updated project final

8/3/2019 Updated Project Final

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EVALUATION &COMPARATIVE STUDY

OF IMPACT OF

EMPLOYEESABSENTEEISM &

ATTRITION RATE

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TITLE

A PROJECT SUBMITTED IN

PART COMPLETION OF

MASTERS IN MANAGEMENT STUDIES

TO

TIMSR

BY

Balajee S Cashvinkutathil

Under

Prof. Francis Lobo

TIMSR

MHRDM BATCH 2009-12

Shyamnarayan Thakur Marg,

Thakur Village, Kandivli (E),

Mumbai - 400 101

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CERTIFICATE

This is to certify that the study presented by Mr. Balajee SCashvinkutathil to Thakur Institute of Management Studies andResearch in part completion of Masters in Human Resources andDevelopment Management under Evaluation & Comparative Study ofImpact of Employee Absenteeism an Attrition Rate has been doneunder my guidance in the year 2009-12

The Project is in the nature of original work that has not so far beensubmitted for any other course in this institute or any other institute.Reference of work and relative sources of information have been givenat the end of the project

Signature of the Candidate

Forwarded through the Research Guide

Signature of the Guide

(Name of the Guide)

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OBJECTIVE

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INDEX

Chapter Topic Page Number

1 Absenteeism 8-16

2 Profile of the company 17-20

3 Theories of Absenteeism 21-30

4 Research Methodology 31-34

5 Analysis & Interpretation 35-59

6 Findings 60-61

7 Attrition Rate 62-75

8 Attrition Rate Calculation 76

9 Conclusion, Bibliography 77-79

10 Questionnaire 80-85

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CHAPTER 1

ABSENTEEISM

1.1 INTRODUCTION

Absence is the failure of worker to report for work when he is

scheduled to the work. A work is to be treated as absent for the

purpose of this absenteeism statistics even when he does not turn

up for a week after obtaining prior permission.

Absenteeism is classified in to two types viz., authorized

absenteeism and unauthorized absenteeism. Authorized

absenteeism is permitted absenteeism i.e., taking leave prior

permission of an employer. Unauthorized absenteeism means

taking leave without prior permission of an employer. Absence of

worker on account of strike or lock out or layoff i.e., involuntary

absent is not considered as absence for the purpose of

absenteeism study.

Absenteeism rate is the percentage of man days lost due to

voluntary absent (both authorized and unauthorized) to the

corresponding total man days schedule to work. It can be

expressed asunder:

Man days lost (both authorized and unauthorized)

------------------------------------------------------------------- X100

Man days scheduled to work

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According to K.N Vaid absenteeism can be measured with

the help of the following formula

Persons not working due to

Authorized leave + unauthorized leave

Absence Rate = --------------------------------------------------------------------

X100

Man shifts actually worked

According to the view of K. Aswathappa, Absenteeism costs

money to the organization besides reflecting employee

dissatisfaction with the company. Absenteeism is unavoidable

when the employee himself or herself falls sick, His or her

dependents at home suddenly become unwell or there is an

accident inside the plant. Unavoidable absenteeism is accepted by

managers and is even sanctioned by labor laws. Avoidableabsenteeism arises due to night shifts, opportunities for moon

lighting and earning extra income, indebt ness, lack of job

security, unfriendly supervision and job dissatisfaction. This

absenteeism needs intervention by themanagement.

Absenteeism is of two types:

1. Innocent absenteeism - Is one in which the employee is

absent from work due to genuine cause or reason. It may be due

to his illness or personal family problem or any other real reason

2. Culpable Absenteeism - is one in which a person is absent

from work without any genuine reason or cause. He may be

pretending to be ill or just wanted a holiday and stay at home.

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Many employees will, on occasions, need a few days off work

because of illness, however, when absences become more

frequent or long term and reach an unacceptable level,

action by management is necessary. Absence from work can

be expensive in bot h m on e t a r y and hu ma n te rm s. The

cos ts i ncu r red w he n a n employee is absent from work may

include:

(i) Replacing the employee or requiring other staff to cover the

absence;

(ii) Inability to provide services, or achieve section and

departmental objectives;

(iii) Low morale and general dissatisfaction from other staff,

particularly if the absence is perceived as unwarranted.

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Effects of absenteeism on Industry

Absenteeism

Affects production targets

Increases the work load of inexperienced & less experienced

Leads to rejection of finished products

Increases the cost ofproduction

Lowers the Profit margin

Affects Industrial growth

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Effects of absenteeism on the employees

Absenteeism

Reduces his earnings

Adds his indebtedness

Decreases the Purchasing power

Leads to family problems

Increases mental stress

Leads to inefficiency in hisjob

Loss ofemployment

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when the rate goes as high as 40percent.

1.2 STATEMENT OF THE PROBLEM

First Advantage Pvt. Ltd is a company with 800 employees and

it is a developing company getting a new reputation in the field of

e-publishing. So it is very essential for the company to concentrate

in the employees commitment towards the work assessed for him. It

is also easier to find the employees satisfaction towards his job by

conducting a study on employee absenteeism which thereby helps

the company to retain its employee, since it is found that there isa low rate oflabor turnover in this company. So, this study will help

the company to adopt measures to reduce absenteeism and to

increase the employees commitment towards his job by knowing

the factors which remains as a hindrance for the employee to be

punctual towards hisjob.

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1.3 NEED FOR STUDY

One of the major problems affecting the precious resource of

any organization is absenteeism. Absenteeism is not only an

individual problem but also a social as well as economic problem of

our country. When absenteeism becomes a habit there is not only

general lowering of morale, but also results in loss and

deterioration of skill and efficiency. This may lead an organization

to attain reduced productivity. Decrease in production will affect theprofits of the company.

To control the rate of absenteeism we should know what absenteeism

is and study the factors such as personal factors, social factors and

environmental factors responsible for absenteeism. Reducing the rate

of absenteeism is not a simple task.

So, there is a great need for the research and analysis of

absenteeism in the organization.

1.4 OBJECTIVES OF THE STUDY

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To study the general causes for employee absenteeism

To analyze the workplace factors which leads to employeeabsenteeism in the organization?

To find out the most prominent general and work life factors that

leads to absenteeism in the organization

1.5 LIMITATIONS OF THE STUDY

The information provided by them may be subjected to personal bias.

Some ofthe respondents were not interested to express their views.

It is possible that some of the respondents feel that the management

has backed the studyand hence the reliability of the response.

Due to time constraints and busy schedules it was difficult to interact

with theemployees completely.

C H A P TER-2

PROFILE OF THE COMPANY16


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2.1Introduction

First Advantage Pvt. Ltd the largest provider of employment backgroundscreening services in the Asia Pacific region, now provides a full

spectrum of risk mitigating talent acquisition solutions.

Operating in Asia Pacific since 2000 and starting in Hong Kong, over the

last ten years we have seen expediential growth. First Advantage now

has 14 offices and over 1,600 employees in the Asia Pacific region

including Australia, China (Beijing, Shanghai and Zhuhai), Hong Kong,India (Mumbai, Chennai, Gurgaon and Bangalore), Japan, Korea,

Malaysia, Philippines and Singapore.

Widely recognized as the leader in background services in Asia Pacific,

by combing our global reach and local expertise, First Advantage has

now expanded its risk mitigating services to include solutions that

complement the expertise we have nurtured. Our comprehensive rangeof new solutions helps reduce the risk, time and cost associated with

recruiting, applicant tracking, and candidate screening. Learn

more about acquiring qualified, ready-to-work candidates.

2.2 Leadership team

Wayne Tollemache, CEO, FADVs core management group consists of

professionals with several years experience in the Backgroundverification industry. This group is backed up by a team ofaround 800

highly qualified professionals, working together effectively with a

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General shift- 9 am to 6 pm

First shift- 10 am to 2 pm

Second shift- 2 pm to 10 pmThird shift- 10 pm to 6 am

2.6 STRUCTURE OF HUMAN RESOURCE DEPARTMENT

eneral Manager

General Manager

Recruitment EmployeeRelations L & DAdmin

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Manager Manager Manager

nager

Senior Senior Senior Senior

Senior

Executive Executive Executive

Executive

Executive Executive Executive

Executive

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Senior executive

S

CHAPTER-3

REVIEW OF LITERATURE

THEORIES OF ABSENTEEISM:

Absence behavior is discussed in terms of theories on absences

such as the notion of the informal contract, perceived inequity, and

withdrawal from stressful work situations, dynamic conflict, social

exchange, withdrawal, non-attendance, organizationally excused

vs. Organizationally unexcused, involuntary v/s Voluntary and

lastly four-category taxonomy.

3.1 INFORMAL CONTRACT:

Gibsson (1966) attempted to explain some of the main features of

absence behaviour by means of the notion of an informal

contract. The contract is viewed as being made between the

individual and the organisation. Gibsson (1966) was especially

interested in absences that were no t long enough to activate

formal legitimising (certification) procedures. He used theconcept of valence, referring to a persons positive or negative

relationships to a work situation and pointed out that if the

combined valences of a work situation are weak, it will be easier for

people to legitimise their absences to themselves.


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Gibsson (1966) remarks that a plausible idea relating to the size

of the organisation influences absence rates; in largerorganisations, since there is greater division of labour, there is

also more concealment of the contributions of individuals, thus

permitting latitude for absence from work. He also mentions the

importance of the employees identification with the organisation,

as in the case of longer-service employees, and argues for the

importance of the authenticity of the work contract (Gibsson,

1966). In other words, the organisation should be seen to offer afair deal to the individual, whose feelings of obligation would thus

be strengthened.

In this research Gibssons (1966) concept of valence, referring to an

individuals positive and negative relationship toward a work

situation has relevance, as the aim of this research is to

determine whether work-related attitudes (Job Involvementand Organisational Commitment) predict employee absenteeism.

It is hy po thesise d that employees with low job involvement

and organizational commitment (negative relationship to the

work situations) will have higher levels ofabsenteeism.


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3.2 RESOLVING PERCIEVED INEQUITY:

Adams (1965), Hill and Trist (1953) and Patchen (1960) havemade notable theoretical contributions towards the study of

absenteeism. No recent literature has been identified which has

built on this perspective. Adams (1965) suggested that absences

may be a means of resolving perceived inequity; the probability of

absence behaviour will increase with the magnitude of inequity and

if other means of reducing inequity are not available. Patchen

(1960) had tested this kind of hypothesis; producing evidence of arelationship between absences and perceived fairness of pay, that

is, employees feelings about how fairly they had been treated in

regard to their pay levels and promotions.

3.3 WITHDRAWAL FROM THE STRESS OF WORKSITUATIONS:

In their study on absence, Hill and Trist (1953; 1962) contributed atheory of absence as being the withdrawal from the stress of work

situations. Withdrawal is the central explanatory concept; thus,

individuals experiencing conflicts of satisfaction and obligations

tend to express them through labor turnover, accidents, and

unsanctioned absences (this is, absences without formal

permission). In addition to the views of Hill and Trist (1962),

Hanisch and Hulin (1991) theorized that absenteeism andother withdrawal behaviors reflect invisible attitudes such as job

dissatisfaction, low level of organisational commitment, or an

intention to quit. According to this view, an employee who is absent

from work is consciously or unconsciously expressing negative

attachment to the organization.


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3.4 DYNAMIC CONFLICT:

The withdrawal explanation offered by Hill and Trist (1962) hadsome subsequent influence on theoretical discussions by s (1962)

and Knox (1961). Gadourek (1965) described the latter as

dynamic conflict theories. The conflict is located within the

individual, and whether a person stays or withdraws is the

result of a complex in incentives and stresses.

3.5 SOCIAL EXCHANGE:

Chadwick-Jones (1982) presented a case for the theory of

absenteeism that is social, not individual in emphasis. As a first

step Chadwick-Jones (1982) assumed the interdependency of

members of work organisations. It seems obvious that individuals do

have some mutual obligations to peers, subordinates, and superiors

(as well as other relationships outside the work situation). In thiscontext the rights and duties of individuals are both subject to, and

representative of, a set of rules about activities in the work situation.

What individuals do is therefore likely to be in answer to, on behalf

of, in defense of, as well as achieving a compromise with the rulesof

the group.

The second assumption made by Chadwick-Jones (1982), is thatunder the employment contract, some form o f soc ia l

exchange i s tak ing p lace between employers and

employees. Whatever they exchange in this situation whether it is

their time, effort, or skill or money, security, congenial friends or

anything else- it will be only what is possible for employees in

the organisation. Exchanges may be conceived as between

individuals and work groups, or between work groups andmanagement, but it would not be realistic to conceive of the

exchange between the individual and the organisation while


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disregarding the social conditions and rules.

Chadwick-Jones think of social exchange between employees

and employers as developing in, or as revealed by, a pattern ofbehaviour in the work situation that includes absences with all the

other factors that constitute the contract, formal and informal,

between employers and employees. Formal factors include pay,

hours, disciplinary rules, job duties, and promotion lines. Informal

ones include supervisory styles, peer group relations, and salient

to their analysis absence from work. Chadwick-Jones (1982)

however, do point out that absences may not enter into theexchange at all, insofar as some employees or employee groups,

especially those with higher status supervisors in factories,

managers in banks are absent very little or hardly at all. It is

quite possible, however, that managers possess greater control

over the allocation of their working time and may take periods of

time out that are not recorded.

3.6 WITHDRAWAL:

According to Chadwick-Jones (1982), absence from work, where

work is defined by the employees presence at a particular location

(office or workshop) for a fixed period each day, can be interpreted

as an individual act of choice between alternative activities; as

withdrawal or escape from surveillance; as individual or groupresistance to an inflexible system.

Thus, absence may also be viewed as a stratagem in inter-group

relations, as a defensive or aggressive act in inter-group conflict

(Chadwick-Jones et al., 1982). For the purpose of this research this

theory has relevance, as the reasons for absence behaviour

could be related to a choice of alternative activities instead of

attending work.


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3.7 NON-ATTENDANCE:

Another definition of absenteeism refers to the non-

attendance of employees for scheduled work (Gibons, 1966;Johns, 1978; Jones, 1971). The definition distinguishes absenteeism

from other forms of non-attendance that are arranged in

advanced (e.g. vacations) and specifically avoids judgments of

legitimacy associated with absent events that are implied by as

sick leave. This definitional emphasis seeks to focus on the key

organisational consequences of unscheduled non-attendance

instability in the supply oflabor to the organisation resulting in thedisruption of scheduled work processes and the loss of under

utilisation of productive capacity (Allen, 1981; Jones, 1971,

Nicholson,

1977). For this research this definition will be applicable, as the

researcher will not take into account absences due to vacation

leave and sick leave taken over more than three days.

3.8 EXCUSED VS UNEXCUSED:

In terms of distinguishing among types of absence, one simple

distinction that previous studies (Blau, 1985; Cheloha & Farr, 1980;

Firzgibbons & Moch, 1980) made is between organisationally

excused versus organisationally unexcused absences. Based on

these studies, it seems that organisations operationalise excusedabsence to include (within defined limits) categories such as

personal sickness, jury duty, religious holidays, funeral leave, and

transportation problems. However, as Johns and Nicholson

(1982) noted, absence behaviour can have a variety of meanings

for individuals. This research will focus on the organizationally

unexcused type ofabsenteeism.


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3.9 INVOLUNTARY VS VOLUNTARY:

March and Simon (1958) on the other hand, distinguishedbetween two basic types of absences: involuntary (e.g. Certified

sickness, funeral attendance) and voluntary (e.g. vocation,

uncertified sickness). Voluntary absences are under the direct

control of the employee and are frequently utilised for personal

aims. Conversely, involuntary absences are beyond the employees

immediate control. Hence, voluntary rather than involuntary

absences from work may reflect job dissatisfaction and lack ofcommitment to the organization.

3.10 A FOUR-CATEGORYTAXONOMY:

Blau and Boal (1987) presented a four-category taxonomy

describing the meanings of absence. These categories are medical,

career enhancing, normative and calculative. In the medicalcategory , absence is viewed as a response to various

infrequent and uncontrollable events (illness, injury, fatigue, and

family demands). If such an absence (medical) occurred, it

probably would be operationalised as a sporadically occurring

excused absence (Blau & Boal, 1987). In the career enhancing

category, absence is depicted as a mechanism that gives the

employee a further choice to pursue task- and career-relatedgoals.

For the normative category, absence is viewed less as a motivated

behaviour and more as a habitual response to the norms of the

work group (organisation) regarding absence (Blau & Boal, 1987).

As such, this type of absence probably would operationalise as a

consistently occurring excused absence. Thus, for this group, itwould be expected not only to predict frequency, but also when

absenteeism will happen.


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7. Communicating absence rates - 33%

8. Senior Management commitment - 27%

9. Performance appraisal - 26%

10. Team working - 21%

Jackson (1994) in study based upon a sample of 550employees found that the causes ofexcessive absenteeism were

as follows

A. Poor work habits 6%

B. Personal 9%

C. Dissatisfaction 16

D. Irresponsibility 17%E. Outside difficulties 17%

F. Sickness or fatigue 35%

1. Mann and Baumgartner (1952) report a study typical of the

University of Michigan Group. They compared the attitudes of high

and low absentee rate employees. The investigators found that amore favorable attitude toward supervisor and a more favorable

feeling about work associates accompanied lower absentee rates

for both blue and white-collar workers. According to their study

absenteeism rises as supervising quality decreases

2. In a study of absenteeism of 4 major textile mills in Delhi

covering a period of 4 years-1960 to 1963 Made by The Shri

Ram Centre for industrial relations, the following facts wererevealed.


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About 40% of total yearly absences occurred with the

permission ofmanagement.

About 25% were due to sickness and accidents and were granted by

ESI.

The remaining 35% were caused by workers unauthorized

absenteeism.


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CHAPTER-4

RESEARCH METHODOLOGY

4.1 Research Design

A research design is the arrangement of conditions for collection

and analysis data in a manner to combine relevance to the

researcher purpose with economy in procedure

It constitutes the blueprint for the collection, measurement and

analysis of data. As such design includes an outline of what the

researcher will do form writing the hypothesis and its operational

implications to the final analysis ofdata.

As such the design includes an outline of what the researcher will

do from writing the hypothesis and its operational implications to

the final analysis of data. More explicit, the decisions happen to bein respect of:

What is the study about?

Why is the study being made? Where will the study be carried out?

What type ofdata is required? Where can the datafound?

What periods of time will the study include? What will be the sample

design?

How will the data be analyzed?

In what style will the report be prepared?

What techniques of data collection will be used?


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The Research Design undertaken for the study is Descriptive one. A

study, which wants to portray the characteristics of a group or

individuals or situation, is known as Descriptive study. It is mostlyqualitative in nature. The main objective of Descriptive study is to

acquire knowledge.

4.2 Source ofData

Data are the raw materials in which marketing research works. The

task of data collection begins after research problem has beenidentified and research design is chalked out. Data collected are

classifiedinto primary and secondary data.

Primary data

In this study, the primary data is collected to understand the main

reasons behind the absenteeism of the employee. This is collectedusing a questionnaire specifically designed for the employees ofall

levels.

Secondary data

Secondary data were collected from the companys annual

publications, memorandums ofsettlements, newspapers, journals,websites, and from library books


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4.3 Sampling Methodology

Research work was conducted by taking a sample of 100

employees of 1300 (excluding apprentice trainees and contract

labors). To study the problem clearly numbers of employees

from each department were selected on the basis of the size of the

department as well as nature of the work. Questionnaires

were distributed to the employees individually and lot of

efforts had to be taken to collect the required data from theselected sample of employees representing the population.

The questions in the questionnaire are framed on the basis of the

factors responsible for absenteeism


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4.4 Description of statistical tools used

Percentage method

Percentage Analysis

In this project Percentage method test was used. The percentage

method is used to know the accurate percentages of the data we

took, it is easy to graph out through the percentages.The followingare the formula

No ofRespondent

Percentage of Respondent = x 100

Total no. ofRespondents

Weighted average method:

Weighted average can be defined as an average whose

component items are multiplied by certain values (weights) and

the aggregate of the products are divided by the total ofweights.

One of the limitations of simple arithmetic mean is that it gives

equal importance to all theitems of the distribution.

In certain cases relative importance of all the items in thedistribution is not the same. Where the importance of the items

varies it is essential to allocate weight applied but may vary in

different cases. Thus weight age is a number standing for the

relative importance of the items.


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CHAPTER-5

ANALYSIS AND INTERPRETATION

Analysis using simple random sampling Demographic

details:

AGE OF THE RESPONDENTS

Age No of Percentage

20-30 79 7931-40 19 19

41-50 2 2Total 100 100

Chart 5.1

20-30 31-40 41-50

INFERENCE

It is inferred that 79% of the employees who participated are in the

age group of20-30, 18% come under the category of 30-40 and

only 2% belongs to the categoryof40-50.


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SEX OF THE RESPONDENTS

Sex No of Percentage

Male 38 38Female 62 62

Total 100 100

Chart 5.2

SEX OF THE RESPONDENTS

male

38%

female

62%

m

INFERENCE

It has been inferred that 62% of the employees who participated in

the survey are female and the remaining 38% come under male

category


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MARITAL STATUS OF THE RESPONDENTS

Marital status No of PercentageSingle 64 64

Married 33 33Divorced 0 0

Widow(er) 3 3Total 100 100

Chart 5.3

MARITAL STATUS OF THE RESPONDENTS

single married Widow

INFERENCE

It has been inferred that 64% of the employees who participated in

the survey are single and 33% of the respondents are married. Rest

of them iscategorized under the category ofwidows.


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General causes for employee absenteeism:

Table 5.1

N

o

Causes Strongl

y

Agre

e

Neutr

al

Disagr

ee

Strongl

y

1

Other source ofincome

15 14 44 10 16

2 Higher studies 40 39 17 2 -

3 Time for

personal

41 20 22 14 -

4 Health

roblems

- 6 48 26 16

5 Employees

commitment

12 19 35 23 6

6 Transportation

problems

4 7 31 34 18

7 Family

responsibilities

8 1 11 41 32

8Lack ofinterest

31 23 11 15 12


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Chart 5.4

Other source ofincome

50

45

40

35

30

25

20

15

10

5

0

Strongly agree Agree Neutral Disagree Strongly disagree

INFERENCE

It has been inferred that 15% and 16% of the employees absent

themselves because of other businesses, since their income is

not enough for their family expenses. Whereas among the

remaining some are neutral and some strongly disagree to this

statement. This clearly shows that very minimum numbers ofpeople are engaged in some other business.


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Chart 5.5

Higher studies

45

40

35

30

25

20

15

10

5

0


INFERENCE

40% of the respondents strongly agree that they had to

concentrate in their higher studies which make them to take leave,

since most of the employees working in the organisation are

fresher, coming under the age group of 20-30 and they just work

here to gain some experience.

Chart 5.6


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60

50

40

30

20

10

0


INFERENCE

Most of the employees disagree to the fact that health problemsmake them absent from their work and only 6% of them agree that

their health gets affectedoften.

Chart 5.8

Employees commitment towards the work


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Strongly agree Agree Neutral Disagree Stronglydisagree

INFERENCE

Only 4% and 7% of the employees strongly agree and agree to thisstatement whereas the remaining are comfortable reaching theirworkplace since most of the employees recruited were residingclose to their workplace and most of them were found to have twowheelers and four wheelers.


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Chart 5.10

Work Vs Family responsibilities


INFERENCE

41% and 32% of the employees disagree and strongly disagree

that their work life is affected by their family responsibilities thisshows that they wereable to able their work and family because

the company doesnt give any home assignments and projects to

the employees.


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Chart 5.11

Lack ofinterest


INFERENCE

31% and 23% of the employees strongly agree and agree to the

statement that they are not into the right job since most of them

were engineering and science graduates who were doing the job of

diploma holders and typewriters.


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Chart 5.12

Employees Satisfaction towards thejob

30

25

20

15

10

5

0


INFERENCE

It has been inferred that 20% and 26% 0f the respondents were

dissatisfied with their job because most of them felt that they

didnt fit in with the task allotted to them and some felt that they

were dominated by their higher officials and didnt get anyfreedom to share their views.

Chart 5.13


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Stress level of the employees

70

60

50

40

30

20

10

0

Strongly Agree Agree Neutral Disagree Strongly disagree

INFERENCE

Nearly 58% and 22% of the respondents have agreed that their

work is heavy and tiresome which causes stress and due to stress

they absent themselves to relax. This was found to be the major

reason for most of the employees to beabsent.

Chart 5.14


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Salary and allowances

60

50

40

30

20

10

0


INFERENCE

50% and 27% of the employees feel that the salary given to them is

not satisfactory since their work is stressful and they dont get

any performance pay even if they work for overtime. They feel that

the work assessed to them is greater and their pay scale is lesser.

Chart 5.15

Loneliness at the workplace

45


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40

35

30

25

20

15

10

5

0


INFERENCE

Only 8% and 3% of the respondents feel lonely at their workplace.

This shows that this is a very minor reason for absenteeism in the

company. Because, most of the employees were from the samelocality and were found to have been college mates or

schoolmates.


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Chart 5.16

Boredom due to routine work

45

40

35

30

25

20

15

10

5

0


INFERENCE

41% agree and 12% strongly agree that the same routine

work allotted to them causes boredom towards their work which

makes them to absent. This will also lead to lack of interest

towards the work.


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Satisfaction with the welfare measures

60

50

40

30

20

10

0


INFERENCE

It has been found that only 2% of the employees are

dissatisfied with the welfare measures adopted by the company

and the rest of them strongly disagree to this statement.

Chart 5.19


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Shift basis - Drawback

45

40

35

30

25

20

15

10

5

0


INFERENCE

20% and 40% of the respondents agree and strongly agree to

that shift basis is a strong reason for their absence. This is

because 62% of the respondents who participated in the survey

were female, who feel that they are not comfortable with the

night shifts.

Chart 5.20

Lack ofmotivation


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INFERENCE

Only 11% and 28% of the respondents agree and strongly agree

that they dont get proper motivation from their superiors,

whereas 32% of the employees disagree to this statement.

Chart 5.21

Colleagues Co-operation


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INFERENCE

Only 11% of the respondents strongly agree that their

colleagues are not cooperative, whereas 60% of the

respondents disagree to this fact, so it is evident that this factor

doesnt play a major role in absenteeism.

Ranking the general causes using weighted average

method:

Table 5.3


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N Causes Total Averag Rank1 Other source of 299 2.99 4

2 Higher studies 411 4.11 1

3 Time for personal

activities

379 3.79 2

4 Health problems 236 2.36 6

5 Employees

commitment

293 2.93 5

6 Transportation

problems

227 2.27 7

7 Family 191 1.91 8

8 Lack ofinterest 322 3.22 3

INFERENCE:

From the above table we can infer that the reason of higher

studies was ranked first among the other causes, most of the

employees also feel that they dont get ample time for their

personal activities so it has been ranked second. Lack of

interest towards the job has been ranked third, since most of

them expect the right kind of job to be allotted to them.

Ranking the workplace factors using weighted average

method:

Table 5.4


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No Causes Total Averag Rank1 Employees 324 3.24 4

2 Stress level of the 421 4.21 1

3 Pay scale 410 4.10 2

4 Loneliness at the 247 2.47 7

5 Routine work causes 309 3.09 5

6 Working conditions 166 1.66 9

7 Welfare measures 165 1.65 10

8 Shift basis- Drawback 344 3.44 3

9 Lack ofmotivation 288 2.88 6

10 Colleagues co- 209 2.09 8

INFERENCE

The first main workplace factor was found to be the stress level

oftheemployees. It was also found that most of the employees

were not satisfied with their pay scale. Therefore it has been

ranked second. Shift basis was also found be the third main

reason for the employees absenteeism in this company.

CHAPTER-6

6.1 FINDINGS

General factors responsible for absenteeism:

Since most of the employees are working in a temporary basis


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groups at the end of every month

The people who are overqualified and not suitable for that

particular job should not be recruited.

The company should allot some time for entertainment in

addition to the lunch break and it was found that most of the

employees needed a break at least for alternate Saturdays.

The company can conduct performance appraisal once in 2

months. It can give overtime incentive for people who work forthe organisation in Saturdays. It should also revise and increase

the pay scale based on the profits of the company.

CHAPTER 7

FACTORS AFFECTING ATTRITION AND STRATEGIES OF

RETENTION

Why Do People leave Jobs?

There are various factors that affect an individuals decision to leave a

job. While an employees leaving the job is considered attrition by oneorganization, it is looked at as talent acquisition by the neworganization and to the individual it means a career move, economic


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growth and enhanced quality of life/convenience or closeness tofamily etc. Hence, what is a problem for one may be an opportunityfor another.

This short note examines the key reasons for attrition and exploreswhat enhances retention as well as outlines some of the factors thatcan control attrition. It also touches up those factors that are beyondones control.

Factors Affecting Attrition and Retention

There are various reasons why people leave their current job. Thesereasons may vary from individual to individual and when data arecollected from a large number of individuals leaving or who have leftan organization, some consistencies may be observed-providing moreinsights as to why people leave in large numbers. If these arecontrollable-one attempts to control. If these are not within the controlof the organization, the organization should prepare itself for

managing attrition.

Managing attrition does not mean reducing attrition only. It couldalso mean bringing down the negative affects of attrition andincreasing the positive affects of attrition. To increase the positiveeffects of attrition and reduce the negative affects, appropriateretention and capacity utilization or talent utilization tactics should beused. In one of the organizations, attrition has been used as brandbuilding opportunity. Thus an organization may say that we providetalent for other companies or they may say that if you join us yourbrand value goes up and you get good jobs etc.

Today when a person leaves it causes a lot of disturbances in theorganization. If it is a small organization the disturbance is evengreater. Hence it is important to understand and manage attrition.

There can be various reasons for people leaving their current jobs.

Some of these include:


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and want to achieve new heights in the shortest time. They haveeither been socialized so or fulfill their own power or other motives.Some may have a different motivation or value profile which may notbe matched by the current job or the company and hence the decision

to leave.

Job related factors: The job related factors that cause the decisionto leave are many these include the following:

1. Inability to use ones competencies

2. Lack of challenge3. Boss and his styles4. Lack of scope for growth in terms of position salary, status and

other factors5. Role clarity6. Job Stress or role stress or role stagnation7. Lack of independence or freedom and autonomy8. Lack of learning opportunities9. Lack of excitement and innovation, novelty etc. in the job

These factors may be intrinsic and job related or extrinsic and jobrelated or job chemistry related. Intrinsic factors are the factorsrelated to the characteristic of the job. These are in plenty in BPOswhere the work conditions (night work, work at odd hours, the natureof clients to deal with, etc) pose difficulties.

Extrinsic factors are factors like role clarity, independence andautonomy, bad boss, wrong chemistry of the team, work conditions

that can be changed easily, lack of respect shown to the individuals,etc. A large number of the extrinsic factors can be controlled.

Economic Factors: this deal with the aspirations in relation to salaryand perks, housing, quality of living, need for savings etc.

In addition to these there could be many other factors that affectdecisions:

Mobility of partner


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Fatigue

Family reasons like having to look after old parents

Factors affecting Individual decision to leave:

The factors can be classified as the following:

1. Individual related factors2. Role or job related factors3. Organization related factors

4. Professional factors5. Societal factors including Peer pressure factors and socio-

economic environment related factors

Some of the Potential methods of managing retention and employeeengagement or skill utilization include the following:


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First Find the Source of Attrition- where and why?

Any method of controlling attrition or increasing retention should bebased on a good understanding of the factors leading to attrition. Thefactors may be some times very simple and could be reveled by anexamination of the statistical data. The statistical data could answersimple questions like the following:

Where is the attrition occurring?

Is it more in males than females? What levels? Is there anything incommon among those who leave? Is it related to some disciplines orpeople from a particular region or linguistic group? Is it more amongcandidates from certain colleges or institutions? Age groups? Etc.Simple demographic analysis among those who leave could revealsome insights.

Once the source/cause of attrition is identified, solving the problembecomes relatively easy. At least the organization can then determineif any internal interventions will help reduce attrition. Some of thepossible interventions that could help in enhancing retention are asfollows:

Compensation, Financial restructuring and New Incentive

schemes- including Salary and perks restructuring, ESOPs, PLPs, etc.ILFS introduced a new Performance Linked pay in mid nineties tomanage retention at all levels. In this system all employees received aperformance linked pay at the end of the year depending on thecompany performance (financial), departmental performance andindividual performance. Combining all the three performance

parameters it was possible to get as much as a years salary or moreas PLP depending on the financial performance of the company.Introducing small recognition schemes may go a long way.


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Loyalty pay is a good mechanism of retaining the employee. In theloyalty pay the individual gets his share of the performance linked pay

or enhanced incentive pay proportionate to his stay. For example inthe ILFS case only a part of the PLP was given at the end of the firstyear and the remaining part is given proportionately at the end of thesecond and third years.

Organizations use most of the time compensation surveys and hike upthe salaries. The tendency to use Golden handcuffs with deferredcompensation, investment options etc. are useful. However in acompetitive world often they artificially hike up the salaries as the

recruiters also work out mechanisms of buying out such handcuffedpeople at any cost. Hot skills premium is paid by some companies forthose who have crucial skills in short supply. They premium can beremoved as the skill availability increases or the need goes down.

ESS and OC interventions: Organizational climate and employeesatisfaction surveys help in indicating the factors affecting attritionand help organizations take corrective action. In the case of one

manufacturing company a climate survey revealed the lack ofschooling facilities, commuting facilities to a nearby town; schoolingfacilities could improve the tenure of its employees. In another studythe technological innovations were found to create tension andresulting is decisions to leave in fresh and junior levels ofmanagement. Such climate schemes may indicate small things likeorganizational communications, social get together and celebrationscould inculcate a sense of identity and belonging ness and enhancethe we feeling and thereby retention. Climate surveys also indicate

those aspects of the personnel policies that need to be revamped forenhancing retention. In one company such a survey indicated that toomuch of differentiation and discrimination between the workmen andofficers in terms of the canteen food, leave facilities and other workconditions reduced the resentment to management an enhancedcommitment to the company. The attrition was more psychologicalthan physical in this company. Psychological attrition and retirementare particular problems in Indian PSUs.


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It is interesting to have such a program in an organization where thejobs are contractual. In a development organization it is considered allthe more essential to have motivated staff all the time.

Celebrations and Social and cultural Networks: By encouragingemployees to have picnics, social gatherings, celebrations andfestivals etc. we encourage some amount of social networking andsense of belonging ness. Tata and Birla group of companies are knownfor doing these in their own ways. Some of these organizations havecreated a sense of belongingness through their clubs, cultural forumsand group celebrations and activities. When the person and is family

feel at home with a company and have developed a social networkretention goes up. Loyalty to colleagues can be thus made asignificant retention force. New forums and methods need to bethought of to suit the requirements and chemistry of a given group.Thus in one case there may be an investment club, in another GolfClub, and a third cooperative society a fourth a charitable group toassist local community and so on.

Assimilation and Integration

Studies have linked the retention capacity of a firm to the inductionand assimilation process. The new Economy industry and theneed to be competitive require that the person needs to be

indicted into the company even before he/she joins it. If thenew employee joining at the top level joins the organization with fullunderstanding of the culture, and the role he is supposed to handle a

lot of employee turn over can be contained.

According to studies in the US while firms go to great lengths to hirenew employees, only 20% of them stay two years. Nearly 70% of thenewly hired seniors leave within two years .There is only a 50%chance that when some one takes up a new job he will be with thecompany for more than two years. In a 3 month period in the year2000 alone 350 CEOs in the US let their jobs. According to a HBR

article (2000, issue 78) 80% of a pool of executives changed their jobswithin two years. Another study reports that 47% of executivesappointed as presidents left within four years. In a study of 359


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positions listed in resumes it was found that 68% left their previousjobs within twelve months. (Smart, 1999)

Bradford Smart (1999) estimates that the cost of mis-hires areperhaps.. 40 times base cost at top levels. When you considerrecruiting, actual compensation expenditures, severance, andadditional cost of lost productivity, the time it takes for some one tobecome productive, business mistakes and missed opportunities etc.Research by Sibson & Co in four high turn over four high turn overindustries found that replacement costs have reduced the earningsand stock process by an average of 38%. The estimated cost of

replacement has to be multiplied at least three fold for every topleader who does not make it failed or left the origination)

Effects of losing a leader ripple through out the organization.

Loss affects the organization's competitive position due toleadership vacuum

Triggers turnover at other levels

Creates loss of developmental and intellectual resources Disrupts and weakens customer relationships

Employee turnover has a significant effect on companiesbottom-line by inhibiting their ability to keep current customers,acquire new ones, increase productivity, and pursue growthopportunities

People dont quit companies. They quit bosses. Numerous studies

have indicated the correlation between job satisfaction and directsupervisors and managers. According to new study 41% of high valueemployees who intend to leave their jobs are dissatisfied with theirmanagers or supervisors. Gallup of 2 million employees form 700companies indicated that strong links between employee tenure andemployee-supervisor relationships.

When a new leader joins the team they join three types:

Functional team they lead


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Executive team they collaborate with including the seniorleaders

Project related cross functional teams

When leader turnover is high the working alliances across theorganization are not in place long enough to embed anychanges that are introduced

The purpose of induction and assimilation therefore is to

ensure that leaders will adapt and become full contributors in

the new organization faster, better and with fewer

destabilizing effects to the individual and the organization.Asuccessful assimilation is one in which both the individual and

the organization are transformed for the better and are able

to leverage each others strengths to achieve mutually

beneficial goals. The individual and the organization need to

treat together for this purpose.

Assimilation of new leaders occurs in four stages: It begins with pointof hire and completes when the individual is a full contributor and nolonger an outsider. The assimilation journey is a continuousnegotiation between the two extremes and they need

To be balanced.

The balance needs to be between:

Being patient and becoming productive

Setting ones own pace versus following organizations pace

Trusting intuition versus making data based decisions Pleasing various stake holders versus meeting ones own

priorities

Implementing change versus respecting the culture of theorganization

Demonstrating competence versus seeking advice when oneneeds it

Building relationships based on trust versus testing assumptionsabout others

Intervening appropriately versus waiting until you have allinformation

Drawing on the past versus not letting the past bind you


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Acting with authority versus staying in learning ode

Not leading ego versus staying with confidence

Making your position clear versus seeking feedback

Affiliating with people versus maintaining boundaries

The HR Departments as well as the top management and other linemanager have a responsibility to ensure that the managers indicted atthe top levels assimilate the culture, role and other things of thecompany fast and manages the contradictions mentioned above. Thiswill only ensure that the retention is higher and top managementrecruited newly into the firm give their best and high ROI.

Assimilation is both fluid and dynamic. It can be influenced bydifferent factors at different points of time of the organizational lifecycle. New leaders are most likely to leave when they lack supportthey need to their best work. Attrition is usually the result of not beingable to contribute what they were hired to make. They are most likelyto stay if they feel a deep commitment and affiliation to anorganization.

Effective assimilation strategy:

Acknowledges difficulties of entry into a new organizations

Legitimizes and individuals adjustment period

Builds in multifaceted supporting mechanisms an institutionallevel (peer support, tips on bridging organizational knowledge,and learning gaps) to asset the new leader through the process

Assimilation savvy organizations should:

Focus on assimilation as a tool for retention and leadershipsstrategy

Have a formal system and program of assimilation

Use coaches for assimilation

Use HR for assimilation process


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sophisticated planning model that enables business managers todevelop highly targeted retention programs that create cost-effectivecontingency plans for filling potential gaps in skills. Prudential hasbegun to assess how long the organization would like the employees

to stay on board. They decide those whom the company wants tohave indefinitely, those who should be there for a shorter period andthose on whom retention investments dont make any sense. Thenthey use a number of mechanisms depending on the categories ofemployees. They tailor the programs for the retention requirementsrather than employing them across the board (Cappelli, 2000)

Job Design and OB Customization: This method involvesassessment of which tasks to be included in what jobs. For examplethe united parcel service mentioned earlier redesigned the job ofdrivers by separating the loading job from that of the drivers. Thoughit increased the turnover of the loaders it decreased the turn over ofdrivers which are considered an important role. The loaders could bereplaced with ease. Designing the jobs for specified periods of time isanother way of managing retention. If a person is appointed for aperiod of three years and the organization is prepared for the same

and the employee is also prepared part of the issues resolved. CAREIndia and many other international NGOs use this approach. Incustomization programs the employees are given scope to define theirjob after an assessment of their skills and interests. Key employeesmight undertake a formal self-assessment of their work and non-work

goals and how those goals could best be achieved in the context of

company; operations. The assessments would form the basis for

individual employment agreements, which might be created using

cafeteria-style programs similar to those in allocating employee

benefits (Cappelli, 2000 p 107).

Change of Styles through 360 Degree Feedback and Internal

Customer satisfaction Surveys: Some times the style of managermay be responsible for employees in certain departments to leave.With supportive managers and Head of departments employees thinkseveral times before they leave. Some managers may not realize thattheir coercive style, excessive task centeredness, and the way they

assign tasks including the clarity with which they give instructions,respect etc to employees have tremendous impact on their stayingwith the company. By recognizing the roles they play and the styles


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they exhibit and seeing the impact they are making senior managerscan at least reduce the push factors for attrition. There are severalcases of Senior Managers realizing the impact of their style in the 360degree Feedback programs conducted by TVRLS.


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Other Methods:

Start with recruitment. Dont recruit those people who will bethe most difficult to retain. Pay attention to this aspect fromrecruitment stage itself.

Adapt to Attrition. Attrition is the order of the day. Market forcesare too strong. Focus on what you can change. Dont focus onwhat you cant change and lose your sleep. Some times youdont have to recruit all high powered staff. In the olden dayssome of the business houses did not go to business schools

where the graduates are expensive and are job-hoppers. Theseincluded a highly rated business schools. They recruited fromthe less popular business schools and found them to contributea lot and stay loyal.

Simplify and standardize jobs and use multi-skills to help meetany contingencies.

Focus on retaining intellectual capital even when employeesleave. Think of appropriate mechanisms and buildorganizational memories and knowledge systems to retaintalent and intellectual capital. Teamwork task forces andstandardized systems help. IT support helps. Electronic recordsof employee knowledge helps in many cases.

Cooperate with competitors. Form clubs and associations.

Work with local schools and communities and develop a largesource of skill base by giving projects and grants to localcolleges.


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CHAPTER 8

ATTRITION RATE CALCULATION

(The formula and correct logic behind calculation ofATTRITIONRATE)

((no. Of attritions x 100) / (Actual Employees + New Joined)) /

100.

Examples:

1) Actual Employees No. Of people left No. Of Joined TotalEmployees

(Opening BAL) (Attritions)(Current Headcount)

150 20 25

155

So according to the formula: ((20 x 100) / (150 + 25)) / 100

Which comes to 0.1142 i.e. 11%

Now as you had 150 previously and now 25 joined so it makes 150 +25 =175

Now if you calculate 11.42% of 175 i.e. 175 x 0.1142 = 20


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CHAPTER-9

9.1 CONCLUSION

First Advantage Pvt. Ltd should be very cautious while recruiting

the employees. The company should not solely concentrate in

getting the work done by the employees; it should also give its

employees some time for fun and entertainment. Since this is a

fast developing company here in India, it has to look after that

its employees are satisfied with salary and compensation given

to them. The company can try adopting the suggestions givenabove to reduce absenteeism in the company. Since most if

the employees working here are coming under the age group

of 20-30, they will like to socialize in their weekends with their

friends or family, so the company can free them in their

Saturdays.

9.2 BIBILIOGRAPHY


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Aswathappa, Human Resource and Personnel

Management, Tata MC GRAW- Hill Publishing Company

limited.

Paneerselvam.R., Research Methodology Methods and

Techniques, Second Edition.

Likert Rensis, The Human Organisation published by Mc Graw

Hill Book Company Limited.

Flippo Edwin B Personnel Management published by Mc Graw

Hill Book Company Limited.

Tripathi P C Human Resource Development published by

Sultan Chand &Sons, Educational Publishers.

Tapomoy De b Strategic Ap p r oa c h e s t o H u m a nR e s o u r c e M a n a g e m e n t published by Atlantic publisher.

Dwivedi R . S ., H u m a n r e l a t i o n s a n d o r g a n i z a t i o n a l

b e h a v i o r , 5th edition, publisher by Beri fore Macmillan India

ltd., New Delhi.

Biswajeet pattanayak, Human resources management, secondedition, published by prenticeHall of India Private Ltd., New Delhi.

Lewis R. Gomez-Mejia, David B. Balkin, Robert L. Cardy,

Managing human resources,Third edition, published by rajiv Beri

fore Macmillan India ltd., New Delhi.

Websites:


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http :/ /ww w.ci te hr. c o m/regis ter .php?d o =si gnu p

htt p ://ww w .m a nag e m e n tp a r a d is e .c o m/fo r um s/a r c h iv e/ i n d e x .p h p/t-

13 788 .html

http :/ /ww w.sci en ce di re ct.com /

http :/ /ww w.a bsen te ei sm .co m/

http :/ /ww w.wi kiped i a.com/

http :/ /ww w.i nteg ra - i ndi a.c om/

http ://ww w.sc rib d. c om/

http :/ /ww w.o pp ape rs.c om /
http://www.citehr.com/register.phphttp://www.managementparadise.com/forums/archive/index.php/http://www.managementparadise.com/forums/archive/index.php/http://www.managementparadise.com/forums/archive/index.php/http://www.managementparadise.com/forums/archive/index.php/http://www.managementparadise.com/forums/archive/index.php/http://www.managementparadise.com/forums/archive/index.php/http://www.sciencedirect.com/http://www.sciencedirect.com/http://www.absenteeism.com/http://www.absenteeism.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.integra-india.com/http://www.integra-india.com/http://www.scribd.com/http://www.scribd.com/http://www.scribd.com/http://www.scribd.com/http://www.oppapers.com/http://www.managementparadise.com/forums/archive/index.php/http://www.sciencedirect.com/http://www.absenteeism.com/http://www.wikipedia.com/http://www.integra-india.com/http://www.scribd.com/http://www.oppapers.com/http://www.citehr.com/register.php


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ANEXXURE


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QUESTIONNAIRE:

A Study on Employee Absenteeism with reference to First

Advantage Pvt. Ltd, India

Name:

Age

a.) 20-30 b.) 31-40 c.) 41-50

Sex

a.) Male b.) Female

Marital Status

a.) Single b.) Married c.) Divorced d.) Widow(er)

General factors:

1. I have some other source of income which prompts me to take

leave

a.)Strongly agree b.)Agree c.) Neutral d.) Disagree e.) Strongly

disagree

2. I concentrate more on my higher studies when compared to

my work

a.) Strongly agree b.)Agree c.) Neutral d.) Disagree

e.) Strongly disagree


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3. I am not into the job assigned to me and I am seeking for the

appropriatejob



4. I dont get enough time to spend with my family

a.) Strongly agree b.) Agree c.) Neutral d.) Disagree


5. I feel that sickness makes me absent from workoften



6. I feel that my worklife is affected by the family responsibilities



7. I feel that my absence doesnt affect the companys output

a.) Strongly agree b.) Agree c.) Neutral d.) Disagreee.) Strongly disagree

8. I do absent myself often because of transportation problems




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Worklife factors:

1. I am not satisfied with my works

a.) Strongly agree b.)Agree c.) Neutral d.)Disagree

e) Strongly disagree

2. Stress is a part of my worklife

a.) Strongly agree b.) Agree c.) Neutral d.) Disagreee.) Strongly disagree

3. I am not satisfied with the salary and allowances



4. I feel lonely while working with others (in your workplace)



5. I feel bored with the same routine work

a.) Strongly agree b.)Agree c.) Neutral d.)Disagree

e.)Strongly disagree


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6. I dont feel satisfied with the existing working condition

a.) Strongly agree b.) Agree c.)Neutral d.) Disagree


7. I am not satisfied with the welfare measures adopted by the

company

a.) Strongly agree b.) Agree c.)Neutral d.) Disagree


8. Shift basis is a stumbling block for my regularity

a.) Strongly agree b.) Agree c.) Neutral d) Disagree


9. I dont get proper motivation from my superiors



10. I am not getting sufficient co-operation from my colleagues




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Any other reasons, for your absence, please specify

Any suggestions to reduce absenteeism in your company

.

updated project final

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