Does Store Culture Affect Absenteeism Rates: An Investigation into the Bunnings Group - Case Study Example

Executive summary Bunnings is one of the most successful business groups in Australia, with operations in Australia and New Zealand. The company has an extensive network of shops that sell home hardware products including interior and exterior needs. Like most companies Bunnings has a distinct culture that stems from the kind of leadership the company has, the nature and background of its employees, and other systems that are in place within the company which might influence how employees behave. This research focuses on the issue of how culture impacts upon absenteeism. It hypothesizes that a company that has a culture that is stringent on employees with regards to attendance and that creates an optimal work place condition by providing jobs that are enriching, teamwork, and professional development is less likely to have high rates of absenteeism. The research seeks to use a survey to elicit responses from thirty-three Bunnings stores in Queensland. The researcher is aware that response rates might be low but there will be a follow-up of the targeted with phone calls and the possibility of doing the survey by phone if the store manager so desires. The data will be analyzed by means of SPSS which has proven effective in analyzing the kind of question posed in this research, namely, “Does store culture affect absenteeism rates? An investigation into the Bunnings Group.” Problem background The issue of absenteeism is one that is of great concern to many organizations. This is because absenteeism can impact upon the effectiveness of an organization in meeting the goals it has set for itself. When customers are expecting goods to be delivered to them and a company experiences the kind of absences that makes it unable to meet its goals, the reputation of the company suffers. More than that, the company can lose money, and while absenteeism itself may indicate that there is a problem of morale in the organization, this can quickly escalate to the point where a company might even have to close its doors. What are the causes of absenteeism? Obviously, if an employee is sick it is reasonable to assume that such an employee be able to take the time off so as not to infect others. An employee who is sick and comes to work may also not be as productive as he or she might otherwise be and so it would seem to be the course of wisdom for such an individual to stay at home. But when we talk about absenteeism in the workplace the reference is not to isolated cases of absenteeism. Rather, it refers to a pattern of absenteeism, which is also the kind of absenteeism that can have the most negative impact on a company’s success. There are indications that the perceptions of employees regarding the environment in which they work can play a part in whether or not absenteeism becomes a part and parcel of an organization. In other words, the kind of culture that an organization has might determine to some extent whether people are going to feel comfortable absenting themselves. A boss that is known as being overly stern might not be able to keep employees for very long, especially when the job market is such that people can find jobs easily; such a boss, however, who does not entertain unnecessary excuses for absenteeism might be able to ensure that there is always a full slate of people to do what needs to be done. To be sure, people might not work with joy in their hearts but that may not be the concern of such a boss; productivity is the main concern. The question whether the culture of an organization affects absenteeism in an important one which needs to be researched. 3. Aim and research questions While any organization might have elements that contribute to its culture across the board, there might also be elements that different various parts of an organization from another. For example, in some organizations, there is a stereotypical image of those in accounting as being dour and serious while those in sales and marketing are perceived as more outgoing. These may be stereotypes with no basis in reality but this is merely to underscore the point that within the same organization it is possible to have differences in culture even as an overarching culture defines the whole group. Such may be the case with Bunnings which has hundreds of warehouses and outlets in Australia and New Zealand dealing with such products as hardware. In Queensland, Australia, alone, Bunnings has 33 outlets, all of which present the company’s products to the public. Depending on such factors as leadership, cohesiveness or the lack thereof among employees, and other factors, there might be a wide variation in the culture or characteristics of particular outlets. This raises the following question: Does store culture affect employee absenteeism? 4. Literature review and theoretical framework In the article “Making Way for Positive Organization Culture,” Human Resources researcher Simran Khurana defines organization culture as “the sum of the different personalities of people in an organization “which creates a common ideology or identity for the organization. Some aspects of organization culture get created along the way, while most aspects are evolved by the founders of the organization” (Khurana http://www.hrprofessor.com). Regarding the importance of studying organizational culture Khurana cites the issue of identity and how a company might appear to its customers, vendors, employees and other external agencies. One of the more salient points Khurana makes is that some potential customers or business partners might study an organization’s culture before doing business with it. Khurana makes another point that might be true but might be seen to have negative undertones. Among the visible signals Khurana claims can offer clues to an organization’s culture are race and religion. Such a view might be a bit too simplistic and fail to factor in the prejudices that potential business partners or customers might have, all of which might include images or perceptions that have no basis in reality. The tone that the business founder or those at the top set for an organization cannot be overemphasized. “Senior management is responsible for creating a viable organization culture that suits the needs of the business and sends a strong message to outsiders. Hence certain values are enforced by seniors by setting examples and by propagating with the help of symbolic behaviors. This has a trickle-down effect in the organization and gets carried out to the grass root level” (Khurana http://www.hrprofessional.com). This trickles back to the issue of absenteeism. It would seem that an organization in which the leader is lax with respect to enforcing attendance might suffer from a culture where people can decide on a whim not to show up for work. If there is no punishment for such behaviour it is likely to attract many more employees who will exhibit the same behaviour. Etienne A. Gibbs, in the article, “Reducing the cost of employee absenteeism,” echoes some of what Khurani says, but notes that more than just paying a high price for absenteeism through financial and production loses and reduced morale, there are long term effects, and that the issue might be considered with an eye towards such elements as job satisfaction, because employees who are satisfied with their jobs have a greater likelihood of showing up at work than those who feel that the work place unchallenging or inadequate to meet their stimulation needs; in addition, attitude is considered important because some employees are willing to go to work even if they feel sick whereas others call in sick even when they are fit enough to play golf. Gibbs also notes that company culture may be a contributor to the problem. As Gibbs points out, “If management's attitude is lax and absenteeism is accepted as a normal practice, the organization's culture may have to be changed before attendance can be improved” (Gibbs http://www.management-info.biz/article/reducing-the-high-cost-of-7249.html). In the case of an organization such as Bunnings, which continues to make profit it might seem that all is well but it is possible that a closer look at individual stores will reveal disparities in profitability that may be linked to absenteeism rates. The importance of organizational culture in minimizing absenteeism is addressed in Root’s research, which also notes that organizational culture encompasses more than just lax oversight of management of supervisors. As Root (2005) notes, shifting an organization’s culture to highlight such issues as “workload issues, promoting teamwork, and fostering professional development” (Root 2005) could help make a difference. In fact, Fletcher and Jones (1992) suggests that the benefits to be gained from reducing absenteeism are not nebulous and that they can be quantified. As Fletcher and Jones point out, “minor improvements in such indicators as absenteeism and turnover can result in large savings. In a company with 1,000 employees, if labour turnover is 5 per cent and each employee costs L20,000 to replace with someone who is anywhere near effective (i.e. for training, lost time, recruitment, etc.) a saving of 1 per cent will be worth L200,000 in one year alone” (Fletcher & Jones 1992). In fairness, the notion that absenteeism costs a company money is intuitively easy to understand but in a provocative article, Belken (2006) notes that there also issues related to employees showing up at work when they are sick. As Belken explains, According to a recent survey by ComPsych, a Chicago company that provides employee assistance programs, 77 percent of workers say they come to work sick. We do it so often that experts have given it a name presenteeism, as in the opposite of absenteeism, describing time and productivity lost when employees are physically at work but not feeling well enough to be productive. Most say their workload does not allow time to be absent, or they fear their job would be in jeopardy if they did not come to work. (Belken 2006) This suggests that a culture that intimidates people to come into work when they are sick has its own problems. Also, research suggests that when employees have a high level of identification with a company they are less likely to do things that will jeopardize the survival of the company. A report by Schrodt (2002) indicates that employees did not necessarily always identify with the company but that there was a greater tendency for some to identify with their team mates within the company. This suggests that the proper use of teams, especially one in which the bonds were strong could guarantee that employees would take their jobs seriously if only in order not to disappoint the team mates with which they identify. The importance of Identification cannot be overemphasized. As Schrodt notes, “Identification is the "substance" of an individual-organization relationship and commitment is the "form". Apparently, identification is a more potent term for analyzing the individual-organization process because it readily suggests both process and product (Cheney & Tompkins, 1987)” (Schrodt 2002). 5. Sampling and research design The sampling units to be used are the 33 Bunnings stores in Queensland. As Duane Davis notes in the book Business Research for Decision Making, “Sampling units can be individuals, households, city blocks, census tracts, departments, companies, or any other logical unit that is relevant to the study at hand” (Duane 2005). The need to confine the research to Queensland has to do both with constraints on resources and the belief that focusing only on the stores in the Queensland area will help to unearth elements that differ among the stores. This is because with all the stores being in one state there is a likelihood that there are many similarities in terms of the kind of demographic that the stores target. While all the stores might have some elements of culture that are rooted in their being part of the Dunnings group, it is possible that going beyond one state, many other elements unknown to the researcher might intrude and confound the results. Also, limiting the research to one state helps to deal with the very real issue of lack of resources as noted above. The objective of this study is to determine if there is a link between store culture and employee absenteeism. In this case, it is possible to use a quantitative measure which relies on the perceptions of the managers both with regards to their management style and the overall atmosphere and culture in their store, which can then be compared with absentee rates to see whether there is an association. Also, considering how scattered the stores are within Queensland, the use of mail survey would be most appropriate. As Davis 2005 notes, “Generally speaking, the mail interview gives the researcher flexibility at a low cost. Additional advantages such as respondent anonymity, confidentiality, and leisureliness of response made this attractive data collection mechanism in the past” (Davis 2005). Because of problems associated with mail responses, this researcher will have a backup system of seeking to interview (with the same questions submitted by mail) the targeted managers by phone. 6. Operationalisation and measurement instrument (as applicable) The scope of this research is limited and so it is felt that using some of the existing instruments relating to Organizational Structure may not be appropriate. Knowledge of existing measurement elements, however, can be useful in crafting an appropriate instrument to meet the goals of this research. One of the more popular instruments to measure organizational culture is The Cultural Audit, which measures a large number of relevant dimensions and then classifies the organization with regards to how an individual scores on the dimensions in question. The Cultural Audit paradigm breaks down culture into various bipolar modes such as homogenous versus heterogenous culture; enriched versus managed culture, developing versus stationary culture, and balanced versus dissonant culture. While these characterizations are useful, it would seem that they could be used to advantage where the overall culture of an organization is being considered. On a micro-level core elements that have been measured include variety in skill level, task identity, along with task significance, and then autonomy and feedback. By skill variety is meant the degree to which a job requires a variety of different activities utilizing a range of skills. Task identity is the degree to which a job involves an identifiable piece of work rather than just a fragment of the whole. Task significance is the significance or impact of the tasks. By autonomy is meant the amount of discretion in deciding the methods of working, and feedback refers to the amount of clear information individuals get about the effectiveness of their work. Evidence suggests that jobs high on these elements, operating via a number of psychological states, produce higher levels of motivation and job satisfaction, high quality work performance and reduced levels of absenteeism and turnover. (Fletcher and Jones 1992) The survey questionnaire which will use measures that place respondents within one of two categories: culture that supports absenteeism and culture that does not support absenteeism. In other words, those who score highly on such measures as lax supervision, and overly friendly management are likely to be in the first category whereas those for which supervision is more stringent will indicate that they have a culture that is not lax. By the same token such elements as workload, for which excessive is a negative, promoting teamwork, professional development, and organizational structure will all be considered. On the other side of the coin will be absentee rates. In effect, the research will seek to find out if those shops that score highly on such elements as strong supervision, reasonable workload, promotion of teamwork, and offer professional development will have lower levels of absenteeism compared with those that are lax in supervision, do not promote teamwork, and have little or no professional development. 7. Proposed methods of data analysis Statistical Package for the Social Sciences (SPSS) will be used for analyzing the results of the survey. This program will allow for establishing the relevant possible correlations between absenteeism and organizational culture. This may be done by means of graphs or the use of Pearson’s correlation or even a scatter diagram. Also, where possible the researcher will follow up with the respondents in order to clarify any matters that are not clear. The questions will be coded in such a way that they can be input into SPSS in order to take advantage of the incredible versatility and efficiency of this program. Ethics Respondents will be given the assurance that the research will not show a specific link to their store. This assurance, which will be stated on the survey form, should provide a measure of assurance to those managers who might be worried that they would be revealing too much about their company or their individual store to an outsider. Also, highlighting that this is for school research purposes only should help to alleviate any fears they might have regarding the possible misuse of the information. Conclusion In an increasingly competitive marketplace, every organization needs to take a closer look at itself and to plan for the future. The notion that the customer is king or queen has given rise to a great deal of attention being given to customers. But customers have to be served by employees, which means that if these employees are unmotivated or are so lacking in identification for a company that they choose not to show up and without fear of any consequence there is no question that customers are not going to be happy for long. This research, therefore, is an attempt to highlight the need not just for organizations as a whole to consider how their culture impacts on such elements as absenteeism but actually for the research to come down at the micro level. This is because if, in a case like Bunnings, each individual shop is performing well it stands to reason that the organization as a whole will prosper. Bibliography Alston, Josh. “The Great Shopping Debate.” Townsville Bulletin (Dec 27, 2005):4. Belkin, Lisa. “Be productive: Call in sick.” International Herald Tribune, (Jan 18, 2006):16. “Bunnings trust lifts payout.” The Gold Coast Bulletin, (Feb 14, 2006):17. Davis, Duane. Business Research for Decision Making. California, USA: Brooks/Cole Thomson Learning, 2005. Fletcher, Ben & Jones, Fiona. “Measuring Organizational Culture: The Cultural Audit.” Managerial Auditing Journal, Vol. 7 Issue 6 (1992):30. Gibbs, Etienne A. “Reducing the High Cost of Absenteeism.” http://www.management-info.biz/article/reducing-the-high-cost-of-7249.html (October 20, 2006) Khurana, Simran. “Making way for Positive Organization Culture.” http://www.hrprofessor.com/article2.html (October 19, 2006) Root, Marie Margaret. “Strategies for minimizing absenteeism and optimizing workplace well-being.” Royal Roads University AAT (2005). Schrodt, Paul. “The relationship between organizational identification and organizational culture: Employee perceptions of culture and identification in a retail sales organization.” Communication Studies, Vol. 2 Issue 1, (Summer 2002):189. Read More