Is absenteeism a predictor

Voluntary Turnovers - Is Absenteeism A Predictor?

Chapter One - Introduction To The Problem

In today's society, absenteeism is a huge problem that organizations do not pay much attention to. Maybe now is the time that organizations place a little more focus on absenteeism as this problem could be a predictor of voluntary turnover rates. When employees leave their jobs, sometimes it may have an affect on productivity, customers being serviced in a timely a manner, employee morale and most importantly the organization's bottom line.

Voluntary turnover can be internal or external. Internal voluntary turnover is when an employee takes another position within the organization. External voluntary occurs when an employee leaves the organization all together. The focus of this research will focus on external voluntary turnover. There are many factors that may cause an employee to leave his job. Factors such as not being satisfied with pay, the working conditions or hours, or even because advancement opportunities are not available are some of causes of voluntary turnovers. This paper will seek to determine if excessive absenteeism can actually be a predictor of voluntary turnovers.

Research Question

Can organizations predict voluntary turnover rates based on absenteeism within the organization?

Purpose Of Research

Turnover is a topic that has been widely studied over the years; however, there is very little empirical data that exists in reference to absenteeism. Steers and Mowday (1981) model will be used to determine if there is a relationship between voluntary turnovers and absenteeism. Since turnovers can become a serious problem for organizations, additional research should be done to determine the correlation between the two variables. Excessive turnovers can eventually hurt an organization's financial performance. In order to determine if a relationship exists, organizations will first need to distinguish between voluntary and involuntary turnovers. According to Sullivan (2009), some studies indicate as many as two-thirds of employees of employees are ready to go.

The compensatory model suggests that absenteeism combined with turnover rates are a form of work withdrawal. There is a second model that suggests the two variables are completely independent of one another. The third model, progression of withdrawal model suggests employees go through stages of psychological withdrawal before actually leaving an organization. Due to these gaps in literature, more research should be conducted to determine if absenteeism could predict voluntary turnover rates.

Significance Of Study

Employee turnover is a problem that is continuing to grow. Employers will need to develop some retention strategies as employees are looking for other opportunities. “Employee turnover is on the rise next year, based on a survey that 60 percent of workers are unhappy with their present jobs and plan to leave in 2010 (HR Focus, 2010, pg. 8). Organizations should closely evaluate the types of absenteeism that is occurring within their organization. By taking a closer look, organizations might be able to find a correlation between absenteeism and voluntary turnover rates. The goal of this research is to take Steers and Mowday's model and compare it against other models to determine if turnover rates can accurately be predicted.

Hypothesis

Organizations can determine by differentiating between voluntary and involuntary absences the amount of turnover they will have within the organization.

Chapter 2 - Literature Review

Voluntary turnovers are managerial issues that many organizations are not placing enough focus. Managers should try to determine what is causing employees to leave their organizations voluntarily. Voluntary turnovers can become very costly to an organization's bottom line. Once managers actually begin to take the time to study predictors of turnover within their organization, they can begin working on retention strategies to keep their employees. The review of literature will include that of Steers & Mowday, (1981) as well as the findings of other theorists on predicting voluntary turnover rates and its relationship to other variables.

First organizations need to separate all involuntary turnovers from their voluntary turnovers. “Voluntary turnovers, in contrast, is a discretionary behavior on the part of the employee and, consequently, has been categorized with absenteeism and lateness as a form of withdrawal from the organization” (Morrow, McElroy, Laczniak, Fenton, 1999). With the given definition of voluntary turnovers, organizations need to focus on who is leaving their organization and why.

Review Of Models

Researchers at the Tavistock Institute (Hill & Trist, 1955) suggest that absenteeism is a coping mechanism to turnover (Morrow et al. 1999). In conducting their research it was argued that employees who engaged in absenteeism did so to relieve stress or because they were dissatisfied. For these reasons, the researchers believed that at this point, turnover became an unnecessary factor. Basically, these researchers believe that there is no relationship between the two variables, absenteeism and voluntary turnover rates.

A second model also suggests that these variables have no relationship. “Mobley (1982), has theorized situations in which no relationship would exist, such as in those cases where turnover is the result of pull factors (an attractive job) as opposed to push factors (Morrow et al. 1999). Herzberg, Mausner, Peterson, and Capwell (1957), created the progression of withdrawal model, which is the third model that is being evaluated. The progression of withdrawal suggests that a relationship between absenteeism and turnover does exist. According to this model, if an employee continues to be dissatisfied, then that employee will go through a withdrawal process. The process includes the employee being late for work, then progressing to being absent and finally leaving the company. According, to a meta-analysis by Mitra, Jenkins, and Gupta (1992), there is empirical data that states the correlation between absenteeism and turnover was a positive .33 (Morrow et al., 1999).

Steers & Mowday, (1981) model on absenteeism and voluntary turnover incorporated other factors that might involve reasons as to why an employee would continue to work for a company or leave. The Steers & Mowday model includes factors on voluntary turnover rates that organizations cannot control. According to Steers & Mowday model, job expectations and values interact with organizational characteristics, experiences, and job performance in determining an employee's affective responses to a job (Dreher, 1982).

The first category that Steers & Mowday model concentrates on is the actual work factors that may influence an employee to want to leave a company. In order to argue this point Steers & Mowday cited work produced by Sussman and Cogswell. The work suggests that when an employee is considering changing employment factors such family and even involvement in the community could be an influence. Steers & Mowday second category involves the economy and market conditions. These theorists believe that these factors too influence whether an employee will leave or stay.

“Jackofsky's (1984) analysis of job performance and turnover suggested that different types of voluntary leavers are influenced by different turnover antecedents” (Krug, 2006). In studies conducted by Jaclofsky's, she has found that employees who leave voluntarily did so because of their desire to move and due to perception of ease. Her study also suggested that employees who perform poorly could possible share the same attitude as those employees who have been terminated as she was not able to find a relationship between their reason to leave, job satisfaction or any other variables that have been described to predict voluntary turnovers.

Turnovers can be viewed as functional or non-functional. A turnover is considered functional when the organization can actually benefit from an employee leaving the organization. Usually, this is true when an employee was not a top performer. A non-functional turnover; however, is one in which the employee who is leaving is a good worker. A study conducted by Hollenbeck and Williams in 1986 found that 53% of turnovers were in favor of the organization. “In a meta-analytic study relating job satisfaction, organizational commitment, and turnover and intent to leave, Tett and Meyer (1993) found that job satisfaction had the strongest linkage with turnover intent and turnover (Krumm, pg. 220). Krumm also indicated that there are researchers who found a relationship between absenteeism and the employee's intent to leave the company.

There are many models that exist when it comes to trying to predict voluntary turnover rates; however, in reality these models do not deviate that much from the model of March and Simon (1958). New researchers, Mitchell, Holtom, Lee, Sabalynski and Erez (2001) developed a new model in which they call Job Embeddedness. There is hardly any empirical data that exists on Job Embeddednes because it was just newly introduced in the 2000's. Based on Mitchell et al. (2001, p. 1104), the most important parts of Job Embeddedness are the extent to which people have links to other people or activities, the extent to which their jobs and communities are similar to or fit other aspects in their life spaces, and the ease with which links can be broken-what they would give up if they had to physically move to other cities or homes.”

Cost Of Turnovers

A cost benefit analysis should be conducted by organizations to determine how much turnover rates are costing their companies. Many organizations may be surprised at how much voluntary turnovers can hurt the company's bottom line. Training in itself is an expensive cost to an organization. When hiring new employees background checks have to be done, testing is involved and the time spent on interviewing new employees can all add up. According to Blake, (2006), employee turnover is one of an organizations biggest cost. Still many organizations have not realized just how much turnovers are costing them. Productivity is one of the biggest aspects of how costly turnovers can be for an organization. According to Ramsey-Smith, (2004), it costs a company $78,000 to replace an employee in a $46, 000 per year job.

Gap In Literature

Absenteeism alone cannot accurately predict voluntary turnover rates. Researching only these two variables will not yield a significant amount of information to determine if there is a correlation between the two variables. Further research needs to be conducted determine what types of absences are occurring, which could eventually lead to voluntary turnovers. Reviewing absenteeism as a whole may be too broad to produce accurate results. By going a step further to research the types of absences occurring within the organization may yield better results.

Types Of Absences

Absenteeism can be categorized into broad categories. Those categories are culpable and non-culpable absenteeism. Non-culpable absenteeism is also called innocent absenteeism. The first step for organizations would be figuring which category an employee's absenteeism falls under. Once this is done the organization would then be able to take a closer looker in detail of the absenteeism that is occurring.

“Innocent absenteeism is one in which the employee is absent from work due to genuine cause or reason” (Priya, 2008). Innocent absenteeism is beyond the employees control and is blameless. Sickness and injury are considered to be innocent absences. Innocent absences are not subject to disciplinary action but should still be monitored.

“Culpable absenteeism is one in which a person is absent from work without any genuine reason or cause” (Priya, 2008). Culpable absenteeism occurs when an employee calls out of work advising her or she is sick, when that is not the real reason. Other examples of culpable absenteeism is lateness/leaving early, failure to call in, absences without leave and abuse of leave.

Causes Of Absenteeism

Stress is one of primary causes of absenteeism in the workplace. “Stress has seen a 316% increase as a reason for absenteeism since 1995” (USA Today, 2000). Employees who are stressed will miss work more often than employee who is not. Factors such as low morale, alcoholism, personal problems, and an excessive workload help to contribute to absenteeism. Though these factors are not the only causes of absenteeism, these reasons are some of the most common causes of absenteeism.

Most often stress is the workplace is due to an unpleasant relationship that is possibly characterized by a lack of communication between an employee and a manger. Stress also causes other health problems, which in return may cause an employee to miss work. Stress can cause other problem such as headaches, backaches, chest pains, and even hypertension. “Research reflects significant connections between actual physical health ailments brought on by stress. Illness, depression, traumatic work or life events can all increase stress and absence from work” (Lakhdar, 2004). Employees cannot perform at their best if they cannot remain focused on the task. The sign of a headache or backache gives the employee the perfect opportunity to stay at home. It may be possible to reduce absenteeism, if the level of stress can be reduced in the workplace.

Low morale has a significant impact on absenteeism. Low morale will develop when an employee begins to feel unappreciated while being overworked and underpaid. Supervisors and managers can play a role in an employee having low morale.

Companies with lower morale are seeing significantly higher rates and costs of unscheduled absences. In fact, the rates of unscheduled absenteeism are more than one-third (35 percent) from those employees that ranked their company as having poor/fair morale (2.9 percent)than those with good/very good morale (1.9 percent). (Ashworth, 2005) As a result low morale is a factor that causes employees to call in sick at the last minute. Even with the facts stated some organizations are still not trying to correct the problem.

Chapter 3 - Methodology

Research Plan

Employees from different organizations were called weekly to monitor their absences. If the employee was absent, they were then asked the reason for their absence. If the absence was not a legitimate reason, the employee was then asked to explain the reason for being absent in further detail. The main purpose of conducting the weekly phone calls was to determine if employees who terminated their employment voluntarily could be linked to absenteeism.

Population & Sample Size

The population chosen for this research was corporations who have at least one hundred or more employees. Corporations with one hundred employee or more employees were chosen as they would offer more exposure to different types of absences and for different reasons. Of the total population, only industries that have call centers, assembly production and the service industries were chosen to conduct the research.

Adopted Model

Originally, Steers & Mowday model was chosen to conduct this research. To expand upon what these two researchers have done, surveys were given to organizations to complete. The results of the surveys along with the finding of other studies were computed using the meta- analysis method. This method was chosen, as meta-analysis is one way researchers can combine data from different studies. The purpose of meta-analysis is to find a solution that works and helps plans for further research.

Sampling Technique

For the purpose of this study, the simple random sampling technique was chosen. This method was chosen to give each organization an equal opportunity for being chosen and this would alleviate the chance of only surveys that would prove the hypothesis from being chosen. This method was thought to be the best one to use for achieving the desired result. Also by using this sampling technique each organization is independent of each other and the selection of one organization does not have an influence on the selection of another organization.

Use Of The Surveys With Meta-Analysis

Meta-analysis was used to code the data from previous studies and the current research that was done. By using meta-analysis it was desired that the same results from other literature could be proven. For the purpose of this research, meta-analysis was used to determine if the relationship of X, which is absenteeism had an effect on Y, which is voluntary turnover.

How Hypothesis Will Test Data

The data collected will either prove or disprove the hypothesis. This research sought to determine if absenteeism is a factor of voluntary turnovers. Performance is also a variable that was looked at in trying to make this determination. Previous studies have shown both positive and negative correlations of absenteeism and performance on the prediction of voluntary turnovers. To take the research a step further, it was decided that it needed to be determined if performance was related to absenteeism, which could cause one to eventually leave on a voluntary basis.

Variables Defined

Voluntary turnover can be defined as an employee terminating his or her employment from a company due to various reasons such as dissatisfaction, job performance, salary, or even unpleasant working conditions. Absenteeism usually is defined as any unscheduled time away from work. Though some absenteeism may be legitimate, excessive absenteeism can eventually hurt an organization's operations, which in return can affect profits.

Chapter 4 - Data Analysis And Findings

Overview Of Research

The hypothesis that organizations can determine by differentiating between voluntary and involuntary turnovers if absenteeism can be a determining factor had a weak correlation. This hypothesis alone could not prove that organizations would be able to successfully determine voluntary turnover rates based on this hypothesis. To further extend upon this hypothesis it was decided that the organizations would have to look at the different types of absenteeism that is occurring within their organization. For the purpose of this research lateness/leaving early, failure to call in and absences without leave was tested to determine if these factors could help organizations predict voluntary turnover.

Outcome Of Research

Absenteeism coded as lateness showed a positive correlation whereas leaving early failed to show a significant correlation with voluntary turnover. However, failure to call in showed a significant amount of variance in voluntary turnover. There was also a significant variance in the correlation between absences without leave and voluntary turnover. In support of the original hypothesis, absenteeism in general could not positively predict voluntary turnover. Further extending the research, to hypothesize that organizations can predict voluntary turnover by looking at the different types absenteeism showed a significant correlation in predicting voluntary turnover.

How Data Was Examined

To examine the data the meta-analysis method was used to test previous studies and the research that was conducted for this paper. For the purpose of this research lateness/leaving early, failure to call in, and absences without leave was coded. The theoretical relationship of each variable was defined. The population of the study was provided to show the relationship. The results of the studies was coded and computed. After examining the distribution of the sizes, the results of the data was analyzed. The impact of each variable was examined to determine what effect it had on voluntary turnover. The results of the data was interpreted and reported.

Chapter 5 - Summary, Conclusions, And Recommendations

Summary

In reviewing the literature, voluntary turnovers are expected to increase in the year 2010 as more and more employees are planning to leave job their. Based on this information, organizations should become more pro-active in figuring out ways to keep the employees they already have, as voluntary turnovers can be very costly to an organization. The literature in reference to absenteeism and voluntary turnover rates was mixed. Some researchers believed there is a correlation between absenteeism and voluntary turnover; whereas some researchers believe there is no correlation between the two variables.

As noted in the literature, voluntary turnovers can be categorized as a functional or non-functional turnover. A functional turnover can actually be beneficial to an organization but too many of these turnovers could become costly as well. Non-functional turnovers are the ones that really hurt as the company is losing a good employee. Losing a good performer hurts productivity and causing the organization to spend money in training, which can be expensive according to what type of training is provided.

Conclusions

Voluntary turnovers are a major problem that organizations are not paying enough attention too. Many organizations still have not realized just how costly voluntary turnovers can cost them. Absenteeism as a whole is not enough to determine if an employee will voluntarily leave a company. Organizations will have to look at the types of absenteeism that are occurring within their company. Based on the analysis, leaving early could not be positively used as a determining factor to predict voluntary turnover. Lateness, failure to call in and absences without leave did have some variance in relation to absenteeism and voluntary turnovers. Based on this information, organizations should begin to take steps to develop programs that may help decrease their absenteeism rates which in return could possibly help decrease their voluntary turnover rates.

Recommendations

To help alleviate or solve the problem of absenteeism and voluntary turover, managers will have to get creative. Mangers need to realize there is a need for creativity in the workplace. Today the task of coming to work is a burden rather than an enjoyment to many employees. To relieve some of that burden it is recommended that managers:

1. Create an incentive program

2. Adopt an attendance policy

3. Award paid time off

4. Provide supervisors/mangers with continuous leadership and development training

5. Provide a pleasant working environment

6. Plan for efficient operation

7. Value the employee

If organizations can begin to control their absenteeism rates, there is a possibility that maybe employees will not be as apt to leave voluntarily. Employees love to feel appreciated; therefore, placing more value on the employee is a good start.

The goal is to reduce voluntary turnover within organizations. To do this organizations need to begin using the information available to them on absenteeism to develop and implement retention strategies that work. Once a retention strategy is put into effect, it is advised that the plan be monitored to determine if the plan is working or if the plan should be modified.

By establishing an attendance policy the employer is setting guidelines by which an employee must abide. An attendance policy can be used as a tool by management within organizations to monitor and help prevent excessive absenteeism. The purpose of any attendance policy should be used to address excessive tardies and absenteeism. The guidelines should be clear as to what is acceptable and what is not. The policy should inform employees of how many tardies and absences are allowed in a specific period of time. The guidelines should outline what disciplinary action will be taken and how each tardy or absence will determine that action. Documenting each tardy or absence is important. The attendance policy should advise as to how the tardy or absence will be documented and how long the disciplinary action will remain on file. It is believed that if organizations follow these recommendations, they may be able to reduce absenteeism and voluntary turnover rates.