Employee Absenteeism

EMPLOYEE ABSENTEEISM: STRATEGIES FOR PROMOTING AN ATTENDANCE-ORIENTED CORPORATE CULTURE

WORKPLACE ABSENTEEISM: THE GROWING CHALLENGE A Critical Productivity, Cost and Quality Issue Employee absenteeism, an often "hidden" issue, albeit one of growing importance to Canadian organizations, translates into the interrelated issues of lost productivity, poorer quality of product/service and decreased customer satisfaction and has a potentially negative effect on other employees. Michael Millman, Manager, Municipal Labour Relations, Municipal Electric Association, works with some 180 public utility client organizations in Ontario. He is convinced that short-term absenteeism (defined as a high frequency of absence occurrences that are of short duration) is a major problem in North America with a significant cost impact on firms. Millman contends: "Organizations are penalizing their good performers when they 'allow' absenteeism to go unchecked. By 'promoting wealth without work' we compound the problem. We allow people to successfully start to fail." Nationally, it has been estimated that absenteeism lowers productivity levels by 1 to 2 percentage points. But while the negative impact of absenteeism on productivity, quality, customer satisfaction and competitive position is usually acknowledged, the real cost of absenteeism to an organization is either unrecognized or underestimated. The 1990 absence statistics for one large Canadian organization in the telecommunications industry help to put the costs-of-absenteeism issue into context. In this company, the average absence rate was 4.55 per cent (or 9.6 absent days per employee). This represented 127,629 lost productivity days, or 608 absent employees each day. Direct costs for the one-year period were $15.4 million, with total costs of $38.5 million. It is obvious that even a small reduction in overall absenteeism could result in significant cost savings. The acuteness of the problem is highlighted in Exhibit 1, which illustrates that a significant portion of the nearly 400 participant companies in a recent Conference Board of Canada compensation and human resources outlook survey considered employee absenteeism to be a current and growing problem. Employee absenteeism had increased in the last three years in close to a third of them. Nearly one-third

considered absenteeism a problem, and almost 20 per cent said that employee absenteeism had increased and was a problem.

Exhibit 1 Extent of Absenteeism Employee absenteeism in my organization: has increased in last 3 years 30% is considered to be a problem 32% has increased and is a problem 17% ________________________________________ Note: Number of responding organizations ranged from 343 to

392. Source: Compression Planning Outlook 1992, The Conference Borad of Canada. A Critical Issue for Human Resource Policy Planners The absenteeism issue is becoming all the more critical because of changes in the composition of the workforce and changes in societal expectations vis-a-vis work. The workforce of today is characterized by an aging population, an increase in the proportion of dual earners, a greater incidence of single parents and the higher participation rate of women. Results from a recent Statistics Canada survey showed absences from work increasing steadily from 1977 to 1991 for both men and women in all occupations. One factor responsible for the increase in absences revealed by these statistics is the aging Canadian workforce. But most of the increase is due to absences for personal reasons, a trend linked directly to the growing entry of women into the workforce and, in particular, according to Ernest Akyeampong, Chief, Labour Force Activity Section, Labour and Household Surveys Analysis Division, Statistics Canada, the increased presence of women with preschool children.1 The implication of these developments is clear. The very nature of absenteeism is changing, and absences related to personal/family demands are on the rise. Employee absence from work in the 1990s is often linked to factors not in existence when traditional policies were developed. In particular, the higher incidence of dual earners and single parents is a new phenomenon, one generally not taken into account by

CREATING AN ATTENDANCE-ORIENTED CORPORATE CULTURE

many now-outdated policies. For these reasons, absenteeism has become a policy issue.

Reasons for Employees' Absence from Work Laurence Kelly, President, IR Research Services, an independent research and publishing firm, is a recognized Canadian expert on this topic. Kelly stresses the importance and interrelationship of employee-related and job-related causes of absenteeism. Among these, several deserve particular attention. An Aging Population Specifically, older workers are generally acknowledged to have an increased propensity for certain types of illness or injury. For example, job-related back injuries tend to be more prevalent among older age categories of employees than among their younger counterparts. Attitude Towards Work The "entitlement" philosophy prevailing among some employees, coupled with the lack of understanding of what the employer-employee work contract really entails, may lead to abuse of sick leave provisions. Personal/Family Responsibilities The current situation, where the majority of parents are employed in the workplace, creates difficulties in balancing work and non-work responsibilities, especially for women, to whom society still assigns the primary family caregiving role. Difficulties that periodically arise to interrupt attendance at work might include the need to care for a sick child or to take an elderly relative to a medical appointment. Stress For many employees, work in the 1990s is characterized by fast-changing technology, increased workloads and job insecurity. The impact of stress on sickness and absenteeism is receiving increasing attention. For instance, a survey of employers done by the Canadian Institute of Stress and the Ontario Ministry of Labour found that 26 per cent of absenteeism is believed to be linked to stress.2 But establishing cause and effect is complicated, as it is often difficult to distinguish between job-related stress and lifestyle stress. As it is known that lasting improvement in attendance behaviour can come from addressing the root causes of dysfunctional stress, finding an appropriate corporate response becomes a challenging—but often impossible—task for employers.


The Absenteeism-Health Policy Link A fifth, overriding factor that ought not to be overlooked when discussing employee absenteeism is health policy. To some employees, the dollar benefits of not working may be nearly as attractive as those received from working. Without examining other cause-effect variables, it seems apparent that a high level (80 or 90 per cent) of salary received through long-term disability (LTD) or workers' compensation might provide a strong disincentive to return to work. A well-known example of apparent abuse of a generous national health insurance system is found in Sweden. Prior to 1991, Sweden's absenteeism rate was 25 days per person per year; half of all absences lasted no more than three days. In March 1991, state-paid benefits for the first three days of illness were reduced by one-quarter, with subsequent benefits (to 90 days) cut by one-tenth. In the first month after reform, 20 per cent fewer absences were reported. This suggests that, nationally, health benefit reforms can have a direct effect on absenteeism rates.3 In recent years, sharply escalating costs have focused the attention of both business and government on the issue of health-related absences from work. In Canada, workers' compensation is now a major cost issue. Revenue received by Canada's workers' compensation

boards in 1992 is estimated to be $6 billion, with debts totaling more than double that amount.4 In Quebec, officials of the Commission de la santé et securité du travail (CSST) had proposed raising premiums by 31 per cent to help offset the plan's large deficit, which was blamed on rising medical and rehabilitation costs and lengthy recovery periods for workplace accidents.5 To illustrate the extent of the problem, while the number of accident claims for 1992 was estimated at the time to fall by 12 per cent, the average duration of the indemnity period was projected to last 76.3 days, 16.5 days longer than originally anticipated.6 Under revisions to workers' compensation legislation being made or planned in several provincial jurisdictions, individual employers will assume greater cost accountability, as premium assessment will be directly tied to the organization's compensation claim experience. The role and responsibility of the medical community in combating rising health care costs also deserve scrutiny. In commenting on the perceived main cause of an absenteeism problem at her organization, one Conference Board survey respondent pointed a finger at "government benefit levels that pay close of 100 per cent of normal wages and a medical profession that readily supports time off work, despite the company's modified duty programs".

Exhibit 2 Minimizing Absence - Maximizing Attendance: A Policy Continuum absence attendance attendance absence control management improvement prevention reactive ----------------------------------------------------------------------------------- proactive -------------------- __________________________________________________________________________________________ Source: The Conference Borad of Canada Seeking Solutions: Strategies to Improve Attendance A Policy Framework Efforts aimed at controlling absenteeism and promoting an attendance oriented culture cover a wide spectrum (shown in Exhibit 2), ranging from those that are reactive in nature to those that are proactive or preventative in focus.

Reactive responses are primarily directed towards controlling and correcting. Corrective methods involve approaches that range from counselling to termination. In the 1990s, non-disciplinary interviews and warnings are replacing traditional disciplinary methods as appropriate ways to deal with absenteeism problems, and there is growing evidence that employee assistance programs (EAPs) are being used to help employees overcome problems that lead to absenteeism.


Proactive approaches include those measures aimed at preventing an absenteeism problem from developing. Health promotion and wellness programs have great potential to address major underlying causes of absenteeism, according to Laurence Kelly, who expects to see increased emphasis on such initiatives during the next few years. Included under the broad heading of proactive approaches are critical items such as safety training, ergonomics, general working conditions, hours of work, schedules, shifts and pace of work. Impact of Workplace Culture It is well known that attendance behaviour is strongly influenced by the existing workplace culture (prevailing norms, attitudes and standards of behaviour in a particular work environment). An example used by Kelly (and shown in Exhibit 3) vividly illustrates the strong impact of workplace culture on attendance behaviour. It compares the pre- and post-probationary period absence rates of a group of 73 new employees in a manufacturing plant. While absences remained predictably low during the probationary period, the rate then rose quite dramatically until it equaled the "normal" rate of the whole plant, at which point it stabilized. Exhibit 3 Absenteeism During Probationary and Post-

Probationary Periods, All New Hires (N=73)

(Annual Rates) Probationary Post-Probationary Period Period ________________________________________ Occurences/ employee 1.4 5.6 Days lost/employee 3.0 11.5 Lates/employee 0.8 5.2 Early departures/ employee 1.3 6.2 ________________________________________ Source: L.Kelly, IR Research Services. From this example, it appears that attendance is directly correlated with the attitude towards work in the workplace. In addition, Kelly notes, broad-based initiatives related to employee involvement and participation have been shown to result in a more positive general attitude to work. Planning the Corporate Approach According to experts such as Millman and Kelly, an action plan for minimizing absences and maximizing

attendance can be pursued by increasing employees' motivation to attend work, on the one hand, while removing the barriers to attendance, on the other. Various methods and tools can be useful in implementing a strategic action plan. The first step involves fact gathering and problem identification.


The Importance of Statistics Some critics claim that the mere act of monitoring employees' absences is an outdated policing activity, which does not belong in modern work environments. So why keep statistics at all? The answer is that absences can be indicators of workplace problems, and as the experts remind us, you can't manage what you can't measure. Over time, even the most carefully crafted policies and programs will become ineffective or redundant and need review and revamping. Information derived from attendance data can help identify an emerging or growing problem or the development of patterns that require further investigation. Appropriate reporting procedures, record keeping and record analysis can yield rich information from a minimum amount of data. But many organizations are unclear as to exactly what statistics should be kept, by whom, and how the data should be interpreted to be of maximum use in decision making. With respect to the types of statistics that are most important, occurrence and frequency data are key, according to Kelly, although he points out that surprisingly few organizations adequately keep this type of data. Millman adds that many companies don't understand that the global statistical "average" is misleading, because in most cases the high 20 per cent of absent workers are responsible for 50 per cent of all sick leave. Therefore, by focusing on the high 20 per cent of users, it is possible to manage and thus reduce the bulk of chronic short-term lost time. The Conference Board's Leadership Response Many Conference Board Associates expressed a need to be able to compare their absenteeism rates with those of others, using data that would be useful for monitoring absences and identifying areas needing special attention. Statistics Canada's absenteeism data are provided by individuals, primarily through the Labour Force Survey; there is no comparable source of employer-provided data. While most organizations record employee absences in some fashion, the resulting information lacks consistency, creating a hurdle for firms wanting to compare their rates with those of other organizations. To be useful, the data collected must provide decision makers with meaningful information. In response to employer needs, the Conference Board initiated the Absenteeism and Attendance Management Project. Project goals are twofold:

• to maintain a participant database of absence statistics, using standardized data that allow for

comparison of rates and patterns on a quarterly basis;

• through information-sharing forums and qualitative research, to examine effective strategies for improving attendance and promoting an attendance-oriented culture.

This research report forms part of the overall project. An advisory board, made up of representatives from large Canadian business organizations and outside experts in the statistics and policy research fields, provides ongoing guidance and support. Members of the advisory board are listed on the last page of this report, and their philosophy and thinking are reflected throughout the report. The Conference Board Absenteeism Model The Conference Board model was designed to focus on employee absences in and across three important dimensions: sickness, work-related injury and personal/family responsibility. The primary focus of the model was to emphasize short and longer term absences that are controllable or manageable. This led to adoption of the following general definition of "absenteeism": Absence (with or without pay) of an employee from work due to his/her own illness, disability, personal or family responsibility for a period of more than a half-day but less than 52 consecutive weeks. Personal or family responsibility includes: taking care of children or other family members, taking family member to doctor/dentist. (Not included are: maternity, adoptive and paternity leave; other prearranged leaves of absence; vacations and holidays; bereavement leave; jury duty; other non-controllable absences.) This definition formed the basis for a data-gathering model, which was pre-tested and fine-tuned with a select group of participating organizations. Commencing with the fourth quarter of 1991, statistical data on time available for work, work-time lost and absence occurrences for each of the three categories of absence are being collected from project participants on an ongoing quarterly basis. The model has incorporated some of the International Labour Organization (ILO) standards and philosophy on absenteeism. This means that aggregate results can be benchmarked with ILO and Statistics Canada data sources (with slight modification). In addition, the model has been designed to allow comparison across industries and geographic regions and has the flexibility to be expanded and/or customized to incorporate data gathering using other criteria, such as occupational grouping.


Inclusion of a third category of absence, personal/family responsibility, was crucial, given the changes in workforce composition. To a great extent, organizations still categorize absences as either sickness or injury. This might well mean that absence for family reasons is hidden under the sickness category. Indeed, many organizations are only now beginning to recognize that trying to juggle work with personal/family responsibilities is a fact of life for the majority of their employees. This makes it an important policy issue, which needs to be addressed through development and review of suitable options. IMPROVING ATTENDANCE Measuring, Monitoring and Co-ordinating According to survey respondents,7 an attendance-tracking system, especially when linked with payroll and a human resource information system (HRIS), can be very useful in spotting absence patterns and trends and identifying problem individuals. In several surveyed organizations, a formalized tracking system has been implemented. In one organization, individual employee attendance is compared with that of others in the department, while built-in report generation provides for corporate monitoring of overall attendance across departments. Often, built-in triggers are used to alert managers to when and whether personal follow-up with absent employees is needed, and easily accessible, up-to-date data are available for costing purposes. Automated attendance records, which are commonly generated on a bimonthly basis, give managers the up-to-date information needed for making better informed decisions. The control and monitoring of sickness absences was singled out by a number of respondents as a key issue. In fact, one surveyed organization reported changing from coverage provided by an insurance carrier to self-administered short-term coverage in order to better control and monitor this situation. Having a strict follow-up system for accidents and illnesses is a good method of keeping the lost work time rate down, according to several respondents. One small western financial organization measures casual sick leave on a unit, division and corporate-wide basis. When a unit's quarterly results are found to be above division and corporate totals, explanations are requested. "We have found that just being aware keeps ratios and usage in check," noted the survey representative from this firm. Comments offered by respondents reflected the need for a comprehensive, co-ordinated approach. In many

cases separate units (e.g., occupational health, payroll, benefits) focus only on their specific mandates and responsibilities. Respondents remarked that "ideally they would be co-ordinated by one individual", highlighting the fact that a central co-ordinating mechanism should exist to ensure that valuable information is exchanged and good decisions are made. A similar comment spoke of the need to have people who can and will take on responsibility: "Management turnover results in people not knowing what the processes are and too many people handling claims (e.g., workmen's compensation, long-term disability, and short-term disability or STD). The net result is lack of ownership." Recognition, Bonuses, and Incentive Awards Experts contend that recognition and incentives can be a good "quick fix" to a problem by helping improve attendance behaviour and possibly motivation and attitudes. They do not, however, address the root causes of poor attendance. Among participating survey organizations, the use of recognition awards or absenteeism reduction programs has produced mixed results. Many of the organizations recognize or reward good attendance. One introduced a corporate-wide perfect attendance award, wherein all employees meeting the criteria receive a $50 gift certificate and a framed certificate showing the period of perfect attendance. Similarly, under a program introduced by a mining organization, underground mining crews that work a minimum number of months without lost-time accidents (or compensable injuries on the job) receive a gift voucher. In Year 1 the value ranged between $15 and $20 a month, while in Year 2 the monthly value was $20 to $25. Results of some programs have been positive. In one respondent company, the absenteeism rate was reduced from 13 per cent to 7 per cent over the initial eight-month period of a pilot gain-sharing project. An attendance bonus program proved successful in an Ontario-based chemical products company. In an attempt to deal with an absenteeism problem among its 800-plus unionized employees, this company negotiated a contract change that lengthened the number of wait days for sickness pay and provided for an attendance bonus of $100 per quarter for absence of 12 hours or less. In the first year after introduction, absenteeism was reduced by nearly 30 per cent. In the opinion of many experts, attendance awards are usually looked on favorably by employees, and the positive impact on attendance can be impressive.


A sense of unfairness may exist among employees, however, when eligibility for rewards is determined at the departmental level and there is inconsistency among departments. As well, not all bonus programs are considered successful. In one responding company, a program that had provided for an hourly bonus of 25¢ for each absence-free month to discourage casual absence of hourly employees was discontinued after two years. It was replaced by a progressive discipline approach, which was found to be more effective in curbing absenteeism. The anticipated impact from implementation of a given program may simply not materialize. A survey respondent from a 1,700-employee company in the finance and trust sector that had introduced a perfect attendance program commented, "We felt such a program would provide an incentive to employees to make an additional effort and report to work. But our overall impression is that it has only served to focus management's attention on the whole issue of unnecessary productivity losses." Sick Leave: A Major Policy Issue The problem of handling medical and health abusers was a top priority for many survey respondents. With respect to sick leave policies, two major elements have the potential to foster misuse and abuse by employees: 1) the nature of the policy itself and 2) the manner in which it is monitored and communicated. The plan itself might foster attitudes conducive to abuse if it is viewed as an entitlement. This situation was reported by one organization: "Many people make a point of using up their full sickness benefit of 10 days per year, even when they obviously are not sick." However, the opposite might occur if employees view the plan as insurance. As another respondent pointed out, "Absenteeism declined after we replaced our sick leave accumulation plan with an insured short term disability plan." Several respondents hope that recently implemented or planned changes to their sick leave policy/practice will reduce absences. Several examples were given. One organization has introduced changes to provisions governing sick leave pay, which will now be based on usage by the entire employee group. Under the new rules, if overall sick leave usage decreases, then the number of absence occurrences paid at 100 per cent increases (and vice versa). In another organization, a newly negotiated clause in the collective agreement with unionized office workers allows for partial reimbursement of sick leave benefits (based on number of years of seniority) if employment is terminated

because of personnel reduction or technological change. This has resulted in a decline in absenteeism. Another respondent commented that "with our unionized employees, the fact that their sick bank is paid to them if they don't use the days has reduced absenteeism". But paying people for not using sick days is not always effective. Under the provisions of another organization's program, employees who did not use their sick leave entitlement were eligible to receive $250 at year-end. However, the program was discontinued after one year due to two problems: 1) it encouraged sick employees to come to work, with the result that they were not productive and infected others, and 2) some supervisors assisted absent employees by altering time sheets so that sick leave was not affected. A multi-pronged approach to curtailing abuse proved successful in one organization and resulted in a 20 per cent decline in sick leave. Measures used consisted of: 1) increased efforts by management to control absenteeism through monthly sick leave reports for each department and internal attendance management training courses; 2) increased utilization of health unit services; 3) introduction of a flexible hours work concept; and 4) third-party health assessments. The Health and Safety Problem Effective selection criteria, emphasis on preventive programs, and modified work programs can contribute to a reduction in sick leave or job-related injury. Several practical examples were given by survey respondents. One organization uses a job related "physical demands" checklist during the interview process to eliminate people with pre-existing conditions that will make them unable to meet the physical requirements of the job. A food and beverage industry company with an absenteeism problem due to accidents/injury instituted a simple change in its call-in procedure. Employees must now speak directly to supervisory staff for a brief interview if time is to be missed. This has had positive results. Survey feedback also showed a growing emphasis on prevention programs in the area of health and safety. One respondent remarked that frequency and severity rates of lost-time accidents were the main causes of absenteeism problems in his organization. To reduce these rates, the International Safety Rating Program was implemented in 1990, and improvements are now evident.8


Modified work and return-to-work programs were frequently cited as forms of active rehabilitation to help workers return to work, although not to their old jobs. But according to one respondent, whose organization had introduced a modified duty program to provide work that would meet doctors' specifications during a period of recovery, "this has met with muted success, due to many doctors' reluctance to communicate with employers". Workplace Wellness Wellness programs are increasingly regarded as an effective tool for preventing absenteeism, particularly in stressful work environments. Using the rationale that a physically fit employee is less likely to be sick, a number of those surveyed felt that their wellness programs had a positive effect on attendance. Typically, an organization's wellness program gives employees information on achieving more healthful lifestyles, provides financial assistance to offset part of the costs of belonging to a fitness club, and may include an employee assistance program. EAPs are sometimes expanded to include family members, and one respondent specifically mentioned using an EAP to focus on excessive, chronic cases of absenteeism. One responding organization, Alberta Blue Cross, can claim some success with its program. Included under the organization's workplace wellness umbrella are an EAP, seminars on specific issues and an emphasis on fitness. Lunch-hour seminar topics include "laughter prescription", parenting, managing change, and massage therapy. The practice of taking fit breaks (stretch breaks) has been incorporated in some departments. Partial reimbursement of fees for fitness-related activities was introduced as a way to encourage employees to take up the lifestyle improvement challenge. As a percentage of the total administrative budget, the wellness program budget is small, but the benefits are large. Absence results among the 500 employees following the introduction of the program showed a drop in average days lost from 5.5 in 1990 to 4.1 in 1991.9 In some organizations, the primary purpose of a wellness program is to save money in benefit costs, which can then be spent on salaries and additional benefits. A municipality in the southern United States introduced such a program for its 14,000 employees and claims it as a testimonial to the positive results that are achievable. Absenteeism is lower, three times as many employees have half the actual number of on-the job accidents, and wellness participants have fewer workers' compensation claims than non-participants.10

Other firms are using empowerment strategies to promote wellness. The wellness efforts of one U.S. food manufacturer were spawned by that company's aspiration to apply for the Malcolm Baldrige National Quality Award. When surveys revealed that employees placed a value on wellness, a Perfect Health Program aimed at creating a culture in which employees want to take care of their own health and well-being was developed. The organization believes that individual health and well-being are linked inextricably with the quality of its products. To date, measurement of success has been through monitoring of employee attitudes, which have improved dramatically.11 Flexible Work Arrangements The impact of work-family issues on attendance behaviour was identified by respondents as a key area of concern. Commonly, initiatives being considered involve some form of flexible time-off policy that would permit family emergencies to be more easily handled by employees. Several respondents gave examples of alternative work arrangements that have actually been put in place, noting their generally positive impact on attendance. Typical was one respondent's remark that the office employees' response to the introduction of flexible work hours had been "exceptional" and that both lateness and absenteeism had been reduced. In another organization, results of an employee survey highlighted the need for review of the existing rigid working hours policy. The needs of laboratory bound technical employees, for instance, differed from those of staff who traveled extensively. Similarly, clerical employees had needs that differed from those of the management group. The concept of flexible hours was introduced and two options offered: an extended workweek; or core hours on a regular daily basis, with a flexible component. Productivity and employee satisfaction improved as employees were given more control over their own work time. For these organizations, the "one-size-fits all" approach made little sense, highlighting the need to recognize and adapt to a range of different needs. Teamwork and Job Satisfaction One survey respondent commented that "our team-oriented method of production requires full attendance by team members" and that peer pressure on team members had a positive effect on their attendance. In fact, identification of solutions to absenteeism problems in organizations with a "continuous improvement" culture are often assigned to a task team. For example, the mandate given to an employee task


group at a southern Ontario food products manufacturer was to "identify the price of non-conformance". The group identified four categories of absenteeism that needed addressing and came up with 27 recommendations for improvement, many of which were implemented. In the opinion of one respondent, "the majority of absenteeism is caused by employee lack of job satisfaction". Two positive initiatives mentioned as being successful in addressing this problem were job redesign, with an emphasis on task variety, and a better matching of jobs and employees. Communicating the Value of Attendance The need for a clear, comprehensive policy on attendance was highlighted by many respondents. One noted that his organization needed a clearer definition of absence/attendance standards, as neither employees nor managers were certain about what was considered acceptable attendance. A common sentiment was summed up by one comment: "As an organization we don't place a value on attendance." Respondents felt it important to have a communications program that stressed the importance of being at work when scheduled to be there. But they cautioned that such a program would be successful only if it had senior management interest and a commitment to promote that message. "We are striving to become a 'total quality organization', and to do so each person must improve and change attitudes towards his/her work—one of which is attendance," states one survey comment. For companies such as the one this respondent represents, better communication regarding the importance of good attendance could produce substantial benefits. Labour-Management Relations Communication between labour and management was a key factor in improving attendance for a national association. Several years ago, the challenges of globalization and competitiveness prompted a campaign to become more customer-driven. Such a move involved a shift in culture and behaviour. Open and ongoing communication between management and the association's 500-person clerical union quickly became recognized as a critical and important vehicle for change. Currently, labour-management relations continue to be excellent, and a union and management group meets on a regular monthly basis. Within this forum, the union can raise any issue it wishes to discuss; the only ground rule is that discussion will not include an individual grievance problem.

Education and Training: Role of Management The commonly heard complaint that it is hard to get front-line supervisors to take responsibility for dealing with abusers highlights the importance of management training and education. Methods frequently cited as being essential to good attendance management include absenteeism management courses, formal guidelines and policies, and handbooks for supervisors and employees. One respondent noted that his organization had compiled a guide on problem resolution for managers, commenting that a reduction in absenteeism had been noticed since the introduction of the guide. Combined Approaches Usually, a combination of initiatives aimed at attendance improvement is used. In a 900-employee Quebec-based manufacturing company, a formal computerized attendance-tracking system with built-in report generation was introduced. At the same time, training of supervisors and management was accelerated, and an employee assistance program was introduced. The organization's survey representative reported that, as a result of these combined efforts, "the absenteeism rate was cut in half in less than a year, from 8 per cent to 4 per cent, and has remained at that level for more than three years". A composite of remarks from respondent feedback suggests that the following are the key characteristics of good attendance management. Exhibit 4 Characteristics of Good Attendance Management 1. Management commitment 2. A good measurement system 3. Education of supervisors and managers

regarding attendance 4. An attendance management guide for managers 5. Improved documentation of situations, written

warnings 6. Absenteeism record reflected in performance

review when warranted 7. Discussion with unions 8. Enhanced follow-up administration with workers' compensation boards and medical

professionals 9. Development of a modified and light duties job

program for "reasonable accommodation" 10. Regular rehabilitation visits with occupational

health nurses


11. A positive communication program that emphasizes the importance of being at work when scheduled, with senior management commitment and promotion of this message

________________________________________ Source: The Conference Board of Canada.

Case Study I—Bell Canada: Focus on Management Education and Training Background Bell Canada is a unionized company operating with 32,000 employees in Ontario and 22,000 employees in Quebec. To realize its mission, which is to be a world leader company, it is committed to achieving a culture of competence. To this end, it has identified four required values: customer satisfaction, financial strengths, excellence and team spirit.


Exhibit 5 Employee Commitment: Interaction Model Job satisfaction Personal motives attendance Inability decision to attend Cosequences __________________________________________________________________________________________ Source: BellCanada In 1989 the Attendance Improvement Program was introduced. This is a distinct process, separate from but integrated with all other strategies for achieving competence. According to L.F. (Lloyd) Beckley, formerly Associate Director, Health Department of the Ontario Region of Bell Canada, the program ties in with the corporation's total quality management thrust.12 At Bell, the employee development group provides structured training in team building; the Attendance Improvement Program works on the principle that the leader of the team is responsible for building a culture of excellence and total quality through self-motivated commitment from all team members. Attendance Management: Both an Art and a Science The Attendance Improvement Program is an approach to management education aimed at first-line supervisors. Elements of the program include seminar participation by managers and a comprehensive reference handbook. A variety of vehicles are used to communicate the "be there, we need you, you're a valuable member of the team" message to employees. Of particular note is a series of videos designed to encourage managers to make attendance issues part of regular staff meetings. Worthy of particular mention are four "commercials" (one of which is an award-winner) that have been produced for viewing by employees. Each carries a different motivational message in a highly effective manner. Beckley's seminars are structured to look at attendance management and improvement as both an art and a science. The "art" component (soft side) offers managers insight into how to gain employee commitment to attendance while helping them to understand the factors that contribute to absence (as shown in Exhibit 5). Emphasis is placed on the fact that even when employees are physically present, the spillover effect from problems in other areas may lead to a less-than desirable level of "mental attendance".

The "science" (hard side) is information-based and focuses on the departmental support available and on attendance management administration. Attendance is part of the performance appraisal process at Bell, as in many organizations, and key statistics are captured via the Systematic Absence Reporting (SAR) system. Bell recognizes that a culture of competence is supported in no small measure by excellence in employee attendance. A strength of Beckley's seminars is the way they make a case for the double bottom line (people and profits). The "iceberg principle", a phrase coined by a Bell Canada physician, states that "absence is just the tip of an iceberg", and since the program was introduced, Beckley reports, the integration of the attendance program with all other quality strategies has resulted in progressive improvement in employee attendance. Case Study II—B.C. Telephone Company: Focus on Health Promotion Background Nearly 14,000 persons are employed by B.C. Tel, most of them unionized. As is characteristic of the industry, massive technological change has had a dramatic impact on the organization and its employees. New technological knowledge and skills development, significant retraining of employees with redundant skills, and programs to assist older workers have been part of a strategic thrust aimed at positioning the organization to compete in the global marketplace. Promoting Attendance Improvement Don Champion, Vice-President, Human Resource Development, believes there is a direct correlation between the climate in which people work and their attendance. "People either enjoy being at work or they


find alternatives to work, by staying home or by staying away from the kinds of things they don't like at work."

B.C. Tel's Attendance Management Program consists of a statistical reporting system, supervisory training and workshops, and an attendance recognition program. Clear guidelines and a new report format have helped remedy the situation that previously existed where supervisors received data and information they either did not understand or did not know how to apply. Recognition of excellent attendance is handled in a low-key manner through a corporate award program, which provides employees with non-monetary personal acknowledgment. A significant improvement in attendance was noted during a five-year trial period, and this award program is now a permanent feature. In Champion's opinion, an approach t hat promotes employee health and wellness can show a positive correlation with attendance improvement. B.C. Tel chose to use an incremental approach, with, for example, the initial "participation" program later developing into a fitness program. Success was measured by the number of participants and results of a follow-up employee survey. Results showed that employees felt refreshed by fitness and exercise. Their social lives improved, decreased stress enhanced their ability to work, and they had more fun during the workday. Employee Assistance Program Problem prevention is seen at B.C. Tel as preferable to problem correction. The search for new ideas and solutions from this perspective led to acceleration of the employee assistance program, because it was believed that an employee who was stressed for any reason, be it domestic or work-related, would not be maximizing his/her contribution. Operating under the philosophy that "the company doesn't pay employees to get sick", the company's EAP and the member assistance program (MAP) of the Telecommunications Workers Union (TWU) provide counselling and referral services for employees and families on a 24-hour-a-day, 365-day-a-year basis. As is the case at many workplaces in the early 1990s, stress related to organizational change is a problematic issue. According to Douglas Hockley, Manager, Employee Assistance Program, overwork and workaholic behaviour can create problems, and it is important that employees be empowered to take responsibility for their own situations. This includes learning to cope with unreasonable demands by facing up to and making decisions regarding the company-employee relationship. For example, performance appraisal time should be a mutual setting of objectives, not a one-way assignment of tasks and responsibilities.


Off-site EAP facilities provide immediate assistance to the mainstream employee population. Anonymity is ensured to all EAP clients, and confidentiality is guaranteed for self-referrals. Only aggregate statistical information on the nature and number of cases is disclosed to the company and union executive. But Hockley believes that in the case of employees with chronic incidental absences, confidentiality requirements should be relaxed and communication across departments accelerated. Such an approach would require case-conferencing with other human resources departments, since chronic offenders often transfer and know how to "work the system". B.C. Tel's EAP group has a number of communication vehicles designed to help employees by raising awareness of specific issues, providing information, and contributing to education. Each issue of Health Works, a quarterly publication on health promotion with 4,500 subscribers, has a theme and focus that heavily reflect customer input. For instance, the Summer 1991 issue was on coping with organizational change.13 Videotapes are used as an educational tool and are particularly well-received, as they can be borrowed by anyone in the company. Experts are brought in to make short presentations on particular topics (substance abuse, financial planning, family relationships), and employees are invited to attend and ask questions. Sessions are held in the company's auditorium and are a highly effective, low-cost, low-time-involvement means of educating employees on a variety of matters. Future Focus: The Human Factor The human factor will probably receive increasing attention at B.C. Tel. A small department has been created and charged with raising awareness of human factors issues in new and existing areas. The group will be involved in the front-end phase of systems planning and will provide a dimension of professional observation to various initiatives, such as off-site work and flexible working arrangements. Don Champion hopes that incorporating a human factors component into the early planning/design stages, along with ongoing joint labour-management committee discussion regarding human factor issues, will ultimately lead to greater benefits resulting from the introduction of new technology. Case Study III—Syncrude Canada: A Multifaceted Business Approach to Corporate Wellness Background

Syncrude operates at two locations near Fort McMurray, Alberta, and employs approximately 4,400 people. About half are in operations/trades jobs (which involve outdoor work and use of heavy equipment); the rest are in administrative, professional and technical positions. The workforce is largely male-dominated (84 per cent) and is non-unionized. Work is organized on an employee-designed plan, consisting of a 28-day cycle of 12-hour shifts with seven consecutive days off during that period. Corporate Mission and Strategy Syncrude's multifaceted approach to corporate wellness flows directly from its corporate mission, which is "to secure Canada's energy future". For Syncrude, this means having safe and reliable plant and equipment and healthy, productive employees. As Dr. Ken Nickerson, Chief Medical Officer, explains, "It is important that all employees understand what the organization is in business for (which is to be productive and profitable) and the role they are to play to make that possible. Syncrude strives to provide the best work environment possible, with good job and safety procedures. The employee's responsibility is to come to work and be fit and healthy and productive." Participative Redesign Process Syncrude has been undergoing a major redesign process, which will result in more effective and efficient ways of doing business. During this comprehensive participative exercise, the human resources (HR) group was trained in the principles of redesign and put through an exercise called "Starship", which helped make the theory behind the process come alive. The result has been a decentralization of many traditional HR functions and identification of four HR client groups. A core, or central, HR group will also have a "shadow organization", which assumes responsibility for policy development and co-ordination within each client-based group. Over time, people with occupational health expertise will form an integral part of all business development groups. The principles of redesign are being fine-tuned. This means that Syncrude is looking at whole jobs, whole tasks, employee participation and self-managed teams. A socio-technical approach is being used in the utilities section, with some of the same principles applied. Corporate Health and Wellness Program The impetus for Syncrude's current approach was a major review that took place in 1989-1990. Information was gathered, collated and analyzed, resulting in a complete overview of "non-working employees" at Syncrude. Under the broad title of "performance and workforce management", such employees were divided into three categories: 1) those who, because of absenteeism, were less productive; 2)


normal medical cases; and 3) the rehabilitation group (most were medically disabled, but a few were "playing games"). According to Phil Lachambre, formerly Vice-President, Human Resources, and now Vice-President, Business and Corporate Affairs, when these three categories were examined together, the sheer magnitude of their combined size surprised Syncrude management. It was estimated that if even 10 per cent of those employees could be more productive or brought back into the workforce full time, major gains in productivity would be achieved.

Focus on Prevention The focus of attendance monitoring at Syncrude has been moved into the area of prevention by identifying and assessing potential health problems at an early stage before they become chronic and result in excessive absenteeism. Absence tracking is therefore based primarily on illness occasions, rather than total days missed from work. While absence rates are still used for corporate statistics, occurrences give data on individual patterns. A predetermined number of occurrences triggers discussion with the supervisor. In addition to regular attendance management reports, Syncrude's program has two main components: a quarterly stewardship report and a health and wellness steering committee. Tracking and Stewardship As Lachambre points out, a way to steward and track more than just the traditional absence statistics was needed. Attendance management information alone did not give department heads a complete picture, and Syncrude has moved away from rankings and forced distributions (which traditionally meant that 5 per cent of employees would automatically be considered poor performers). Syncrude's stewardship document tracks some statistics, such as attendance, performance management issues (the number and nature of work-performance cases being worked with), disability and rehabilitation cases (subset of attendance numbers) and the number of employees on STD, on LTD, ready for return to the workforce, in place, or who have left the company. The quarterly document is a valuable tool for helping managers to track trends and focus on where they might be developing. The rationale is that much valuable information can be gleaned from statistics on people in corrective action programs. For instance, monitoring the extremes (too many or none) could reveal potential problems. The HR client group staff constructs a "snapshot" by going to managers and talking to them about their employees. According to Os Huebner, General Manager, Human Resources, "It is a challenging role for HR representatives, because their main job is to help employees, and this is the flip side of the coin." They are trying to help managers address their employees' performance before problems arise. Health and Wellness Committee The health and wellness committee, with wide representation from all areas, was formed in response to the need for a more consistent, co-ordinated approach, a clearer focus and greater community involvement.


Because Syncrude has a wide variety of jobs and degrees of risk in those jobs, all areas have safe operating committees. Safety and reliability come first, and Syncrude's continuing safety improvement efforts have resulted in a drop in the injury frequency rate from 5.1 in 1983 to 0.77 in 1991 (with a corresponding decrease in Workers' Compensation Board assessments). Five years ago, nurses were empowered to start conducting health hazard assessments, with the result that a health hazard history now forms part of every employee's medical record. Syncrude's loss management program reflects the organization's philosophy that off-job health and wellness cannot be separated from on-the job activities and is geared to promoting a disciplined approach to health and wellness off the job (lifestyle, injury, etc.). In an attempt to gather additional key information in this area, employees will be asked to self-report anonymously on their return to work. Information Systems Payroll and human resources use a single system for common data elements, including anything related to attendance. It is linked with the organization's human resource information system, and Syncrude is now in the final stages of putting user-friendly applications onto local area network (LAN) systems throughout the company. Eventually there will be one common database for everyone. Prevention, Treatment and Rehabilitation: Major Medical Issues With respect to illness, Syncrude's philosophy is to recognize that once or twice a year a person will become ill but that any person with an absence in excess of five days needs to see a doctor. Triggers have been inserted into the computerized payroll system to flag employee absences of 20 days. As Ruth Anstruther, Advisor, Occupational Health, points out, this is to ensure that rehabilitation coordinators make the appropriate contact and follow-up before short-term disability benefits cease, in order to assist in an early return to work. Syncrude has a comprehensive approach to rehabilitation, from the first sign of absenteeism through to retraining, outplacement, termination or LTD. Part of Syncrude's organizational effectiveness approach to corporate health and wellness includes trying to make the workplace a better place for the people who work there. Employees with work-performance problems other than attendance (not meeting objectives, difficulties interfacing with people, etc.) are put into a corrective action program to improve behaviour. This program is handled by the employee relations staff. Syncrude has found that

stress-related employee problems resulting from work overload or a demanding supervisor can often be handled by the organization. Impact of Gain-sharing In early 1991, Syncrude introduced a corporate gain-sharing program with an attendance component. All employees are eligible; however, an employee with four or more absence occurrences in a quarter is not entitled to participate or receive an award. Its effect on attendance has been impressive. In the second quarter of 1990 (prior to introduction of the program), there were approximately 600 absence occurrences. At the end of 1992, this number had dropped to 125. The significant drop in number of occurrences was accompanied by a 27 per cent decrease in frequency of absences over the same period. As Os Huebner cautions, it should be emphasized that the gain-sharing program is but one plank in a platform designed to encourage employee involvement, participation and productivity, and its positive effect on attendance should not be viewed in isolation. A Holistic Approach Syncrude wants to change both the workplace and employees' health in order to be as productive as possible. To do this, a philosophy of corporate health and wellness is being pursued as a strategic approach that will have long-term payoffs. According to Dr. Nickerson, health and wellness must be approached holistically, not be confined to the workplace, and should involve outreach programs with the community. In Syncrude's case, for example, one survey showed that 85 per cent of employee illness absences were caused by off-the job problems. Hence, off-job safety is now being monitored under Syncrude's loss management program. In addition to a participative culture and an emphasis on health promotion and illness/accident prevention, this philosophy is reflected through the daily behaviour of Syncrude's senior management team, who feel it is important to set a good example. For instance, in contrast to what is often thought of as normal executive lunch practice, Syncrude executives often incorporate a small but nutritious meal and exercise period into their day. Although simple in nature, this type of visible activity is important. It not only shows that the executive team "walks the talk", but sends strong signals to employees as to what kind of behaviour is expected and encouraged on a corporate-wide basis.


SUMMARY AND CONCLUSION Changes in the business environment will continue to exert economic pressure on Canadian firms. The globalization of the world economy will in all likelihood accelerate, bringing with it increasing competition, volatility and instability. Increased productivity will be a key strategic imperative for success and survival in this environment. A recent large-scale 12-country study examining perceptions of the business environment for human resource management to the year 2000 identified productivity/quality as the highest-ranking priority. Productivity increase is all the more critical in Canada, because Canada ranked poorly among the 24 OECD countries for productivity growth between 1961 and 1990.14 Employee absenteeism is directly linked to productivity, so the importance of promoting improved attendance is self-evident. Reduction in overall absenteeism will require a concerted effort among management, labour, governments and the medical profession. However, management still holds the key to effective attendance management, which will require commitment and action in the following four areas:

• support from senior management; • a clear policy describing attendance management

in a positive, constructive and non-disciplinary manner, based on input from all stakeholders;

• an information system that provides timely and meaningful statistics; and

• confidence and skill training and development of all management and supervisory staff.

Such a four-pronged effort can often produce immediate results, without large dollar expenditures or massive changes to structure or process. The collection of relevant absenteeism data is critical for effective attendance management initiatives. Latest developments in software are eliminating the limitations inherent in the traditional manual recording systems. The availability of state-of-the-art technology should allow organizations to generate data that will allow them to take the necessary measures to reduce absenteeism. Calendar/spreadsheet software can be used for monitoring, reporting and costing absences. According to many experts and survey participants who contributed to this research, effective communication with employees and the medical community should be undertaken by the top hierarchy of organizations. Information shared with employees on a regular basis regarding the impact of absenteeism on productivity, competitiveness and the survival of the firm will be a strong factor in encouraging attendance. Michael Millman contends that there is a

need to better communicate to physicians that prognosis, not control is the purpose behind an organization's request that they sign papers authorizing employees to be absent from


work. Enhanced communication between management and the medical community should allow both stakeholders to achieve a common goal: to return employees to better health and increased productivity. A reassessment of traditional work schedules by management may also improve attendance. The changing composition of the workforce, coupled with changing societal expectations vis-a-vis work, is compelling many organizations to introduce various degrees of flexibility in working hours. Firms' sensitivity to employee needs concerning their work and family responsibilities may also lead to improved overall attendance. Insertion of an attendance improvement thrust within the broader issue of corporate health and wellness programs of organizations is also recommended by participants. Finally, management can help build a working environment in which employees can maximize their potential through increased responsibility, challenging work assignments, feedback and opportunities for growth. This will require a major shift in management style. Many organizations are undertaking development initiatives, often in conjunction with quality improvement strategies, to help traditional managers become coaches and mentors. This in itself will generate a work climate where employees feel valued, which in turn is likely to lead to improved attendance. Without question, the benefits derived from creating an attendance-oriented corporate culture are many: cost savings, increased productivity, improved employee morale and, in the longer term, a healthier workplace.

ATTENDANCE MANAGEMENT TEAM Advisory Board Members Dr. Gilles Mathieu Regional Medical Director Bell Canada Robert Hughes Manager, Attendance Management Canada Post Corporation Sandy Shand Consultant, Employee Relations Policy Human Resources Division Canadian Imperial Bank of Commerce Yvon Lachapelle Manager, Personnel Development and Staffing Canadian Pacific Forest Products Limited Martin Gregoire Manager, Compensation Export Development Corporation Laurence Kelly President IR Research Services


David Hindley Manager, Industrial Relations Molson Breweries Ernest Akyeampong Chief, Labour Force Activity Section Labour & Household Surveys Analysis Division Statistics Canada Conference Board Staff Project Leader Patricia Booth

Senior Research Associate Database Co-ordinator David Shepherdson Senior Research Associate Information Specialist Laurie McCarthy Acting Manager Information Services Adviser Prem Benimadhu Director Compensation Research Centre

1 Ernest B. Akyeampong, "Absenteeism at Work", in Canadian Social Trends, No. 25, Summer 1992. 2 The Globe and Mail, January 3, 1992, p. A3. 3 Reported in IBIS Review, October 1991. 4 Canadian Business, February 1993, p. 19. 5 In fact, the average employer contribution rate for 1993 was increased by 10 percent. 6 HR Repoter, June 18, 1992. 7 An optional section in the compensation planning survey referred to earlier asked respondents to describe and

comment on "initiatives that had been (or were in the process of being) introduced to improve absenteeism". Feedback and comments from survey respondents appear throughout this section.

8 A program for reducing accident frequency, compensation costs and property damage, the International Safety Rating System is a comprehensive audit based on the safety program standards of organizational leaders and including 20 common program elements. Ten levels of "star ratings" recognize achievements.

9 Average days lost rose to 5.26 in 1992. According to a company spokesperson, the increase might be linked to policy changes, which included extending eligibility for "earned days off" to all employees and introducing three "family care days" per year.

10 Case study reported in Personnel Journal, February 1992. 11 Ibid. 12 Mr. Beckley retired from Bell Canada in early 1993. 13 Thoughtful commentaries written by Hockley, the Health Works publisher, on "Workplace Absenteeism" and

"Workplace Equilibrium" at B.C. Tel appear in the June 1992 issue. 14 Organization for Economic Cooperation and Development, 1991/1992 OECD Economic Surveys: Canada.

Employee Absenteeism

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