human resources management unit 20

7/30/2019 Human Resources Management UNIT 20

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UNIT 20

Absenteeism and labour turnover

Of the various problems faced in the management of human

resource, the two problems confronting any organisation are:

i) Absenteeism andii) Labour turnover

We shall focus our attention on absenteeism first.

ABSENTEEISM

Meaning

Absenteeism, in simple terms, means the failure of an employee to

report for duty when he is scheduled to work. An employee is considered

as scheduled to work when the employer has work available for him and

the employee is aware of it. An employee is to be treated as absent for the

purpose of absenteeism statistics even when the does not turn up for

work after obtaining prior permission.

If an employee reports for duty even for a part of the day or shift,

he cannot be counted among absentees.

Absence of an employee on account of strike or lock out or layoff,

which is involuntary absence, will not come within the purview of the

term absenteeism.

The rate of absenteeism is measured by applying the formula


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Causes of absenteeism

Among the various causes of absenteeism, the following important:

1. Nature of Job - If the nature of job performance by the employee is

dull and monotonous, he likely to be absent frequently, this

happens because, the employees loses interest in work. He feels

physically and mentally tired.2. Strained relationship with superiors and fellow employees -

Another reason for and employees frequent absence for duty is

that he is unable to get along with his superiors and fellow-

employees. This happens because, his superiors and fellow-

employees may find fault with him, criticize him unnecessary or

even tease him. It is also possible that the fault may lie with the

employee, i.e., he may shirk his duties or find fault with others forhis lapse.

3. Health grounds - For health reasons, an employee may be absent

for work frequently. If the employee or anybody in his family falls

sick often, he may not be to be regular for work.

4. Personal work- An employee . Sometimes may have to attend to

some personal work for the sake of which he may be absent for

work. Such a need may arise when an employee, building a house,

has to supervise construction work or is on a pilgrimage tour and

so on.

5. Stress conditions - Another important reason for absenteeism is

that many workers undergo stress. Such stress conditions develop

due to domestic commitments and work pressure. Many


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individuals lack the mental courage to handle crisis. This affects

their mental health.

6. Industrial accidents - In spite of safety measures, industrial

accidents do take place. In view of such accident there is loss of

man-days.

7. Unattainable targets - Some employee set targets that are beyond

the reach of their employees. This may force some employee to

proceed on leave frequently.

8. Lacks of holidays - Some organisation follow the concept of five

day week. The employees working in these hand organisations,

thus, enjoy two weekly holidays. On the other hand, some

organisations still work for six days in a week. Undoubtedly, the

morale of the staff working in a concern that follows the five day

week concept will be much better. In some organisations, the

employees may not be given holidays even on certain importantfestival days. This forces them to be absent for work on such days.

9. Social compulsions - Every person has certain social compulsions.

A marriage in a persons family, for example, forces him to avail

leave to make the necessary arrangements. Same thing happens

when a death occurs in a family.

10. Inclement weather and climatic conditions - loss of man days

also occurs in an organisation due to bad weather and climaticconditions. The turn out of employees, for example, may be less

during days of heavy rains.

11. Bandh, transport strike etc. - Attendance in the workplace tends

to be poor during days of bandhs and strike by transport

employees.


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Consequences of higher rate of absenteeism

Higher rate of absenteeism in any workplace leads to the following

consequences:

1. Human resource planning loses its value - The manpower needs of the

enterprise would have already been anticipated and steps would have

been taken to ensure the right number of employees. Higher rate of

absenteeism obstructs the process of implementation of the HR plan2. Flow of work gets affected - Frequent absence of employees affects the

smooth flow of work in the organisation. For example, of Bs work is

dependent on As work, absence of A on any day affects Bs work. If

such a trend continues, implementation of the basic enterprise plan

becomes difficult.

3. There is decline in production - Obviously, loss of man days result in

loss of output. Shortage of manpower makes it difficult to adhere tothe production schedule.

4. Target attainment becomes difficult - Due to shortage of manpower, the

enterprise will not be in a position to attain its production target.

When it does not attain its production target, it becomes difficult to

attain the sales target as well. Failure to attain sales target result in the

business not attaining its targeted level of profits.

5. Machine capacity cannot be fully utilised - Higher rate of absenteeism

results in idle plant capacity. This happens because, unavailability of

the required manpower results in under utilization of the machine

capacity.

6. Casual workers may have to be employed - Sometimes, the enterprise

may have to appoint temporary or casual workers in place of the


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employees who are absent. This may become necessary to mitigate the

effects of higher rate of absenteeism.

7. Quality of work suffers, as the casual workers may not work efficiently -

The casual workers may not be as efficient as the regular workers of

the concern are. This affects the quality of work done.

8. Execution of orders becomes difficult - Due to lack of manpower, the

enterprise will not be able to carry out promptly the orders of its

clients.

9. There is increase in overtime work - Sometimes, the available employees

may be requested to work overtime to complete a particular task.

Payment for overtime work is always paid at a rate higher than that

fixed for normal work. This increases the financial commitment of the

enterprise.

10. Work - pressure of employees who have turned up for duty

increases-Often, the available employees are requested to dothe work of those who are absent so that when these employees

are absent on any day there will be someone to do their work.

But such a practice increases the work pressure of the available

employees.

11. The enterprise my have to incur the displeasure of its customers -

This happens because of the delay in work caused by the

shortage of manpower. The customer, therefore, are made to wait.

12. It may necessitate disciplinary action in certain cases - The

management may have to initiate disciplinary action against

those employees who are absent without prior permission and

without valid reasons.


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13. Employees lose pay for the period of unauthorized absence - The

employees may have to forego pay for the period of

unauthorized absence. This makes it difficult for them to meet

their family commitments.

14. Loss of pay forces the employee to borrow - As a result, the

employees become indebted to moneylenders.

15. The enterprise may suffer loss of reputation -As the enterprise is

unable to fulfill its commitments to its customers, it may suffer

loss of reputation.

Absenteeism in India

There have been studies on the problem of absenteeism in India.

Some of the important observations made in these studies have been

given below:1. The rate of absenteeism has been more than 10%.

2. Absenteeism among workers is more than that among supervisors and

managers.

3. Large organisations face the problem of absenteeism more than small

organisations do.

4. Department where supervisors are indifferent to the welfare of

employees face a higher rate of absenteeism

5. Absenteeism in night shifts is more than that in day shifts.

6. Absenteeism rate is higher on days before and after a holiday.

7. Women employees are absent more often than men employees are.

8. The rate of absenteeism is higher in the case of employees below the

age of 25 years and above the age of 55 years.


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9. Rate of absenteeism is the lowest on the day of pay disbursement and

is the highest immediately after the pay day.

10. Seasonal bias in the causes making for absenteeism has also been

noticed. Absenteeism due to sickness has been found to be more in

July and September and less in April and June.

Measure to control absenteeism

It may not be possible to eliminate absenteeism altogether. But the

following measure may be adopted to minimize the rate of absenteeism.

1. Selection of right candidates - The enterprise has to be careful while

selection candidates for various jobs. Only deserving candidates need

to be selected. All those who show no commitment during their period

of probation should not be retained.

2. Proper assignment of work - Before assigning work to any employee,

his interest, willingness and capacity will have to be taken into

account. When this is done the situation of an employee doing some

work for which he has neither attitude nor aptitude will not arise.

Such a measure will help to reduce the rate of absenteeism.

3. Attainable targets - The target set for every employee should be such

that he will be able to attain it. If the target is reasonable, the

employee will strive to reach it. This will boost his morale and

therefore, he will not be under any pressure to be absent for work.

4. Provision for holidays - The five-day week concept is universally

accepted. Every enterprise, therefore may give its employees the


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benefit of two weekly holidays. This will certainly help them to refresh

themselves physically and mentally and they will be perfectly fit for

work for the next five days. Similarly, the employees may be given

holidays on important festival days so that they will be able to be with

their families on such days. This fulfils the social needs of employees.

5. Proper - Subordinate relationship- the manager sh9ould not assign

work to his subordinates in the way work is assigned to machines. He

must understand that his subordinates have emotions, values and

sentiments. He must be good in the art of getting things done by his

responsibilities and work with commitment. In other words, both the

superiors and their subordinates should strive for good human

relations in the workplace.

6. Proper inter- personal relationship - The relationship between the

employees should be cordial. When an employee wants to avail leave

in view of personal work, he may, by a mutual agreement with hiscolleagues, ensure that the enterprise work does not suffer in view of

his absence. In the same manner he may also help his colleagues when

they proceed on leave. Proper inter personal relationship will ensure

smooth flow of work in spite of the absence of a few employees.

7. Elimination of the monotony element- Steps may be taken to

eliminate the monotony element in certain jobs. The enterprise may

give up certain outdated and age- old practices. Record- keeping, filingand such related work may be done using computers. This saves lot of

labour for the employee and also makes the job less strenuous.

8. Suitable incentives- incentives, both monetary and non-monetary,

must be offered to employees to induce them to work harder and with

commitment. If no distinction is made between efficient and


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inefficient employees, those employees who are sincere and efficient

will also start shirking duties.

9. Conducive working conditions - The physical facilities to the

employees must be of high standards. These include drinking

conditions make the employees feel at home. It discourages them from

availing leave frequently.

10. Counseling - It is a technique used to enable and employee to get rid

of his mental stress. It helps to refresh an employee mentally and it

brings back the enthusiasm lost.

Having discussed absenteeism, let us now focus attention on labor

turnover.

LABOUR TURNOVER

MeaningThe rate of change in the number of employees of a concern during

a given period is what is known as labour turnover

In any organisation certain number of employees leaves their jobs

every year due to various reasons. To fill up these vacancies and to meet

the need for additional hands, certain number of employees may be

appointed thus, if one compares the number of employees in the

beginning of the year in a concern with that at the end of the year, one

may find a discrepancy. Labour turnover is only concerned with this rate

of change in the workforce.

Certain employees do change their jobs owing to social and

economic considerations; labour turnover is either normal or excessive. It


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is within 5% Normal labor turnover arises out of certain unavoidable

causes and the management need not worry about it.

Excessive labour turnover arises out of certain avoidable causes it is

only this management should try to control.

Causes of labour turnover

The various causes of labour turnover can be classified into the

following two categories;

i) Unavoidable Causes and

ii) Avoidable causes

The unavoidable causes are:1. Death, retirement and disablement - Death of an employee, if

occurs, and retirement of employees are inevitable. An employee

who has become disabled due to an accident either in the

workplace or outside cannot perform his job.

2. Personal betterment - If the employee is able to find another that is

better in all respects when compared with his present job, he may

leave.

3. Domestic responsibilities in case of women employees A woman

employee may after her marriage resign her job owing to domestic

responsibilities.

4. Discharge on disciplinary grounds- If the employee is dismissed for

certain reasons- misconduct, willful negligence etc.,


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The avoidable causes are:

1. Lack of job satisfaction - An employee who lacks job satisfaction

in the present organisaiton will be on the look out for a better

placement. Once he finds such an offer, he may resign and go.

2. Low pay- It is not unnatural to find employees looking for job

offers that give them more pay. Professionals in general and

computer professionals in particular, these days, have such a

criterion.

3. Lack of incentives - An employee who is not happy with the

incentives provides in the present organisation may try for job

elsewhere. Once he finds such an offer, he may resign his present

job.

4. Lack of job security - Everyone needs a secured job. An employee

engaged in a temporary job would leave the present organisation

the moment he finds a secured job.5. Lack of social security benefits - Employees expect certain social

security benefits like pension, provident fund, gratuity, insurance

etc. employees in government service alone get pension and such

other benefits. It is not unnatural to find and employee, working

for a private organisation, trying for a government job. In case he

gets such an appointment, he is sure to leave his present employer.

6. Lack of promotion opportunities - If the present job of theemployee does not provide scope for any promotion, the employee

may have to serve in the same capacity till his jobs that provide

ample promotion opportunity. Eh experience in the present

organisation may help him in finding a better job. Once he finds

such a job, he may leave the present organisation.


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7. Strained superior - subordinate relationships- Even if the tangible

benefits mentioned above are available in the present organisation,

an employee who is unable to get along with his superior may

resign his job.

8. Poor inter- personal relationships- An employee who finds his

colleagues to be jealous, irritable and uncooperative may be

planning to leave the organisation. One may not be able to work in

such an atmosphere.

Effects of Labour Turnover

Excessive labour turnover in any organisaiton has the following

adverse effects:

1. Flow of work gets affected - Frequent changes in the work force

affect the smoothes flow of work. As a result, the enterprise may not

be able to adhere to its plan.

2. Increase in cost of operation - Recruitment of new employees,

giving them training and all such activities involve additional

expenditure. This results in increase in cost of operation.

3. Low level of efficiency of the new recruits - The level of efficiency

of the new employees tends to be low. This is because the new

employees take time to settle down. They may not pick up thingsfast. What can normally be done in an hour may be done in a day.

This results in loss of time.

4. Reduced output - Higher rate of labour turnover result in reduced

output. This happens due to two reasons. First, there is delay in

recruiting new employees. As a result, there is loss of man hours.


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Secondly, the new employees may not be as efficient and effective as

the old employees were.

5. Quality of work suffers - The new employees may not initially

possess the skill with which the old employees worked. This would

affect the quality of work.

6. Wear and tear of machines tends to be more - Due to rough

handling of machines by the new employees, the wear and tear of

machines is bound to be more.

7. Loss due to improper handling of materials - There is scope for

loss due to wastage and breakage of materials due to improper

handling by the new recruits.

8. Increase in industrial accidents - There is also scope for increase

in the rate of industrial accidents due to the ignorance and

incapacity of the new workers. Such workers may not be well versed

in the use of safety devices.9. Higher cost of supervision - The new employees need close

supervision. This is because they may require the help of the

supervisors often. The supervisors also need to ensure that the new

recruits do not make blunders. This necessitates the deployment of

more supervisors and thereby increases the of supervision.

10. Increase in cost of production - Loss of man hours, reduced

output, recruitment and training costs, increase in wear and tear of machines, loss due to improper handling of materials and all such

factors lead to higher cost of production.


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Cost of labour turnover

The cost of labour turnover may be classified into two:

i) Preventive costs and

ii) Replacement costs.

Preventive costs

Preventive costs refer to all those costs incurred to satisfy the

existing employees to prevent them from leaving the organisation. Theseinclude the following:

1. Increase in pay

2. Increase in incentives

3. Better facilities for training

4. Amount spent on welfare measure, e.g., provision of water coolers,

canteen, restroom etc.,

5. Social security benefits such as pension, provident fund, gratuity

etc.

Replacement costs

Replacement costs are incurred once the organisation fails in its

efforts to retain its existing employees. These include the following:

1. Cost of recruitment

2. Cost of training

3. Loss of output due to delay in recruiting new employees

4. Loss of output due to the inefficiency of the new employees

5. Loss due to wastage and breakage of machines mishandling by the

new recruits


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6. Loss due to increase in wear and tear of machine due to rough

handling by the new employees

7. Compensation on account of accident

8. Higher cost of supervision, etc.

Measurement of labour turnover

Labour turnover is a common problem in workplace. As long as itis within the normal level, it does not pose any threat to the management.

Once that rate of labour turnover becomes excessive, the management

cannot afford to ignore it.

Three different methods are generally used for the purpose of

computing the rate of labour turnover. These are:

1. Separation Method2. replacement Method and

3. flux method

Separation Method

This method compares the number of employees who have left the

organisaiton during a particular year with the total number of employees

on rolls during the year under review. It ignores the replacement of

employees done during the year. The formula for determining the rate of

labour turnover is;


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Illustration

Number of employees who have left the organisation during

2004=6

Total number of employee on rolls during 2004=72

The rate of labour turnover in the year 2004, therefore=

Replacement Method

This method considers only the number of replacements done

during the year. The number of employees replaced is compared to the

total number of employees on rolls to determine the rate of labour

turnover. The formula is:

If in the above illustration, out of 6 employees who have left the

organisation during 2004, only 4 have been replaced, the rate of labour

turnover as per the replacement method is

4/72 x100=5.56%

Flux Method

This method combines the separation and replacement methods.

It, thus, considers not only the employees who have left the organisation

but also those who have been appointed in their places during the period

under review.

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human resources management unit 20

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