Employee absenteeism and turnover can be serious problems for organizations. In this lesson, you'll learn about absenteeism and turnover, their impact and what can be done to reduce their occurrence. A short quiz follows.
Absenteeism and Turnover
Meet Caroline. She's a human research manager for a large microchip-manufacturing firm, and she has a problem. Her company is suffering from high levels of both absenteeism and turnover. Absenteeism is a pattern or habit of an employee missing work, often for no good reason.
Turnover is the number or percentage of an employer's workforce that must be replaced due to the voluntary and involuntary separation of employees from employment. Voluntary turnover includes leaving employment to retire, illness, returning to school and better career opportunities, while involuntary turnover includes layoffs and terminations for poor performance or disciplinary problems.
A high degree of absenteeism and turnover can cause serious problems for businesses. Absenteeism hurts productivity and costs money. Caroline's company, for example, is 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. Although Caroline suspects that many of these employees are abusing their sick leave, it's very hard to prove.
Turnover is even a more serious problem for Caroline's company. 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.
Caroline needs to find a solution to the company's rampant absenteeism and turnover. Extrinsic and intrinsic 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 Caroline can use to encourage employee retention include:
- Merit raises
- Raises to stay competitive with the market
- Increasing benefits, such as healthcare, vision and dental insurance
- Flexible schedules
- Stock options and other bonuses
Intrinsic motivation can also be a strategy that Caroline employs. Intrinsic motivation comes from inside an employee rather than being external. It's the personal satisfaction a person feels from his/her job. Intrinsic motivation is harder for HR professionals to develop because they have less control over them. However, Caroline can attempt to create a work environment that fosters a greater sense of job satisfaction. For example, the company can give its engineers and researchers more control and freedom over their work and allow them to participate in the decision making that affects them.
Caroline can also develop solutions for involuntary turnover. Discharge due to inadequate job performance may be remedied through revamping the company's training program to make it more effective. Likewise, discharge due to disciplinary issues may be reduced through proper training of employees and proper training of managers to serve as effective coaches or guides for their employees.
Absenteeism can be handled in a similar manner with the use of extrinsic rewards for perfect attendance each quarter, for example. Moreover, Caroline needs to ensure that the company has a disciplinary policy in place for unexcused absences, that employees are trained on the policy and that direct supervisors enforce it. For example, one unexcused absence in any given year may result in a verbal warning; a second may result in a written warning and a third in termination.
Let's review what we've learned. Absenteeism is a pattern or habit of an employee missing work, often for no good reason, while turnover is the number or percentage of an employer's workforce that must be replaced due to the voluntary and involuntary separation of employees from employment. Both absenteeism and turnover can cost an organization dearly in terms of productivity, money and time. HR professionals can attempt to stem the tide of absenteeism and turnover utilizing different strategies, including extrinsic rewards, intrinsic motivation and training.
After you've completed this lesson, you'll be able to:
- Define absenteeism and turnover
- Describe the impact and costs of both absenteeism and turnover
- Explain extrinsic and intrinsic solutions companies can implement to deal with absenteeism and turnover