Instructions

Supporting Lectures

Review the following lectures:

• Understanding the Financial Impact of Employee Absence
• Employee Absence, Productivity Loss, and Costs
• Identifying and Measuring Employee Absence

Introduction

For this project, you will develop a report on employee absenteeism and direct and indirect costs and evaluate attendance tracking software.

Tasks

• Evaluate the reasons for employee absenteeism.
• Analyze the direct costs and indirect costs associated with absenteeism (provide examples).
• Evaluate an article on productivity loss and absenteeism.
• Evaluate attendance tracking software.

To support your work, use your course and text readings and also use the

South University Online Library

. As in all assignments, cite your sources in your work and provide references for the citations in APA format.

Submission Details

• Create a 3- to 4-page, excluding title and references Microsoft Word document.
• Name your file as SU_HRM6010_W2_Project_LastName_FirstName.

Human Resources

Understandingthe Financial Impact of Employee Absence

As an HR professional, one of your responsibilities will include evaluating the absenteeism rate for an
organization. How often has your department been negatively impacted because an employee called
in sick at the last minute? For a moment, think of some reasons an employee will request a leave of
absence. As you peruse the chart below, consider the number of employees who are absent annually
and the �nancial impact that this has on the organization.

While the employees may deem their absence necessary, the leaders will most likely have a different
perception. In addition, any unplanned absences could have a domino effect on multiple departments.

According to Cascio and Boudreau (2011, p. 54):

Case Study
Review the next screen to know more.

Part of your job as an HR professional is to present the CEO with a report to show the �nancial
impact of absenteeism and come up with a solution.

An employee has a child in preschool who happens to come in contact with another
child who has chicken pox. Since chicken pox is highly contagious, the employee
must request a leave of absence. The employee and his spouse are forced to
alternate work schedules, because there is no one available to take care of the child.
The employee uses seven days of sick leave during this time, which means he has not
actually worked 56 of the required 160 hours for the month.

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Additional Materials

From your course textbook, Process Metrics and Measurement Complete Self-Assessment Guide,
review the following chapters:

Criterion #4: Analyze

Criterion #5: Improve

Criterion #6: Control

From the South University Online Library, review the following articles:

Cost Implications and Management of Employee Absences
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=49388942&site=eds-live)

Survey on the Total Financial Impact of Employee Absences
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=56101371&site=eds-live)

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https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=49388942&site=eds-live

https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=56101371&site=eds-live

Employee Absence, Productivity Loss, and Costs

There are various reasons an employee may take a leave of absence. The absence could be
unintentional, intentional, or habitual. In addition to recognizing the normal reasons for employee
absence, it is also important to understand how low employee morale or disengaged employees
can impact the absenteeism rate and whether this should be considered a part of the analysis.

The HR professional should strive to accomplish four important objectives:

Determine the reason for the high absenteeism rate.

Evaluate the loss of productivity.

Assess the costs.

Develop an action plan.

Below is an explanation and chart of how to calculate the absenteeism rate and costs.

Absenteeism rate = [Absence days/Average work force size] × working days, or

Absenteeism rate = [Hours missed/Average work force size] × working hours

1. Compute total employee hours lost to absenteeism for the period.

2. Compute weighted average wage or salary/hour/absent employee.

3. Compute cost of employee bene�ts/hour/employee.

5. Compute total compensation lost to absent employees (1. X 4a. or 4b. as applicable).

6. Estimate total supervisory hours lost to employee absenteeism.

7. Compare average hourly supervisory salary + bene�ts.

8. Estimate total supervisory salaries lost to managing absenteeism problems (6. x 7.).

9. Compute the costs of substitute employees.

10. Estimate the costs of reduced quantity or quality of work outputs.

11. Estimate total costs of absenteeism (∑ items 5, 8, 9, and 10).

12. Estimate the total cost of absenteeism/employee (item 11, 4 total number of employees).

There are direct costs and indirect costs associated with each employee absence that negatively
impact the organization such as paid time off, overtime, the use of temporary or contingent
workers (replacement costs), and departmental and organizational productivity loss, especially if
the employee absence is not expected or planned. It is the responsibility of the HR professional to
have a sophisticated way of tracking employee absence, loss of productivity, and the cost to the
organization.

Additional Materials

From your course textbook, Process Metrics and Measurement Complete Self-Assessment Guide,
review the following chapters:

Criterion #4: Analyze

Criterion #5: Improve

Criterion #6: Control

From the South University Online Library, review the following articles:

The Relationship between Chronic Conditions and Absenteeism and Associated Costs in
Canada (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=2016-
42743-006&site=eds-live)

Employee Absence Affects Costs, Productivity
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=100539046&site=eds-live)

Minimizing Costs from Employee Absences
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?
direct=true&db=edb&AN=102010689&site=eds-live)

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https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=2016-42743-006&site=eds-live

https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=100539046&site=eds-live

https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=edb&AN=102010689&site=eds-live

Identifying and Measuring Employee Absence

Case Study:

One of your department managers has 200 employees in his department. Over the past thirty days,
the employees have been disgruntled because the organization eliminated dental insurance and
there would be no cost of living increase (COLA). Twenty of the seasoned employees are very
unhappy since the new department manager is an external applicant. Many of the employees in the
department have taken unplanned absences. The CEO has not been pleased with the �nancial
progress of the company due to the high absenteeism rate. What course of action should be taken?

The success of an organization relies heavily on its employees, managers, and leaders to maintain a
regular work schedule. In the absence of a structured workforce, chaos is imminent. The HR
professional may use the following options to uncover the various reasons for employee
absenteeism: attendance tracking software, surveys, or meetings with employees and department
managers. While everyone understands the effect that employee absence has on an organization, the
monthly, quarterly, and annual revenue loss may be unclear. The key to correcting and controlling the
problem is based on your evaluation. By applying HR analytics, process metrics, and measurement
methods to employee absence, it will prove to the leaders that you are seeking a solution. The seven-
criteria scoring system will be utilized over the next few weeks to assist you in diagnosing the
problem of employee absenteeism.   

Recognizing the problem

De�ning the problem

Determining how to measure the problem

Analyzing the problem

Evaluating methods for organizational improvement 

Evaluating methods to control the problem

Evaluating methods to sustain a desired outcome

Employee Absenteeism
Review each tab to learn more.

Additional Materials

From your course textbook, Process Metrics and Measurement Complete Self-Assessment Guide,
review the following chapters:

Criterion #4: Analyze

Criterion #5: Improve

Criterion #6: Control

From the South University Online Library, review the following articles:

Recording All Absences in One Place
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com/login.aspx?
direct=true&db=hjh&AN=73909198&site=eds-live)

Measuring Employee Absence
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx?
direct=true&db=bth&AN=21031377&site=eds-live)

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https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com/login.aspx?direct=true&db=hjh&AN=73909198&site=eds-live

https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx?direct=true&db=bth&AN=21031377&site=eds-live