconsideration by2.

y Another measure which is occasionally used tocalculate this average is the no. of employees on thepayroll on the middle dayof the specified periodgiven month is 600 (585 at the beginning + 615 atthe end/2) and if during the same period it has

taken on 50 employees then,585+615/2=600

Turnover arte = 50/600*100 = 8.33 %


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Separation Formula

y In this formula total separation during a specified

period are taken in to account.

y Total separation means all the terminations of the

employment of the persons who have quit or have

been taken off the rolls for reasons such as layoff,discharge,retirement,death,physical disabilities

etc..


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y

Transfer of employee to the other establishment ofthe same company are also included.

y If20 employee were separated from the payroll

during the same period in the above example, then

the turnover ration rate according to this formula

will be, See as follow

585+615/2=600

Turnover arte =20/600*100 = 3.33 %


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Replacement formula & Comprise formula

y Replacement formula: It also known as the net turnoverrate or wastage rat e.

y This formula uses for the total separation which ever islower.

y (No. of employees joined/ Number of employees).100

y Comprise Formula: To minimizing the cyclical effects

upon turnover calculations some companies average the

separation & succession figure and then divided by the

average working force based upon both separation andsuccession figure. See as follow

y ((50+20) /2/600*100 = 5.83%


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Practical questiony In 2010,The Mc-Grown company have 20 workers who

leave the company and 20 people are newly recruited.

The number of replacements are 10. The company

employees an average number of200 workers in the

year. Find the labour turnover ratio for the year2010?


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Solutiony No of separation + no of replacements + no of recruitments

X 100

Average no of workers

=20 + 10 + 20 x 100

200

=20%


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How to reduce Labour turnovery Payproblem:

1. Increasing pay levels to meet competition.

2. Improving pay structure to remove inequities.

3. Altering the pay system to reduce excessive

fluctuation.4. Introducing procedure for relating rewards more

performance


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y

Emp

loyees learning for further theircareery Providing better career opportunities and ensuring

that employees are aware of them.

yExtending the opportunities for training.

y Adopting and implementing promotion from within

policies and introducing more systematic and

equitable promotion procedure.

y Deliberately selecting employees who are not likely to

wait move much higher than their initial jobs.


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y Employees leave due to conflict:

y Introducing more effective procedures forconsultations, participation and handling thegrievance.

y Improving communication by such means as

briefing groups.y Using the conflict resolution and teambuilding

techniques of organization development.

y Reorganizing work and arrangement of offices or

workshops to increase group cohesivenessy Educating 7 training management in approaches to

improving their relationship with employees.


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y

The Induction crises:y Improving the recruitment and selection procedures

to ensure that job requirements are specified

accurately and that the people who are selected fitthe specification.

y Ensuring that candidates are given a realistic picture

of the job, pay and working conditions.

y Developing better induction & initial training

programmes


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y Shortage of labour:

y Improving recruitment, selection & training for the

people required

y Introducing better methods of planning and scheduling

work to smooth out peack loads.


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y

Changes in working requirements:y Ensuring the selection and promotion procedures match

the capacities of individuals to the demand of the work.

y

They have to do

y Provide adequate training & adjustments period when

working condition change.

y A

dopting payment by result systems to ensure thatunindividuals are not unduly penalized when they are

engaged in short runs

absemteesam & turnover (1)

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