Garvey Resources, Inc. -

September 15, 2004

Spotlight on Savings

Absenteeism is a Given

You can save money by reducing employee absenteeism.

Elizabeth Nelson, plant manager, listens intently while the Board president outlines his concerns:Over the last 4 years absenteeism is trending upward at an alarming rate! According to survey information, the cost for absenteeism for each employee is close to $800. This doesnt include their benefits or all the hidden costs like overtime to cover their assigned work. We also learned that the industry average is 6.2 days of sick time per employee. If we look at your plant average, 12.7 days per employee, it doesnt take a genius to figure out that we have a problem. Elizabeth, we expect you to develop policies and a program to deal with this absenteeism issue. Meeting adjourned.

Back at the plant, Elizabeth spends several hours creating a somewhat novel plan. The basic plan is to identify a researcher at the plant who can delve into this problem - someone who has O and M experience, has research capability, and most importantly knows firsthand the art of sick leave abuse.

The next day, at the plant, Neva Thair is sitting in the Elizabeths outer office. She was instructed to report here for an important meeting. Neva Thair is a bright, experienced operator with the worlds worst attendance record.

Elizabeth asks Neva to join her in her office and gets right to the point.

Neva, last night the Board gave me a problem to solve. Our absenteeism rate is high and going higher. The Board has asked me develop a program including a policy to deal with this problem.

I have selected you to lead the research effort on this problem because you have the worst attendance record of all employees. You therefore have an excellent firsthand knowledge of the causes for absenteeism. You live it almost every day!

Let me explain your mission. Learn what others are doing, use the Internet, network with others in our industry, and find other similar industries and research their techniques. Provide me with enough material so I can assemble a policy and a program that addresses absenteeism.

Neva quickly absorbs the assignment and asks only one question.

You know I have limited time, what with all my illnesses and all, so how will I fit this into my schedule?

This assignment takes precedence. I want weekly reports on your progress. You also will be involved in helping me develop periodic Board reports.

Despite several absences, Neva develops material and works with the team to craft an absenteeism policy.

Elizabeth provides an executive summary to the Board for her first monthly report.

Absenteeism Policy

Executive Summary

The attached policy was developed from the review of comparable municipalities and private industries. The policy contains sections on:

Normal work schedule
Excused/unexcused
Patterns

Holidays
Weekends
Shift changes

Call-in procedures
Expectations during severe weather
Disciplinary steps

It is requested that the Board review and approve the policy so that it may be implemented.

-Elizabeth Nelson

About a week later Elizabeth receives a letter from the president indicating the Board had approved the policy but has postponed implementation until other program elements such as incentives and awards are created.

Neva Thair divined the Boards action and was already deep into the research when Elizabeth showed her the letter. Within 10 working days and two unexplained absences, Neva requested a meeting to detail her research.

Elizabeth, from my research I developed a list of the most popular incentives and awards.

Absenteeism

Incentives and Awards

Monthly Lottery
Annual Awards Dinner
Awards

Programs allowing accumulation and partial payment

Prepared by Neva Thair

Neva, this is a good list. What do you mean by ?monthly incentives?

Ms. Nelson, the central concept in all these incentives/awards is recognition. People love to be recognized and accepted. The difficulty is that if the award is too far separated from the good behavior or if the goal seems unachievable, many will opt not to participate. The monthly lottery is the closest thing to instant gratification. Each employee who has a perfect record for the month gets a ticket for a lottery. The prize is small, under $50. Usually the lottery is held with all ticket holders at a pizza lunch. Good attendance allows the employee to attend the pizza lunch, be part of a group, and perhaps win a prize. Some places actually award bonus tickets for consecutive months. This increases the employees chances of wining.

Neva, very good. Lets work on a Board report.

One week after the Board presentation, Elizabeth is instructed to implement the policy and an incentive program. The Board selected the monthly lottery and the annual awards ceremony options.

One year passes quickly, and the program is well received. On a personal note Neva marries Freddie Abcent a plant mechanic, and they are very happy. The Board calls a special meeting to honor employees with good attendance. Attending the meeting are honored employees including Neva Abcent.

The Board president publicly acknowledges the employees and then presents two special awards.Elizabeth Nelson receives a commendation for decreasing absenteeism from 12.7 to 5.8 days per employee, and Neva Abcent receives the most improved attendance award!

Next time we will cover Succession Planning.

Call Today 215.362.4444