Employee Relation Problem - Finder Industries - Case Study Example

Finder’ Case Study Contents Introduction 3 Analysis of the Situation 3 Employee relation problem 4 Solutions 6 Recommendation 9 Management of Change 10 Conclusion 12 Reference 13 Bibliography 14 Appendix 15 Introduction Employee relation concept is the balance of bargaining power in between the buyers and the sellers. One of the results is that the employee relation policies and the practices can be rendered illegal, irrelevant or expensive to operate because of the legislative intervention. Changes in corporate environment by way of influencing the balancing power, explains the changes needed over the time. In the process of employee relation activities, mangers should behave in a reasonable and fair manner and also influence other management colleagues to behave in a similar manner. It is important for the managers to appreciate the principle of the procedure of employee relation is to establish a set standard of behaviour. However managers must also appreciate as to why such practice is important to protect and advance the management interest. Change and innovation in the employee relations policies as well as practices helps the firm o gain a competitive advantage over its competitors (Gennard &Judge, 2005, p.4). Therefore it has been said that the management needs to understand the employee relation. This management report deals with a case study of Finder and aims to analyse the current situation of the employees and recommend solutions. In addition to the report a reflective statement has also been provided. Analysis of the Situation Finder Industries was established in the year 1930s and dealt with high precision engineering manufacturer. It had over the years grown on the basis of high quality and for its innovation in technology. It has been operating in 70 countries and employs about 20,000 people and manufactures patented medical equipments and technologies which are used in the hospitals across the globe. The company has managed to emerged from the global financial crises in a relatively health position. The demand for its products is strong and the new products which are manufactured by the company have been into the fore front of some of the non invasive medical procedure. The company also managed to reduce waste during the production process and improve the productivity eliminating the defects in support of total quality. But the UK site was ranked poor in some related areas and demanded targets for immediate improvement. Employee relation problem As per the case study Finder Industries faced one of the major problems in the area of absenteeism. The cost of absenteeism has been the highest in UK facility especially among the manufacturing operatives and research and development staffs. About 1500 staff was employed in the manufacturing operatives and 200 staff employed in the research and development. The rate of absenteeism was about 10% which was much higher than the industry average. The employees mainly availed the sick leave mainly the long term sick leave. Also short term sick leave was also high such as such as night shift workers being absent on Friday nights, or day operatives absent when scheduled to work on a Saturday. Many of the employees absent were not subject to sanction as they returned to work. As a result they continue to incur the annual leave. Reason behind a large percentage of absenteeism may be due to numerous factors. According to reports, about 40 million days are lost each annual year to workplace absenteeism. Nearly about 93% of the employees quote cold and flu as one of the cause for being absent but in reality half of the workers have actually nothing with respect to health. The absenteeism had an inverse impact in the overall UK industry. According to CBI 11.5bn in the year 2002 was paid out through wages to the absent workforce and temporary staff. But however it is important to manage absenteeism and it is actually quite simple to manage absenteeism among the employees (BBC News, 2004). Finder Industries has been reported to have the largest absenteeism of about 10% which is much higher than the average. Excess absence often marks in an increased indirect cost of absenteeism. Due to the high percentage of absence rate Finder industries may suffer due to lost productivity. Finder industries might not be able to meet the production and the service requirements. Due to high rate of absenteeism, the organisation usually tends to replace the missing workers and pay a higher rate than the permanent employees. The overtime levels are approximately 28% higher in facilities with high absenteeism. When the organisations experiences a high level of absenteeism and which gets coupled with collective bargaining which provided bonus on top of federal needs. Thus this might lead to payroll cost amounting to be almost 50% higher (Circadian, 2005, p. 3). Mangers must take the responsibility for the control of absenteeism in the organisation and must take an objective attitude towards the problem of absenteeism. It has been noted that about 70% of the absenteeism are due to sickness which are imagined and not real. Factors of Absenteeism It can be assumed that Truancy being one of the factors for employees being absent in Finder Industries and this must be treated by the management as a symptom of human behaviour. Another factor responsible might be the effect of shift work. Most of the physicians are of the opinion that ill health is caused among workers working at the night shifts. Age is also another reason for the problem. The rate of sick leave is reported to be high in the age group of 60s as compared to 20 to 38 years of age. This setback can be assumed in the case of Finder Industries also. Short term absences often represent an important factor in cost for sick leave. Environmental factors on and off the job also results in high rate of absenteeism. Excessive worry due to difficulties on the job or personal conflict with other workers or personnel can be assumed to be one of the reasons for high rate of absenteeism in Finder Industries. Employee dissatisfaction can also affect the absence rate. According to a study conducted, a group incurring the highest absence rate, about one fifth of the employee were very satisfied with the organisation and with their performance. The supervisors and the managers have recognised that certain emotional hazards which tend to destroy the morale and the efficiency and are likely to cause discontent in individuals and in groups of employees (Luongo, n.d, p. 348-351). Solutions Finder Industries apart from the problem of absenteeism was performing well and strongly and managed to stand still after the economic crises. The production was effective and the company was getting new projects based on its technology and quality of service. Finder Industries was known for its service and innovation in technology. But due to high rate of absenteeism, the company could suffer both in terms of production and technology. Thus in order to reduce the absenteeism and the excess cost which is associated with absence, the first step for a manager is to reduce the rate of absenteeism thereby the effects that absenteeism has on the business. The first step for a manger in Finder Industries is to accurately and efficiently track the rate of absenteeism and the pattern on a regular basis. It is assumed that Finder industries did not maintain a proper track record for which the employees had the liberty of taking a higher rate of leave or were absent unconditionally. The organisation should adopt the system of automated means which would track every instance of the employees being absent. Once the root cause of the problem is known to the manager, he can take the necessary steps required to handle the problem. In addition the manager might need to include the use of sophisticated rules process and engines in order to enforce the absence policies compliance with the union, federal rules and the state, improve the technology of absence management and increase employee satisfaction within the workplace (Levine, 1999). Finder Industries can cut cost and enjoy cost savings by reducing the pay roll expenses, improved productivity, reduce the compliance risk. When the payroll expense gets reduced it provides manager with regular and accurate reports of absenteeism, the ongoing pattern and the root cause, it would reduce the occurrence of non- reported PTO. The managers would be able to reduce the overtime cost by selecting employee’s in order to cover the absence which is based on the competence, hour worked by the employees and training. One important solution to the problem of absenteeism is the use of specialised software in order to manage the day to day activities and would reduce the rate of absenteeism. Figure 1: Rate of Absenteeism (Source: Circadian, 2005) The above figure is an assumption citing as to the reason for high rate of absenteeism in Finder Industries. It has been said in the case that Finder industries rate of absenteeism rated almost 10% in the industry which was much more than the average. Thus the above figure shows that organisation with verbal discussion tends to have a higher rate of absent employees than organisation using a specialised software. Organisation with verbal discussion amounted to 10% of the rate of absenteeism, organisation which maintained its track record through paper pen resulted in an average of about 9.6%, companies maintained through excel resulted in 9.3% and the least was experienced with organisation which maintained through specialized software and the rate was much less than the other three accounted to 7.7%. Finder Industries should improve productivity because it generally leads to more predictable schedules which in turn results in a more dedicated as well as productive employees. The company can set and enforce an appropriate limit for the overtime which would reduce the employee burnout and thus would enhance improvement in its overall business. Reduction in the compliance risk is also a solution for Finder Industries to discourage the high percentage of workers being absent for the work. However solutions related to high absenteeism mostly requires more than the management policies with respect to the absenteeism. Managers need to focus on tactics and symptoms which are mostly viewed by the employees as punitive and rigid (Lowe, 2010, p.60). The most effectual check on unusual absence from workplace is a constructive attitude on the part of the managers. Thus if the managers tries to find out the pattern of absenteeism he has all the possible chances of getting closer to the problem and ultimately solving it. Finder industries manager needs to find out the real reason by studying the record of the employee over a certain period of time and thus can determine the remedy. One possible solution towards the problem is that managers must approach the problem with a positive approach and not address the issue as negative approach. Appeals which would related the employees with fair play, importance to the work group and other employees, increment, advancement are some of the matters which if a manager takes into account would result in fruitful condition. Similarly Finder Industries also need to adapt to such a positive approach in order to reduce the rate of absenteeism especially in long term sick leaves. Recommendation It is recommended to Finder Industries to focus more on attendance management which is the common and time honoured approach for managing employee absence. The attendance management program tends to use a series of carrot and stick in order to enforce company time off policies. The carrot side will hold rewards and recognition for exemplary attendance and on the stick side, punishment are entrusted on the employees because of excessive use of the excused absences. The company had faced absenteeism problem due to long term leave ranging from 3 months to 6 months, thus with health promotion it is assumed that the rate would eventually get down. The managers can introduce wellness initiative programs, fitness centers situated inside the organisation, smoking cessation and also diet education program. Thus with all of these efforts would help to reduce the issue of absenteeism. Employee incentive program have been recognised as one of the effective measures in reducing workplace absenteeism. Finder Industries should try to identify possible reason and then opt for incentives as possible solution. An incentive campaign can be introduced where an employee would gain points which they can redeem for merchandise. If the organisation tends to reward the little things that an employee contributes for the success of the organisation such as employees meeting the deadline, or having a perfect attendance the rate of absenteeism would decrease to a very large extent (Muchinsky, 2004). Finder industries should be able to communicate the goals as well as the reward for achieving the goals. The employees of the Finder Industries need to relate the goals and the reward. In addition, it is important to establish an incentive scheme which would improve the absenteeism rate. Thus the success of the incentive scheme should be measured by the company. It can be done by measuring whether the company is able to meet up with the objectives. The manger can consult the HR person to determine the rate of absenteeism. Another set of recommendation is flexible hours. Flexible hours are always been a great benefit which usually does not cost anything to the organisation and at the same time gives an advantage to the employees. According to research, the suggested job schedule tends to benefit the company as it would give more choice of how they managed to balance work and family. The suggested time is from 7am to 4pm; 8am to 5pm and 9am to 6pm (Singh & Khanna, 2011, p. 167). The policy or the recommendation must effectively communicate with the employees regarding the expectations. The policies that are to be introduced should contain disincentives for utilizing sick leave. At the same time the policy must contain incentives for employee for excellent attendance. Such as if an employee does not utilise his sick leave for a given year, the employee would be entitled to financial rewards. Thus once the policy regarding sick leave have been agreed upon further research should be conducted. The rate of absenteeism and the effectiveness of the policy should be monitored as well as evaluated so that the management can keep a track of the changes and take active decisions with the current issue of absenteeism. Management of Change Management of Change is the process which is used to review the proposed changes to technology, materials, procedures, equipment, personnel and the facility operations before they are implemented in order to determine their effect on the safety vulnerabilities. Management of change is usually interpreted as related to permanent change made in the policies, procedures, equipment and personnel’s. Temporary changes should be managed as permanent changes. A change control form is useful in order to facilitate the procedure of change management (H2Best Practices Home, 2011). The problem with Finder Industries lies with its high rate of absenteeism and the organisation is concerned of how to bring down the level to about 4% to 5%. Thus with the help of effective steps the management of the Finder industries would be able to implement the changes and policies. In order to reduce the rate of absenteeism it is necessary for the organisation to adopt the specialised software as mentioned earlier, it would reduce the rate of absenteeism by nearly about 7 %. Thus management of change would impose implementing of specialised software to mark the attendance and this way the employees will not have the privilege to get extra sick leave. The management need to control the problem at the lowest level. Another change implemented would be the rules and policies regarding issuing sick leaves by employees. Policies will be implemented which would help employees not to take extra amount of sick leave and enhance the productivity of the organisation. Motivating the employees and clarifying the priorities of the employee will reduce absenteeism and at the same time improve production. Flexible hours will be implemented as per the requirements of the employees. As it has been said that with flexible working hour employees tends to get motivated and it would further reduce the rate of absenteeism. Along with the flexible working hours, incentive programs will be a part of the organisation policies which would motivate the employees to be present and reduce the rate of absenteeism. Thus by implementing the required change management into the organisation it can be assumed that Finder Industries would be able to tackle the issue of absenteeism in UK and the policies would motivate the employees to work effectively and enhance the production. Conclusion UK has been suffering from absenteeism which is preventing business from performing t its peak. And similar is the case with Finder industries whose major issue was the high rate of absenteeism amounting to about 10% per year. The company to tackle the problem has implemented certain policies which would help it to reduce the rate of absents employees and motivated the employees to work and avoid taking sick leaves. Sick leaves and absenteeism has the capacity to take a heavy toll on the production of the company and tends to place a financial burden on the employees. The effects of excessive absenteeism is not only limited to a single work group or division, it affects the entire business environment. The cost of absence affects hugely on the organisation. Thus it is important to tackle the problem of absenteeism at the root cause level so that it does not affect the entire organisation. Finder Industries to tackle the absenteeism will implement certain policies and has undergone change management in order to reduce the effect of absenteeism. The company has been performing well even after the financial crises with only disadvantage of high rate of absenteeism. Thus it can be concluded that with the set recommendation and management of change Finder Industries would surely be able to reduce the rate of absenteeism from 10% to an average of about 7% in its first year of implementation. Reference BBC News. 2004. The continuing cost of absenteeism < http://news.bbc.co.uk/2/hi/business/3563609.stm> [Accessed 2 April 2012]. Circadian. 2005. Absenteeism: The Bottom Line Killer < http://www.workforceinstitute.org/wp-content/themes/revolution/docs/Absenteeism-Bottom-Line.pdf> [Accessed 2 April 2012]. Gennard, J. & Judge, G. 2005. Employee relations. 4th edn. London: CIPD Publishing. H2Best Practices Home. 2011. Management of Change < http://h2bestpractices.org/safety_culture/procedures/moc.asp> [Accessed 3 April, 2012]. Levine, G. 1999. Absenteeism Causes and Cures < http://findarticles.com/p/articles/mi_m3638/is_12_40/ai_59521650/> [Accessed 2 April 2012]. Lowe, G. 2010. Creating Healthy Organizations: How Vibrant Workplaces Inspire Employees to Achieve Sustainable Success. Canada: University of Toronto Press. Luongo, E. P. No Date. Analysis of Absenteeism in Industry < http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1577980/pdf/califmed00108-0116.pdf> [Accessed 3 April 2012]. Muchinsky, P. M. 2004. Employee absenteeism: A review of the literature < http://www.sciencedirect.com/science/article/pii/0001879177900665> [Accessed 3 April 2012]. Singh, R. K. & Khanna, P. 2011. Suggestions & Recommendations To Reduce Employee Absenteeism And Personnel Constant Turnover In An Organization < http://www.theinternationaljournal.org/ojs/index.php?journal=tij&page=article&op=view&path%5B%5D=157&path%5B%5D=pdf> [Accessed 3 April 2012]. Bibliography LeGault, A. 2002. Fairness in the Workplace. 3rd edn. Canada: CCH Canadian Limited Appendix Reflective statement This project which was based on the case study of Finder Industries has helped to come across a very popular issue which is faced by a maximum number of industries in UK is that of the high rate of absenteeism. It has been founded that organisation are taking effective measure to tackle the problem of absenteeism. When an employee has been absent from its workplace for a longer duration the cost is beard by the organisation. Thus it is important for an employee to provide an effective result and reduce the rate of being absent. The goal of the project was to cite recommendation to the Finder Industries so that it can implement it in its policies and reduce the rate of absenteeism. From the given project in have learnt that there are many factors which actually bother an employee and his performance and the reasons as to why an employee is absent from his work. One of the main reasons is dissatisfaction or the environment, hangouts, and Monday blues. Motivation factor is also a key issue of employees being absent from his work. therefore according to studies it has been proved that providing the employees with incentives and other programs boots up their motivation and are willing to work even more and effectively. This project has helped to learn how employees should motivate his employees and how much an employee means for the organisation. Also in the whole process of the project I have learned how to tackle the issues concerning an organisation and how to handle in a positive manner. Read More