Six Sigma – iSixSigma Forums Old Forums General REDUCING ABSENTEEISM BY USING INCENTIVES

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    Cordell Fife

    Have any of your companies decided on incentive programmes to reduce absenteeism, as a potential solution for the problem? – if so what type of incentives have you decided on? – my project is based in a manufacturing environment with staff working 8 to 12 hour shifts
    Thank you


    Nitin Sahni

    Kim – If you work with predecided solutions for a problem, then in my opinion these can not be termed as six sigma projects – more of an implementation issue.
    When you say absenteeism, I hope you mean unscheduled leaves taken by emplyees. Although companies offer leaves to employees on annual basis ( in India employees are generally entitled to annual holidays of 30 ~ 45 days a month), however unscheduled absenteeism puts processes under jeopardy.
    The solution to this is to ask people to plan out their leaves well in advance (a month would be appropriate initially). Your management may put incentive (~ 5% of monthly salary) on this (no unscheds during the month) and it should work well intially. Subsequently you may need to include this unsched data in employee appraisal assign suitable weightage to the same. This would help the scheme to sustain itself in the long run, once novely of incentives dies down (say 8~ 12 months after initial roll-out).
    Hope this helps…
    Nitin Sahni



    I dont see rewarding attendance as a fundamental solution, although it may help to reduce the number in the short term.
    Is your project following DMAIC methodology? if so, have you collected data for root cause analysis from for example; return to work interviews, employee satisfaction surveys, focus groups.
    Some points to consider if you start an incentive scheme;

    If you reward an employee for taking less than five days off in a year, does that mean that you are sanctioning the other four days.
    The cost [£] could outweight the benefits if you haven’t removed the causes for absence.
    In my opinion you should look at;

    Collect data and establish measures, for example absence rate & spread
    Use ANOVA to establish patterns and trends, some of the variables may be; shift, employee, day, night, seasonal, morale etc.
    Use return to work interviews, I structure interviews around;> Welcome employee back> Establish reasons for absence with employee, be compassionate about helping to solve these reasons> Make it clear to the employee that it is their responsibility to attend work (for-fill their contracted hours)> Finish interview on a positive note, maybe on what has happened on the shop floor during their absence
    Implement controls;> On sick pay entitlement> Serial offenders
    Overtime allocated based on attendance, this is particually effective if you operate waiting days for sick pay.
    To summarise;

    Detail your analysis on the problem
    Talk to your employess, open up dialogue
    Constructive return to work interviews
    Implement controls
    Look at introducing waiting days for an employee based on their record



    I would agree with Mike.How do you validate your hypothesis that incentives could solve the problem of Äbsenteeism”?.You will have to answer this question before you implement it.I am working on exactly the same probelm for my company(call center) and we had one of our team members saying incentives for äbsenteeism”could remove the prolem.I thought let’s do a survey.”there were 10 questions and one of them is:
    what is the minimum incentive that will attract you or anything lower than that will not motivate you?

    Nothing(I am working for what I’m being paid!)
    Rs 500/-
    Rs 1000/-
    Rs 1500/-
    Even if you give me Rs 2000/-, I don’t still mind being “Absent”
    Guess what??..almost 28% of them picked up the last option(Even if you give me Rs 2000/-, I don’t still mind being “Absent”).There are such people in most of the organizations.Incentives will make no difference.some points to be considered:

    80% of the emp might be motivated by incentives and this usually are the ones who are already regular.
    20% of the employees who are ready to lose their day’s pay due to absenteeism will not be much interested in you little incentives.They are already willing to forgo it.
    The 20% of such employees have a diff motivation.Your questionaire should be good enough to get those motivation factors from them.In my case, 85% of those 20%(who choose last option) have ‘health problems’.Here, the foucus completely changes.
    When you know what the defaulters need, you will know how to give it to them.
    Just my thought.


    Preeti S

    Hi Nitin,
    I beleive you are based in India and are working with a BPO ………..I would like to get in touch with you so that we can share our experiences and thoughts pls mail me at ……[email protected]



    I would look to the folks who specialize in organizational behavior. They can offer solutions into many employee behavioral issues, including absenteeism.



    Be careful with this one. Yes, it’s important to keep unscheduled absenteeism under control. However, the last thing you need is someone coming to work when they shouldn’t and getting everyone else sick. Not only can you create even more unscheduled absenteeism, but you’ll have sick, unproductive people making more mistakes than usual.
    A big part of attendance management comes down to measurement systems: How do you know whether someone is really sick?



    Dear Kim,
    In my past, prior to becoming a Black Belt, we faced this problem at a large manufacturing facility.
    I agree with an earlier post, that says for some people nothing you do will make a difference, as Management. We however decided to take a slightly different approach.
    We did use incentives, but the incentives were Team, Department and individually based. In this way we not only had the carrot, we had the employees fellow team mates ability to earn the incentive applying peer pressure as well.
    The entire operational definition was based not on Managements desired outcome, but on the average of the current workforces performance, this was in cooperation with the rather militant Union enviornment we were dealing with.
    So if we averaged 5.5% daily absenteeism, if employees were over that percentage, they were automatically not eligible. If the team they were assigned to was over the average, the entire team was penalized a % of pool $’s for the number of team memebers that were over the average %.Similar metrics were in place for the Department.
    We were worried that once an Individual or Team dropped below the number they would loose interest in the program and that groups absenteeism would increase, but the data did not indicate this, We gave Monthly ( Pizza for lunch or a morning breakfast), Quarterly (Movie tickets or subsidized tickets to theme parks in the area)  and Annual Awards( Gift Certificates).
    The peer presure worked very well, we found that the % of employees abusing the absentee policy dropped, and those that continued the abuse were “forced out” by there team mates. We also found that employees who really had issues ( Mother or child illnesses caused absenteeism) were a result of there being unaware of the rules we had in place to address and account for these issues ( Family Medical Leave act).
    All in all, it saved the company real money, we reduced absenteeism from @ 5.5% to less than 2.8%, but the real issue was that productivity improved from 87% – 93%. The reduction in O.T., additional head count for the missing employees and changes to line staffing really made a large difference. The program cost less than $50,000 to administer, but “saved” over $350,000. Not a bad payback/ROI. The employees satisfaction level, as measured in the Surveys we did also improved.
    I hope this helps.



    Hey Ramblinwreck13,
    Thank you for your post.It”s is an interesting suggestion and a solid testimony for a succesful project implementation.
    Can you share with us, your incentive structure for the individual,team and Dep for äbsenteeism rate”.Which as given the highest priority and  %incentive?.

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