Managing Personal and Human Resources - Case Study Example

Ways in Which Contemporary Organisations can Manage Employee Absence Name: University: Course Title: Instructor: Date: 1.0 Introduction According to Hayday (2008: 28), ‘until relatively recently, most organisations seem to have regarded the health of their employees as being something private to the individual’. Issue of employee absence has become a thorn in the flesh for most organisations (Bennett, 2002: 430). Issues of absence are a costly affair to the organisation and the economy as a whole. In addition, it causes disruption at workplace (McLean, 2007: 393). In the later context, various studies have tried to quantify the cost involved in employee absenteeism. For instance, Sage (2011: 2) estimates that cost of staff sickness to UK small businesses amounts to 3.4 billion pounds and a cumulative 63 million lost days with higher rates being during winter. In a nutshell, this is a critical concern and thus, absence management is integral to most UK organisations. The aim of this discourse is to assess the ways in which contemporary organisations can manage employee absence. In respect to the later, the paper is divided into three parts. The first section examines the cost of employee absence and why employees absent from work. The second section outlines the significance of managing absenteeism among employees. Moreover, in this section, interrogate costs associated with the same. Lastly, the paper explores contemporary practices of managing absence at work place. In this paper, most of the examples will be drawn from UK. Nevertheless, for comparative purpose, the paper will utilise global perspective by using other country’s case studies. 2.0 Concept of absenteeism and why employees absent Sum Total System (2011: 1) observes that whether unplanned or planned, at one time organisation has to experience employee absenteeism through illness, vacation, family care or study leave among others. The undeniable reality is that employees are one of the critical elements in the success of an organisation. The premise behind this is based on the fact that they are points of innovation, they are the actual implementers of organisations strategic goals, form contact point with customers and are critical in daily operations of the business. Hence, if an employee misses work for various reasons if not his/ her official leave days the organisation loses economically and in terms of disruption (Denning, 2000: 2). Income Data Service (2005 cited in McLean, 2007: 393) notes that high absence may indicate ‘low morale or wider organisational problem’. Howarth (2005: 3) and CIPD (2012) note that employee absence is associated with various medical reasons. In this context, employee’s misses works as result of medical conditions which require health solutions away from work. Second is stress related reasons. These are attached to medical and motivational issues. Third are motivational reasons as result of poor management. Fourth are domestic issues which require employee attention. Fifth are the unavoidable events associated with bad lucks and so on. The last is the planned and agreed absence. Most literatures identify sickness the highest contributor to employee absenteeism. Bolton & Hughes (2001: 21 cited in McLean, 2007: 396) ranks these as minor illness and serious among others (sees appendix 1). These sicknesses can be categorised as self certified, medically certified, industrial accident/ injury, short term absence and long term absence (p.395). CIPD (2009: 18) in their literature have ranks various causes of work absenteeism in UK. They categorise these causes in to short and long term and among manual & non-manual workers. According to them, the major causes of short term absence are minor illnesses such flu, stomach upsets and colds. Apart from these cross cutting conditions, for manual workers the next causative factor in relation to short term absence was musculoskeletal conditions like neck strains, repetitive strain injury and back pain & stress among others. The next cause is family responsibility & recurring medical conditions like asthma & angina. For non manual employees, the second after the initial cross cutting issues is stress. Next in the rank respectively for non casual labourers are musculoskeletal conditions, home & family responsibilities and back pain. Bennett (2002: 431) introduces a new twist to why employees absent from work. The paradigm of his work moves away from the traditional approach of sickness related issues to organisational procedures and processes. He notes that certain absenteeism is associated with how the organisation is managed. Such factors include the manner in which chores are organised, organisation structure, management hierarchy low level of employee responsibility job satisfaction, autonomy and organisational commitment. It is these factors that will act as impetus to absenteeism by inducing illness, injury and wanting levels of motivation. For instance, organisational culture and employee commitment will determine his or her level of absenteeism. If the employee is not high committed to the organisation, he or she is likely to be absent frequently as compared to others (p.432). In a nutshell, he sees absenteeism as a manifestation of weakness in organisational processes and procedures. In attempt of to measure absence and determine individual’s absence level, various formulas have been developed. The first is the Bradford system (S x S x D) where ‘S’ is the number of occasions of absence and ‘D’ is the number of days lost. In this approach, it observed that the cost and disruption of persistent short falls is higher than occasional longer spells of absence. One of the short coming associated with this approach is that it is unfair in terms ranking to those who suffer short spell ailments. The other formula was developed by ACAS (2006 & CIPD (2006). Their formula works individual level through multiplying ‘work days lost’ by 100 and then subdividing it with the ‘possible days worked’. In this context, work days lost per employee is arrived at through dividing ‘work day lost’ by ‘average number of employees’ (McLean, 2008: 398 & 399). 3.0 Significance of managing absence Absence management has to be a key concern for any organisation. However, it recorded that fewer than half of employers in UK monitor the cost of absence and for those who do it, there is a still long way to go (Sage, 2011: 2 citing CIPD Survey). The same observation is affirmed by Sum Total Systems (2011). While citing Gartner Research, they note that ‘less than half of organisations measure or manage employee absence effectively (p.1). On their part, CIPD (2009) indicates that 69% of UK organisations record annual employee absence rate. In their statistics, it is the public sector which is likely to record the absence rate (76%) while non profit organisations are the least at 67% (p.4). Such an observation is alarming since the level of absenteeism in UK is worrying. Moreover, the cost involved in the same for organisations and economy is worrying. Thus, there is need for managing absence among various organisations through various approaches. Sector like manufacturing and production experienced a slight decline in the average days of employee absence. Their level moved from 7.2 days in 2008 to 6.5 days in 2009. By 2009, the average level of employee absence nationally for UK was 7.4 days (CIPD, 2009: 4). Moreover, their statistical data, they provide the average working time lost per employee per year. For instance, in 2000 it was 4.1%, 3.8% in 2001, 4.4% in 2002, 3.9% in 2003, 4.0% in 2004, 3.7% in 2005, 3.5% in 2006, 3.7% in 2007, 3.5% in 2008 and 3.3% in 2009. In relation to various sectors of the economy, public sector recorded the highest (9.7 days per employee) in 2009. This was a reduction of 0.1 days from the previous year. The second in the order is the non-profit sector which had 9.4 days per employee in 2009. This was an increase in this period as the previous year was 8.5 days per employee (CIPD, 2009: 5). CIPD (2009) goes ahead a gives break down for various sector of the UKs economy. These are listed in page 5 to 12. The significance of managing absenteeism lies on the cost incurred by organisations and associated disruptions. According to McLean (2008: 394), absenteeism is a costly affair. Gale (2003, p.75 cited in McLean 2008) notes that ‘cost of absenteeism won’t go down until employers make greater efforts to manage their impact’ (p.394). To contextualise this discussion, Howart (2005:3) presents an interest theoretical discussion. He notes that ‘an organisation employing 1, 000 staff with an absence of % is losing around 9, 000 days a year in worker productivity. Even on an average pay of 18, 000 pounds per employee, this is equivalent to well over 700 000 in sick pay per year plus potential overtime or agency cover cost’. For instance, the absence rate of 3.5% or 8 days per employee in 2006 is estimated to have caused employer 598 pounds per employee per year. .according to CIPD (2009:13), the annual cost of absence in 2009 was 692 Britain pounds per employee per year. In their findings, public sector had the highest cost at 784 pounds per employee per year. This was followed by manufacturing and production sector (754) pounds. In the same period, it is the private services organisation that recorded the lowest at 666 pounds per person per year. Apart from these costs, McLean (2008: 394) notes that absence causes drain on a firm. These direct costs include lost days, money, and productivity & reduced service provision. On the other hand indirect costs include increased work load to the present employees which might lead to low morale if the concern isn’t addressed adequately. Apart from cost and associated disruptions, absenteeism signifies a symptom of functional failure in organisational procedures and functions (McLean, 2008: 397). Such occurrence might be an indication of disconnect between employees and the work environment. The argument in this context is not about curing the sickness, but solving the cause. Bennet (2002: 431) identifies contributory factors to sickness in relation to organisation procedures and processes as the way in which tasks are organised, structure of the organisation and nature of management hierarchy among others. The later statements have been proven to affect worker’s commitment. If the worker is less committed he is like to feign sickness and thus miss work (p.432). Howarth (2005: 3) notes that it leads to questioning of management credibility, erosion of business reputation and reduced customer service. Thus, in a nutshell, managing absence is critical in various ways. The first is to reduce the cost associated with it as seen above. Secondly, it is important in reducing disruptions associated with such absence. Lastly, absenteeism being an indication of weakness in organisational procedures and process can be used to re-organise these organisational structures so as to create an effective one. This observation is summarised by Persaud (2007 cited in McLean, 2008) who states that ‘clearly absence levels must be known and monitored in order to identify problems and to try alleviate any work related stressors, and/ or any work life imbalance’. This is based on the premise that the output of a healthy workforce is higher as compared to sick one (p.397). 4.0 Contemporary practices in Absence management Based on the realisation of how costly absence is to the organisations and how it forms a symptom of organisational failure, organisations must put in place various measures so as to overcome the same. The solution lies in adopting two pronged approach where the manager manages absence itself or manage its impact on operations and costs (Tim & John, 2011: 175). In this context, solution lies in setting optimal absenteeism level in relation to wage rate (Tim & John, 2011: 177). The answer to whole of these is to set up absence management policy. These policies are aimed at discouraging the vice. Nevertheless, the policies should not be used to punish the employees or induce direct disciplining (Bennett, 2002: 433 & 434). Howarth (2005: 4) offers a six point platform of how to manage absence. The first is the formulation of the policy and making all employees aware of the same. Secondly, is the introduction of effective attendance monitoring. The third is to introduce return to work interview. Fourth, ensuring employees access medical support. The fifth is to proactively review work schedules and workloads. Lastly, managers should introduce review process for long-term absence. CIPD (2009: 27) provides for the same procedure with expanded steps. However, Hayday (2008: 33) notes that policy shouldn’t be operated in isolation, but with a mixture of other approaches. According to him, line manager are integral in achieving low level of absence (p.30). 5.0 Conclusion The aim of the paper was to examine ways in which contemporary organisations can manage employee absence. It was found out that the major cause of absence is employee sickness. In terms of ranking, these might vary depending on the employment terms. Apart from this, organisational processes and procedures are a contributory factor. Why managing employee absence is critical is because of the cost involved. Apart from this, there is the workload that the other colleagues suffer plus reduced customer service among others. Lastly, the paper found out that the best way to manage employee absence is through strategy formulation,. This strategy should address various contributory factors. References Bennett, H 2002, Employee commitment: the key to absence management in local government? Leadership & Organisation Development Journal, 23(8), p. 430-441. CIPD 2012, Absence Measurement and Management Factsheet, Available at: www.cipd.co.uk/hr-resources/factsheets/absence-measurement-management.aspx. CIPD 2009, Annual Survey Report 2009. Available at: http://www.cipd.co.uk/NR/rdonlyres/45894199-81E7-4FDF-9E16- 2C7339A4AAAA/0/4926AbsenceSRWEB.pdf. Denning, S 2000, Practice of workplace participation: management-employee relations at three participatory firms, West port, CT: Greenwood publishing group. Hayday, S 2008, The fine line of absence management, Strategic HR Review, 7(2), p. 28-33. Howarth, J 2005, Viewpoint: Absence management, Emerald Group Publishing, 21(9), p. 3-4. McLean, A 2007, The management of absence: why it matters: An analysis of absence management issues, with a case study based in a UK academic library. Library Management, 29 (4/5), p. 392- 413. Sage 2011, How to manage employee absence. available at: http://www.snowdropkcs.co.uk/Files/Absence%20Management%20Whitepaper_12- 11.pdf. Sum Total Systems 2011, Absence management. Available at: http://www.ihrim.org/Pubonline/Wire/July12/SumT_wp_absence_management_time_ productivity.pdf. Tim, B. & John, T 2011, Worker Absenteeism and Sick Pay. Cambridge: Cambridge University Press. Appendices Appendix 1: Major causes of employee absenteeism Source: Bolton and Hughes, 2001, p. 27 cited in Bennett, 2007, p.396 Read More