Absenteeism rate: The hidden champion key performance indicator to measure job satisfaction in an organization
When workers are absent from work, this can cause many problems for organizations. Although organizations expect employees to take time off for doctor appointments and sickness, excessive absenteeism can lead to decreased productivity (Forbes, 2013). One of the best competitive advantages for organizations is the people that they hire. When talent is absent from work, this can have a deleterious effect on organizational effectiveness. A survey of European countries conducted by Eurofound revealed that, on average, rates of absence across Europe are between 3% and 6% of working time. Taking this into consideration makes absenteeism rate a hidden champion key performance indicator (KPI) for productivity, employee engagement and leadership effectiveness. This blog post discusses the causes and costs of absenteeism as well as how to measure and reduce it.
Employees who are committed to their organization tend to be present and avoid absenteeism.
Disengaged Employees don’t come to work!
There are many reasons why employees are absent from work, including dealing with personal issues such as depression, illness and childcare obligations. However, one of the biggest reasons is they don’t feel engaged with their work (Forbes, 2013). Employees will not show up for work if they don’t feel a connection with their supervisor, coworkers or with the work itself.
Bullying leads to absenteeism
When employees are harassed or bullied by their supervisors or peers they are more reluctant to come to work. In fact, many will call in sick to avoid the stressful situation that bullying creates. Examples of bullying at work include the use of psychological tactics such as harassing, offending or socially excluding someone repeatedly over a long-term period, typically around six months. Research shows that workplace bullying leads to poor health and subsequent absences from work (Campanini et al., 2013). Victims of workplace bullying become more anxious and lose their vigor. It is important that employers crack down on bullying to reduce absenteeism.
Burnout leads to absenteeism
Employees who are overloaded at work and feel underappreciated also tend to be absent. If the workplace is stressful because of low morale and too many meetings and deadlines, there will be a lack of engagement. Personal stress outside of work can also lead to employees being absent (Forbes, 2013).
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Absenteeism hits the bottom line
In 2014, Gallup conducted a survey of 94,000 employees across 14 major occupation within the United States and found that of the 77% of workers who had chronic health issues, the total annual costs related to losses in productivity totaled $84 billion. Most of this loss was in the professional occupations. A recent survey in 2017 found that one of the leading causes of absenteeism was due to the rise in diabetes, costing U.S. employers an estimated $20.4 billion annually (Gallup). There are several reasons why absenteeism leads to lower productivity including salaries still paid to absent employees, the cost of replacement workers, and the administrative costs of dealing with absenteeism (Forbes, 2013). Moreover, when employees are absent from work this can lead to poor quality of services because of understaffing. When employees engage in additional work to cover the loss of absent employees, this can lead to reduced productivity, safety issues, and poor morale.
Job satisfaction is considered the main determinant of absenteeism
Other sources of absenteeism are linked to poor morale and disengagement. This is one reason why job satisfaction is considered the main determinant of absenteeism (Sturges et al., 2005). In the early 1990s, Hanish and Hulin (1991) theorized that absenteeism was a reflection of ‘invisible’ attitudes such as job dissatisfaction. Hanish and Hulin speculated that employees who are absent from work are expressing their negative attachment to the organization. In contrast, employees who are committed to their organization tend to be present and avoid absenteeism. Several meta-analytic studies have supported this linkage between job satisfaction and absenteeism, showing that job satisfaction is consistently found to be negatively associated with absence (e.g., Hackett et al., 1989). Organizations can also focus on the links between job satisfaction and absenteeism. It is important to do this because “positive attitudes can at times serve to “pull” the individual towards the organization and the reverse can be expected when attitudes are more negative’ (George and Jones, 2002, p.94).
Understanding why employees are unhappy with their work is step number one
First, organizations can seek to identify why employees are unhappy with their work through a focus on facets of job satisfaction. Facets of job satisfaction include pay, supervision, coworkers, work and promotional opportunities (Aamodt, 2007). One of the most important predictors of absenteeism is satisfaction with co-workers (Punnett et al., 2007). The research suggests that although pay matters, it is the intrinsic and extrinsic satisfaction factors such as responsibility, organizational loyalty, and security that are important. As these factors decrease, absenteeism starts to rise (Punnett et al., 2007).
How to beat absenteeism through raising morale
It is a challenge for organizations to combat absenteeism because many employees have legitimate reasons for missing work. One suggestion is to implement a mandatory paid sick leave policy, where each employee receives a specified number of days each year for sickness. Organizations can also implement employee fitness programs that incorporate health and well-being practices into the workplace such as exercise facilities and healthy food options (Gebhardt & Crump, 1990).
Given the importance of job satisfaction in reducing absenteeism, it is important for organizations to identify those factors that are important for job satisfaction within their firm. Although pay is an incentive, most employees also want recognition for their hard work. Well- structured rewards are helpful in bringing down the level of absenteeism (Camp & Lambert, 2006). The research suggests implementing some form of incentive reward system with feedback can be an effective method of reducing absenteeism (Camden, Price and Ludwig, 2011). Overall, to reduce absenteeism, organizations need to understand the root causes. It is important to have a clear understanding of the absence itself to alleviate the negative consequences. Organizations should have human resource management policies in place that create a positive work environment where employees are enthusiastic about coming to work, including flexible working arrangements and rewards for good attendance; in fact, these types of work-based policies have been found to reduce absenteeism (O’Reilly, 2003).
Effective leadership tends to decrease abseentism
Effective leadership is also important for reducing absenteeism. Even if employees are engaging in dangerous occupations, supervisors who are supportive tend to have fewer subordinates who are absent from work. In a study on safety and absenteeism, researchers found that a job’s level of risk was negligible compared to the influence of the supervisor. The perception of danger on the job did not play a role in predicting absenteeism (Biron & Bamberger, 2012).
What gets measured gets done: Utilizing absenteeism rate as management KPI
Increasing employee engagement and job satisfaction is one of the strategic targets of many organizations around the globe. Taking into consideration the link of absenteeism rate with both employee engagement and job satisfaction makes it an easy to use and low-cost key performance indicator (KPI). You don't need highly sophisticated algorithms and data cubes to calculate absenteeism rate. Just put the lost hours due to absent employees in relation to the total working hours of your organization or department. Monitor and discuss the abenteeism rate on a regular basis (e.g. monthly) with your team and look how it develops over time. Of course, don't forget to define a target you want to achieve by making your organization an attractive place to work.
In conclusion, it is important for organizations to understand the roots of chronic absenteeism and appreciate its linkage to job satisfaction. When employees are engaged and are working in a positive and non-toxic environment, they are less likely to be absent.
Aamodt, M. G. (1996). Applied Industrial/Organizational Psychology (2nd ed.). USA: Brooks/Cole Publishing Company.
Biron, M. & Bamberger, P. (2012). Aversive Workplace Conditions and Absenteeism: Taking Referent Group Norms and Supervisor Support Into Account. Journal of Applied Psychology.
Camden, M. C., Price, V. A., Ludwig, T. D. (2011). Reducing absenteeism and rescheduling among grocery store employees with point-contingent rewards. Journal of Organizational Behavior Management.
Camp, S.D., & Lambert, E.G. (2006). The influence of organizational incentives on absenteeism. Criminal Justice Policy Review, 17, 144-172.
Campanini, P., Conway, P. M., & Neri, L. L. (2013). Workplace bullying and sickness absenteeism. Epidemiologia & Prevenzione, 37, 8–16.
Forbes. (2013). The causes and costs of absenteeism in the workplace.
Hackett, R.D., Bycio, P. and Guion, R.M. (1989), “Absenteeism among hospital nurses: an idiographic longitudinal analysis”, Academy of Management Journal, Vol. 32, pp. 424-53.
Hanisch, K. A., & Hulin, C. L. (1991). General attitudes and organizational withdrawal: An evaluation of a causal model. Journal of Vocational Behavior, 39, 110-128.
O’Reilly, S. (2003). At-a-glance guide to managing absence- effective employee absence management policies. Personnel Today 23-24.
Punnett, B. J., Greenidge, D., & Ramsey, J. (2007). Job attitudes and absenteeism: A study in the English-speaking Caribbean. Journal of World Business, 42(2), 214-227.
Sturges, J., Conway, N., Guest, D. and Liefooghe, A. (2005). Managing the career deal: the psychological contract as a framework for understanding career management. Journal of Organizational Behavior, Vol. 26, pp. 821-38.
Annette was born in England and now lives in the United States. She has a PhD in Industrial and Organizational Psychology and has taught at several institutions. Annette has published in several journals, including Journal of Applied Psychology, Personnel Psychology, Human Resource Development Quarterly, and Organizational Research Methods. She worked in the public and private sector for many years, primarily as a management trainer.
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