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Psychological Contract: Investigating Absenteeism 1
The Psychological Contract: Investigating Absenteeism
Danielle Cloutier
Winona State University
MGMT317: Human Resources
Dr. Jana Craft
Psychological Contract: Investigating Absenteeism 2
Abstract:
Absenteeism takes a major toll on businesses causing them to lose employees for a period
of time, which leads to increased costs and decreased productivity. Absenteeism is a silent killer
that causes organizations to incur many indirect costs such as lower performance, training new
employees, and overtime pay for those that pick up the slack. An unspoken psychological
contract plays a large role in shaping the culture of the company, which is a major determinant in
absenteeism. In addition, it is the link that connects an employee and employer together by
establishing what is expected of the employee and what the employer will give in return, all be it
unspoken. There are five main reasons for absenteeism: illness, mental health, family balance,
entitlement, and job dissatisfaction. This paper will examine how three different organizations
dealt with absenteeism differently and the reasons why. Based on the research and interviews
conducted, I found that entitlement is not seen in many organizations, yet in the research, it is
documented that it causes about 15% of absences. In addition, depending on whether a company
is in the public or private sector, gives us insight into the level of absenteeism and the risk
associated with being absent. All the other areas were consistent between the literature and
interviews.
Key Terms: Absenteeism, Psychological Contract, Motivation, job dissatisfaction, entitlement,
Employee Assistance Program, management, culture
Psychological Contract: Investigating Absenteeism 3
The Psychological Contract: Investigating Absenteeism
Absenteeism takes a major toll on businesses causing them to lose employees for a period
of time, which leads to increased costs and decreased productivity. “In terms of straightforward
expenses, recent surveys estimated that time-off costs from annual payroll have, risen to about
$40 billion” (Burton, Lee & Holtom, 2002, p. 181). “Even more important, direct financial losses
that are associated with absenteeism fail to capture considerable indirect costs that are attributed
to excessive absenteeism such as wages for replacement workers, overtime pay, and lower
performance.” (Mayfield & Mayfield, 2009, p.455-6). Absenteeism is one of the silent killers
that many companies fail to notice when it is happening, and that is because of the mindset
employees have on the issue. It is common for employees to think, I will not go to work today,
they won’t miss me, or it won’t harm the business, I will just say that I am sick, but like
dominoes if every person thinks this, one domino falls and the rest go with it, ultimately hurting
the business as a whole. When an employee is absent, their productivity is reduced to zero
(Rogers & Herting, 1993). For this reason, it is necessary to put a plan in place tailored to your
specific company that will eliminate the costs of absenteeism; the level of risk and effect the
absent individual has on the company will play a large role in the degree of punishment.
I have personally witnessed this in my fraternity. It is my job, as the Vice President of
Chapter Operations, to notice those that are absent often and to confront them so we become the
best fraternity possible. It is hard to get people motivated to come if they do not have it within
them, but that is exactly what businesses need to do to decrease absenteeism. The importance of
noting this is that the culture of the company plays a major role in absenteeism
Psychological Contract: Investigating Absenteeism 4
Literature Review
Psychological Contract:
The psychological contract plays a large role in shaping the environment and culture in
the workplace. The psychological contract is defined as, “the overall set of expectations held by
the employee with regard to what he or she will contribute to the organization and that are held
by the organization with regard to what it will provide to the individual in return” (DeNisi &
Griffin, 2006, p.15). The psychological contract sets the tone within the organization. If both
sides (manager and employee) keep up their side of the deal, they gain mutual trust, leading to
more productivity. On the other hand, if there is a breach in the contract it leads to decreased
trust and cooperation because they feel that their presence does not matter, ultimately leading to
betrayal. “Psychological contract breach was related to lower organizational trust, which, in turn
was associated with perceptions of less cooperative employment relations and higher levels of
absenteeism” (Deery, Iverson & Walsh, 2006, p. 166). Abu-Doleh and Hammou also include that
a breach will result in decreased job dissatisfaction, decreased commitment to the company,
decreased performance, and one’s personal beliefs of the company (2015, 39-41). Job
dissatisfaction will be talked about in more detail later, and is one of the biggest reasons why
employees are absent. One’s personal beliefs of the company could also change, which proves or
makes them feel that there is unfairness in the workplace, which turns them against the culture
and company. Therefore, there is an important connection between the psychological contract
and absenteeism, and without the psychological contract, many employees would not understand
the consequences of absenteeism.
Issues in the psychological contract, including leadership style, values, relationships,
work conditions, benefits, and perception of importance. When the leaders of an organization are
Psychological Contract: Investigating Absenteeism 5
acting a certain way then those below them tend to pick up the habits; if the manager is doing it
then others will deem it acceptable. The values of the corporation affect the attitude that an
employee has towards the business. Although it is not common for many people to work for an
organization that does not align with their values, it is a possibility, and this can lead to
disengagement, and lack of desire to grow. If the employees do not see the values as guiding
points, and/or stimulate their ambition to give a hundred and ten percent the company will fail to
live up to their values, leaving a gap in the corporations goals. In addition, it is important not to
leave any employees behind, leaving them to be lost or not feeling needed. The environment of
the working conditions plays a large role as well. It is essential that environment is suited to the
task to ensure efficiency and teamwork. Depending on whether or not the ambiance is
welcoming, or if the employees feel they are just another number determines the effort they put
in. If they feel a part of the whole, they will want to contribute to the success, where as if it is not
welcoming they will not feel as if their input matters. If a strong and positive culture is not
present, it will lead to high levels of absenteeism and other related issues. The overall goal of the
psychological contract is to ensure that all employees are working towards the same goals within
the organization while also being effective. When all of these are met it creates for a satisfied and
healthy work environments where work can be completed successfully. Ultimately, it is the link
between the employee and organization.
Absenteeism
Absenteeism is a major problem in organizations that leads to high costs, and there are
many sources of absenteeism. Absenteeism is “any failure to report for or remain at work as
scheduled, regardless of the reason” (Mayfield & Mayfield, 2009, p. 457). Today it is more
common to see absenteeism in the workplace because of the drastic change from a
Psychological Contract: Investigating Absenteeism 6
predominantly male workplace. Since women are not choosing to be stay at home moms, they
have to leave their job to take care of their kids, attend events for them, and also take care of
their parents; all leading to higher levels of absenteeism. Also, there is less loyalty in the
workplace. The average employee changes jobs eight to ten times in their life. Due to this,
employees must create their own security, meaning they are more concerned about their self than
the company as a whole; this means less attachment to the company (Kramer & Neidtz, 1997).
“Absence is influenced by social consensus both inside and outside the workplace”
(Nicholson & Johns, 1985, p.397); this is demonstrated through a multiplicity of reasons for
being absent. “Fifty-two percent of total employee absences are discretionary in nature. These
absences are the result of factors such as stress, personal needs, and entitlement mentality,”
(Mayfield & Mayfield, 2009, p.457). In addition to personal needs, stress, and entitlement
mentality, absenteeism relates to health issues, family issues, and dissatisfaction on the job as
well. “It is estimated that only 35 percent of unscheduled absences are due to illness, while 65
percent of absences are for other reasons, such as family issues (20 percent), personal needs (20
percent), entitlement mentality (15 percent), and stress (10 percent)” (Veazie, 2011, p.7).
Health and Family Issues
Health issues include anything from being sick to dental reasons, etc. Burton, Lee, and
Holtom (2002) found that, “absence due to illness may not strictly represent involuntary
absenteeism but rather may be voluntary in nature.” (p.183). This is the problem of cheating the
system, and for that reason it is hard to monitor or regulate it, since the psychological contract is
formulated on the basis of trust. Deery, Iverson, and Walsh (2006) reflected this by saying,
“Trust reflects a confidence between the parties that they will not be harmed or put at risk by the
actions of the other party and that neither party to the exchange will exploit the other’s
Psychological Contract: Investigating Absenteeism 7
vulnerability.” (p. 167). Family issues deal with children or spouse being sick, having to take
care of sick or dying parents or relatives, funerals, etc. . It has become the norm to call into work
and use the excuse that I am sick, but what is failed to be realized is the amount of money that
the company is losing by one employee being gone. These are two of the more straightforward
reasons for people being absent, and the reasons most typically heard of; this is because they are
more socially acceptable.
Personal Needs
Absenteeism also comes from personal needs or problems, which includes things such as,
stress, drug or alcohol abuse, depression and mental illness, etc. According to DeNisi and Griffin
(2006), stress, “is a person’s adaptive response to a stimulus that places excessive psychological
or physical demands on him or her” (p.273). Stress can be caused by many factors including:
task demands, physical demands, role demands, and interpersonal demands; these are stressors
related to work. Stress outside of work can be due to life changes or traumas. In an
organizational setting, it can cause a decline in performance, absenteeism, turnover, and
decreased motivation. It can lead to other personal problems such as drug abuse, smoking,
alcohol, etc. (DeNisi & Griffin, 2006, p.275). Drug and alcohol abuse can cause impairment on
the job and increased absences due to lack of mobility and thinking skills. There are wellness
programs in place that can help individuals deal with these issues. The main one is the Employee
Assistance Program for drugs and alcohol, stress management, and other things. This is one of
the more difficult absences to decrease, but it goes back to combatting absenteeism with positive
feedback and the psychological contract. Also, it is important that other employees and managers
Psychological Contract: Investigating Absenteeism 8
observe the behavior of employees, in order to notice if there is anything that seems out of the
blue, so that they can provide the help before the number of absences increase
Dissatisfaction
Dissatisfaction is also a leading cause of absenteeism, because if a worker does not feel
they are getting any benefit out of their job they will be absent more often since work is not a
priority, and it does not matter to them if they lose their job. Reasons for job dissatisfaction
include the nature of the work, pay and benefits, and relationships with supervisors and co-
workers. The effects of job dissatisfaction can range from a variety of different things, decrease
in organizational commitment, decrease in organizational citizenship behaviors, and less of a
positive feeling connected to the business which could lead to negative word of mouth (DeNisi
& Griffin, 2006, p. 134-35). “A strong relationship exists between job dissatisfaction and
absenteeism, partly because employees who are dissatisfied may not always be able to leave their
jobs…In addition, it is possible to withdraw even more gradually by simply being late.” (DeNisi
& Griffin, 2006, p. 134). The organization has a large say in changing the outcomes associated
with dissatisfaction because it is an internal cause. This is the biggest area that the psychological
contract needs to be concerned with; whether it be the leadership style, benefits or aligning
values so that not only absenteeism, but turnover as well is decreased.
Entitlement
Last, entitlement is when someone feels that they are above others or hold enough power
(essentially, they believe they are better than the rest of their employees) that it is not necessary
for them to show up to work. Entitlement is thought to come from those employees that hold top
management positions, but this is not always true, it can come from those below that feel they
Psychological Contract: Investigating Absenteeism 9
are not being valued to the level they deserve. As stated in the introduction, absenteeism is a
domino effect, but for more than just the fact that others will follow. “Increased absenteeism by
some worker could lead to an increased work-load among coworkers. As a consequence, workers
could be required to spend more of their personal time at work doing extra unscheduled hours”
(Camden & Ludwig, 2013, p. 168). If the co-workers have to pick up the slack, it could result in
them taking days off to rejuvenate and decreased morale. Decreased morale leads to larger issues
such as burnout. No matter what the reason is for an employee to be absent it is important to note
that these absences have a significant impact on the company’s overall well-being.
Combatting Absenteeism
There are multiple reasons why people are absent as stated above. Ideally, a company
will have benefits (pay, opportunities, and sick leave), employee programs, and a proactive
leadership style and strategies that will help them combat rising absenteeism. Even though
absenteeism can be a silent killer, one important take away from monitoring absences is, it
predicts individuals that will leave soon. Nicholson, Brown, and Chadwick-Jones (1977) stated,
“(a) a tendency for “leavers” to have higher absences rates than matched groups of “stayers”, (b)
a tendency for individual absences rates to rise immediately prior to the act of quitting, (c) a
tendency for group turnover and absence rates to be positively correlated over time.” (p.321); the
key to combatting something is knowing when it is going to happen. It is important to notice how
medical, government, and small businesses deal with absenteeism differently, and how their
psychological contract and documentation of absenteeism leads to the required behavior. “To
remain competitive in a global economy employers must implement effective programs to stem
escalating disability claims and increased costly absenteeism” (Kramer & Neiditz, 1997, p.58).
As stated previously, the leadership style that one exerts will have a large effect on how the
Psychological Contract: Investigating Absenteeism 10
employees view the company; therefore, it is essential to be there for ones employees, while also
being a leader. In addition, they should have employee programs in place to show that they care,
and help prevent future costs related to alcohol abuse, stress, etc. Essentially, businesses need to
have a procedure in place to deal with the issues at hand.
According to Marisa Warford, one way to decrease unscheduled absences is by using a
paid time off system versus a traditional leave program (2014, p.28). In the paid time off system,
it allows for a set number of days off during the year, instead of in the traditional leave program
it is broken out into sick days and vacation days. Warford states that some of the advantages
associated with PTO programs are decreased unscheduled absences, decreased productivity costs
and losses, empowers employees to make their own decisions, and the flexibility related to it
(2014, p.28). As stated above, with more women working there has been an increased liking to
having work balance and flexibility. The flexibility is a great attribute for people with sick
parents, kids, etc. By allowing people to decide when to take their absences also entails a sense
of trust on the employees. This trust and power will hopefully cut absences and create for a
stronger workforce.
Corrective action plans need to be in place in order to deal with rising absenteeism. These
guidelines need to be laid out in the Employee Handbook, in addition to the unspoken rules
found in the psychological contract. By having a plan in place to deal with rising absenteeism
will decrease the long term affects that come with it. Also, it creates a standard that will
hopefully prevent something from happening in the first place. These plans should entail
information about when/who to contact if one knows they are going to be absent, how many
hours they will receive to be absent, and the consequences related to being absent too frequently.
Psychological Contract: Investigating Absenteeism 11
Practical Application
Absenteeism will be evaluated in three different types of businesses: medical,
government, and small business. The significance of this comparison is to understand how
varying organizations deal with absenteeism and to what degree of seriousness they take. The
three interviewees are Sheila Finley from the Mayo Clinic in Rochester, Minnesota, Brian
Osborn from the Federal Prison in Rochester, Minnesota, and Jake Schmidt from Clement’s
Chevrolet in Rochester, Minnesota.
The first person interviewed was Sheila Finely. She works at the Mayo Clinic as the
Senior Human Resources Service Partner. She has been a part of the Mayo Clinic since 2001 but
has been working in HR since 1988. She has held many positions within HR that have led her to
hold this top position. With her knowledge and certification, it makes her a very reliable source,
since she has seen it from many different sides of the business, along with having a vast amount
of knowledge. Second, I interviewed Brian Osborn who is the Human Resource facilitator at the
Federal Prison in Rochester, Minnesota. He started out as a correctional officer for a few years,
and then found himself in the human resource department, where he has been for fifteen years.
Throughout the fifteen years, he worked at five different places, but this is what makes him well-
rounded in the field. Last, I interviewed Jake Schmidt from Clement’s Chevrolet. Jake’s current
position is to handle IT, human resources, and accounting issues. He has been a part of the
company for ten years, while serving for three years in his current position. Before his current
position, and the reason for him being hired, was to assist their sales management team to help
them reach internal and external sales goals. He is an important asset to my research because he
has seen the company from both sides (management and a typical employee). Also, just last year,
Clement’s underwent a change within their company that drastically changed the policies and
Psychological Contract: Investigating Absenteeism 12
culture, which is useful in understanding how change and new programs can lead to positive or
negative impacts.
Medical Field
First, I will look at each issue stated above in the medical field by using the Mayo
Clinic’s point of view for dealing with absenteeism. It is important to note the culture present at
the Mayo Clinic and whether they focus on written or unwritten rules. The Mayo Clinic uses
their written rules as the policies that guide their employees to be successful; it is not abnormal
that they focus more on written guidelines because they are specifically concerned with their
patients, and there is a very small gap for error; attendance is crucial for delivering quality
patient care. If they do not show up on time then there is a progressive corrective action process
to address the problems. Finley refers to the unwritten rules to be that of peer pressure and
morale of other co-workers in the department. There are no rewards set in place to reward those
that are present the majority of the time besides the use of positive feedback. It is important to
notice that every person sees a “reward” as something different, and it is up to the leader or
manager to notice this and make accommodations accordingly. In order to address the issue, they
use a typical system where the managers have a verbal conversation with the employee to
address the circumstances. They question why they have been absent, and if there is anything
that they can do in order to help better suit them. If there is a job disconnect that is resulting in
the high levels of absenteeism, then this is when a teacher-student moment takes place. In this
moment, they reinforce why their position in the company is so vital to the overall well-being of
the company but also to the clients/patients they are representing. Managing each employee as an
individual with different needs is important, and supervisors may encourage the employee to
contact the “Employee Assistance Program”; master degreed employee assistance professionals
Psychological Contract: Investigating Absenteeism 13
staff this program. Services provided include relationships, substance abuse, co-worker relations,
workplace issues, depression and stress. If the manager cannot obtain any information then it is
out of their control, and they must just note to them the importance of their attendance.
Especially in a medical field, it is essential to note that the absences affect those around
them. When I asked Finley how it affected the other employees, Finley stated that it greatly
decreased the morale of other employees because they were tired of picking up the slack for
those individuals. The issue of entitlement that was discussed in the literature review is not
typically seen at the Mayo Clinic. Most of the managers and top leaders are committed to the
success of the organization. She did state though that some employees can feel a sense of
entitlement, but overall only about five percent of their employees have behavioral and
attendance problems. In a medical field, the issue of absenteeism is not highly seen, and I believe
this is due to the high risks related to the type of work they do and because it affects multiple
individuals. In addition, the Mayo Clinic adheres to strict rules and guidelines that drive the
employees to live up to those standards. The Mayo Clinic also incorporates a manager tool,
which includes a systemic application of applied behavior analysis to maximize human
performance in the workplace, identified by both the presence of discretionary effort and a
positive environment.
Government
The second industry is government. I used the Federal Prison located in Rochester,
Minnesota. The most typical reason for employees to be absent is due to sickness or so they
state. To decrease the abuse of being “sick”, they use a system that allows them to require a sick
not every time they are absent for an illness. This appears to be excessive, but in such an
influential agency, it important that no one abuses his or her power, therefore if one decides to be
Psychological Contract: Investigating Absenteeism 14
absent too often this action is necessary. Another corrective action taken for sick leave is that if
one is gone for more than three days, a sick note is automatically required. Last, they can put
them on “Absent Without Leave,” which keeps the employee from being paid and could lead to
possible suspension. On the other hand, although there are no rewards set in place for those that
come to work often, if an individual has built up enough sick days they can use them toward
their retirement. They focus on leading based off known standards; therefore, the leaders lead by
example. It is also important to take a personal interest into their life to decrease the level of job
dissatisfaction. Since job dissatisfaction leads to less productivity, it is essential that this does not
happen in a prison where safety is key. Compared to the medical field there are more eyes on the
employees in the Federal Prison as to why they are absent. It is not frowned upon to monitor
their employees because they want to solve every problem in a timely manner. There are tests in
place that can determine if the employee is still competent to work there. One is the fitness for
duty test, which is designed to continually check their potential. If they do not meet the
requirements, they are to leave their service; the government holds their employees to high
standards. Those at the top have earned that position rightfully and it is less likely to see those
individuals absent. They want to increase the morale, and when many are absent there is a
decrease in morale, and for that reason, they try to decrease activities that could lead to it.
Small Business
Third, the examination of small businesses, which will help to see the difference between
public and private organizations. Currently, there are no major absentee issues at Clement’s, but
they have the guidelines related to absenteeism laid out in the employee handbook. They realize
that every person is different but at the end of the day, every employee is expected to be at work.
The two main issues seen in their workplace when absenteeism is present, according to Schmidt,
Psychological Contract: Investigating Absenteeism 15
is sick leave and job dissatisfaction or disengagement. It may appear to be more difficult to
examine the level of education and skills present here because their employees hold white-collar,
blue-collar, and no collar positions; yet, every employee’s treatment is still the same, which is
essential to the success of their company. If they all were treated differently, it would cause a lot
of controversy within the organization. The first step taken to address the issue is communication
through their direct supervisor, and then if the issue were not resolved it would go to Schmidt. At
this point, it becomes a more serious problem, and if there is no correction than all the corrective
actions that lead up to termination are complete and the employee can be fired. To compensate
employees for showing up, they become the first ones in line for promotions and compensation
increases. Within the last year, they have adapted a new monitoring system to tell when people
are absent. This new system has also changed the culture in Clement’s. Prior to the change, there
were a lot more absences, and the culture in the business was less inviting. They have switched
to using a third party payroll website that documents every aspect of employment from hiring to
retirement that sends out weekly, monthly, quarterly, and annual reports. This decreases the
chance of cheating the system. This system allows them to better manage their financial
statements and personnel expenses in order to closely monitor the cost of absenteeism. Since the
change, they have also switched to having the department manager approving the time sheets
versus having an employee that sits in the corner collect them; this decreases the number of
nuances that individuals can get away with, since the department manager will already have a
tight eye on them.
One plus to having so many different types of workers in the business is that many of the
individuals are cross-trained meaning that they are able to complete more than just their specific
job. Although this is helpful, it is also only a temporary solution. Jake stated, “Absenteeism is
Psychological Contract: Investigating Absenteeism 16
very expensive. Personnel expenses can get out of hand rather quickly if absenteeism is not dealt
with quickly and efficiently. It also puts unwarranted stress on the staff trying to fill the void left
by a person missing work.” As the other two companies have stated, those at the top do not feel a
sense of entitlement, but instead they feel that they are greatly invested in the business therefore
they must lead by example; Jake states that this is starting to work, for the employees are
becoming more engaged, but it is not quite fully there yet.
Employee Perspective
Now that we have heard from the Human Resource Managers in each corporation, it is
important to note whether those working in the lower positions have the same outlook on the
company. I was lucky enough to be able to get this from two of the three organizations: medical
and small business. Sue Cloutier from the Mayo Clinic (Operations Manager) stated that she felt
the policy is fair and well written to combat the difficulties seen at the Mayo Clinic. She also
commented that it gives a clear direction for the managers to follow, and since the policy is very
descriptive and definite there are no grey areas, meaning those in lower positons can easily
understand it and will not be blindsided. Once one reaches ten strikes or unregulated absences
they will no longer have a job. She stated that she is lucky enough to enjoy her job and feels
many of the other individuals there feel the same way. She has called in sick only five times in
the past twenty-five years that she has been there. This remarkable statistic shows that the
employees that work at the Mayo Clinic are satisfied, which leads to decreased absenteeism.
Scott Cloutier, who works at Clement’s Chevrolet, as the General Sales Manager works
directly with the employees that sell the cars. Since their company’s change, it has allowed the
employees thirty days of paid time off; versus the three weeks they had, but before those days
did not include sick days. After the owners implemented this new plan, it held the employees
Psychological Contract: Investigating Absenteeism 17
more accountable for their attendance and less likely just to take a sick day for no reason. He
does see that the consequences related to absenteeism are not always followed through with.
They can still take days off that they are not paid for, and since the sales people are paid on
commission it does not greatly affect the company. Essentially for them being absent is the
equivalent of having no customers come in that day which is plausible. He also sees a lot of job
dissatisfaction within the business and believes this is due to the large communication gap
between those at the top and those at the bottom. In addition, the pay plans continually change
which leads to inconsistency. This is irritating to employees. What leaders believe to be true is
not always a direct reflection of what the employees are feeling; this disconnect can cause many
problems.
Discussion
Based off the research done through scholarly articles and interviews from three different
people, in three different businesses, there are many discrepancies between the readings and
actual businesses. Along with this idea is also the discussion of how each corporation deals with
absenteeism differently. I will also relate it back to my fraternity and provide the organizations
with one modification that I feel will be helpful in continuing to combat absenteeism. These
ideas will be the focus of my discussion.
The first idea that needs to be analyzed is the difference between how medical,
government, and small businesses differ on how they deal with absenteeism and the level of
absenteeism present in their organization. The biggest difference I found was since medical and
government agencies are public sectors they have more regulations that guide them and affect
more people directly. On the other hand, Clement’s is a small business that is tailored to fit to
their own needs. In my research, I found that it is more typical for there to be higher levels of
Psychological Contract: Investigating Absenteeism 18
absenteeism within the public sectors; this is the first point that I found different from the
research I completed.
Second, I found that entitlement seemed to be a large issue related to absenteeism (15%
according to Veazie, 2011), yet throughout the interviews not one company saw that as a large
threat or reason for employees to be absent. This is huge, especially since I expected to find that
more corporations would have this problem. This brings us to the question of whether it is the
management in play or more closely linked to their mindset that they have come so far. I believe
that since they have earned their position they wish to bring their knowledge to others (invested
in the company), and in return this affects those below them, leading to good leadership.
Another key difference that leads to why the three businesses have different plans in
place is due to the level of risk associated with each company. Like the variation between public
and private sector, again in the government and medical field there are higher risks and stakes
associated with their work. It is evident through their strict and strongly enforceable policies that
they mean business and expect 100% out of their employees. This is not to say that small
businesses do not have similar expectations, but especially with Clement’s as an example, the
majority of their employees are paid based on commission and the individual themselves take the
risk for their own personal gain by being absent versus the company as a whole. It is very likely
that even if they were not there the sale would still be made, which is ultimately the end goal,
and it does not matter which salesperson reaches it. In comparison, at the Federal Prison and the
Mayo Clinic, if an individual were to be gone the paperwork would pile up, and the tasks they
were assigned that day would not be completed. While at Clement’s, another salesperson can
complete the sale for an absent individual. This is not quite as easy in the Federal Prison and
Mayo Clinic. In the Federal Prison and Mayo Clinic, each person is hired for a different reason,
Psychological Contract: Investigating Absenteeism 19
and although other employees would probably have the skills necessary to complete the tasks it
would increase workload and stress.
In response to having a desire to write this paper because I was seeing
absenteeism issues in my fraternity, I have learned that there are many ways to decrease
absenteeism, yet I have also seen many of the reasons why people are absent as well. I think the
biggest reasons people are not showing up based off of the issues that I discussed is because of a
disconnect and dissatisfaction with what we are doing. It is hard as college students to get our
peers engaged. Most of the time people do not show up is because they feel that they have better
things to do, or what we are doing will not affect them later on, therefore, it is not important
now. The biggest thing we can do to decrease this disconnect is to continue have the leaders of
the fraternity show up to all events, constantly remind them of the dates, and express to them the
importance of showing up not only for their own personal growth but ours as a fraternity. We
also greatly focused on the why this semester to push people to see the advantage gained from
the experience. Another form of implementation that took place this semester was the focus on
committees. Instead of having the people with positions do all the works we focused more on
including everyone in the decisions. In addition, through this it got people involved in areas that
they felt would be most rewarding and that they were interested in. It may have not increased
overall attendance, but it pushed people to attempt to get more involved, and share their ideas to
make our fraternity better off. Another change that was made was doing projects that affected the
community; this increased the social responsibility felt by many which made them want to
attend. After all this changes are made, there is not much else we can do because we have taken
all the necessary steps as leaders to try to engage them. The rest is up to them.
Psychological Contract: Investigating Absenteeism 20
Last, I wish to give the three organizations a tip that I think would be helpful for them to
decrease absenteeism even further. I think it is important to note that none of the companies had
a reward system in place to award those that are present often, and I think this is something they
should look into to give their employees a bit more incentive. These rewards do not have to be
drastic just something that increases motivation even further in their employees.
In conclusion, absenteeism is a major problem, but many companies are dealing with the
pressing issues well. They have strong systems in place to measure the costs related to
absenteeism, and corrective plans in place to deal with those employees that are experiencing
high levels of absenteeism. It is essential that management monitors the changes that are
occurring so they can continue to accommodate their culture and provide benefit plans to meet
the needs and wants of future employees to eliminate unwanted absences all together.
Psychological Contract: Investigating Absenteeism 21
References:
Abu-Doleh, J., & Hammou, M. D. (2015). The impact of psychological contract breach on
organizational outcomes: The moderating role of personal beliefs. Journal of
Competitiveness Studies, 23(1), 34-54.
Burton, J. P., Lee, T. W., & Holtom, B. C. (2002). The influence of motivation to attend, ability
to attend, and organizational commitment on different types of absence behaviors.
Journal of Managerial Issues, 14(2), 181.
Camden, M. C., & Ludwig, T. D. (2013). Absenteeism in health care: Using interlocking
behavioral contingency feedback to increase attendance with certified nursing assistants.
Journal of Organizational Behavior Management, 33(3), 165-184.
doi:10.1080/01608061.2013.814521
Deery, S. J., Iverson, R. D., & Walsh, J. T. (2006). Toward a better understanding of
psychological contract breach: A study of customer service employees. Journal of Applied
Psychology, 91(1), 166-175. doi:10.1037/0021-9010.91.1.166
DeNisi, A., & Griffin, R. (2011). HR (2nd ed.). Mason, Ohio: South-Western ; Cengage
Learning.
Hassan, S., Wright, B. E., & Yukl, G. (2014). Does ethical leadership matter in government?
effects on organizational commitment, absenteeism, and willingness to report ethical
problems. Public Administration Review, 74(3), 333-343. doi:10.1111/puar.12216
Mayfield, J., & Mayfield, M. (2009). The role of leader motivating language in employee
absenteeism. Journal of Business Communication, 46(4), 455-479.
Nicholson, N., Brown, C. A., & Chadwick-Jones, J. (1977). Absence from work and personal
characteristics. Journal of Applied Psychology, 62(3), 319-327.
Nicholson, N., & Johns, G. (1985). The absence culture and psychological contract-who's in
control of absence? Academy of Management Review, 10(3), 397-407.
doi:10.5465/AMR.1985.4278945
Rauch, M. (2005). Strong relationship shown between morale, absenteeism. Incentive, 179(5), 8-
8.
Rogers, R. E., & Herting, S. R. (1993). Patterns of absenteeism among government employees.
Public Personnel Management, 22(2), 215.
Psychological Contract: Investigating Absenteeism 22
Veazie, J. I. (2011). Improving productivity while managing unscheduled absenteeism in the
health care business office. Health Care Collector: The Monthly Newsletter for Health Care
Collectors, 25(4), 6-10.
WARFORD, M. (2014). Does paid time off PAY OFF? (cover story). Workforce, 93(8), 26-48.

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  • 1. Psychological Contract: Investigating Absenteeism 1 The Psychological Contract: Investigating Absenteeism Danielle Cloutier Winona State University MGMT317: Human Resources Dr. Jana Craft
  • 2. Psychological Contract: Investigating Absenteeism 2 Abstract: Absenteeism takes a major toll on businesses causing them to lose employees for a period of time, which leads to increased costs and decreased productivity. Absenteeism is a silent killer that causes organizations to incur many indirect costs such as lower performance, training new employees, and overtime pay for those that pick up the slack. An unspoken psychological contract plays a large role in shaping the culture of the company, which is a major determinant in absenteeism. In addition, it is the link that connects an employee and employer together by establishing what is expected of the employee and what the employer will give in return, all be it unspoken. There are five main reasons for absenteeism: illness, mental health, family balance, entitlement, and job dissatisfaction. This paper will examine how three different organizations dealt with absenteeism differently and the reasons why. Based on the research and interviews conducted, I found that entitlement is not seen in many organizations, yet in the research, it is documented that it causes about 15% of absences. In addition, depending on whether a company is in the public or private sector, gives us insight into the level of absenteeism and the risk associated with being absent. All the other areas were consistent between the literature and interviews. Key Terms: Absenteeism, Psychological Contract, Motivation, job dissatisfaction, entitlement, Employee Assistance Program, management, culture
  • 3. Psychological Contract: Investigating Absenteeism 3 The Psychological Contract: Investigating Absenteeism Absenteeism takes a major toll on businesses causing them to lose employees for a period of time, which leads to increased costs and decreased productivity. “In terms of straightforward expenses, recent surveys estimated that time-off costs from annual payroll have, risen to about $40 billion” (Burton, Lee & Holtom, 2002, p. 181). “Even more important, direct financial losses that are associated with absenteeism fail to capture considerable indirect costs that are attributed to excessive absenteeism such as wages for replacement workers, overtime pay, and lower performance.” (Mayfield & Mayfield, 2009, p.455-6). Absenteeism is one of the silent killers that many companies fail to notice when it is happening, and that is because of the mindset employees have on the issue. It is common for employees to think, I will not go to work today, they won’t miss me, or it won’t harm the business, I will just say that I am sick, but like dominoes if every person thinks this, one domino falls and the rest go with it, ultimately hurting the business as a whole. When an employee is absent, their productivity is reduced to zero (Rogers & Herting, 1993). For this reason, it is necessary to put a plan in place tailored to your specific company that will eliminate the costs of absenteeism; the level of risk and effect the absent individual has on the company will play a large role in the degree of punishment. I have personally witnessed this in my fraternity. It is my job, as the Vice President of Chapter Operations, to notice those that are absent often and to confront them so we become the best fraternity possible. It is hard to get people motivated to come if they do not have it within them, but that is exactly what businesses need to do to decrease absenteeism. The importance of noting this is that the culture of the company plays a major role in absenteeism
  • 4. Psychological Contract: Investigating Absenteeism 4 Literature Review Psychological Contract: The psychological contract plays a large role in shaping the environment and culture in the workplace. The psychological contract is defined as, “the overall set of expectations held by the employee with regard to what he or she will contribute to the organization and that are held by the organization with regard to what it will provide to the individual in return” (DeNisi & Griffin, 2006, p.15). The psychological contract sets the tone within the organization. If both sides (manager and employee) keep up their side of the deal, they gain mutual trust, leading to more productivity. On the other hand, if there is a breach in the contract it leads to decreased trust and cooperation because they feel that their presence does not matter, ultimately leading to betrayal. “Psychological contract breach was related to lower organizational trust, which, in turn was associated with perceptions of less cooperative employment relations and higher levels of absenteeism” (Deery, Iverson & Walsh, 2006, p. 166). Abu-Doleh and Hammou also include that a breach will result in decreased job dissatisfaction, decreased commitment to the company, decreased performance, and one’s personal beliefs of the company (2015, 39-41). Job dissatisfaction will be talked about in more detail later, and is one of the biggest reasons why employees are absent. One’s personal beliefs of the company could also change, which proves or makes them feel that there is unfairness in the workplace, which turns them against the culture and company. Therefore, there is an important connection between the psychological contract and absenteeism, and without the psychological contract, many employees would not understand the consequences of absenteeism. Issues in the psychological contract, including leadership style, values, relationships, work conditions, benefits, and perception of importance. When the leaders of an organization are
  • 5. Psychological Contract: Investigating Absenteeism 5 acting a certain way then those below them tend to pick up the habits; if the manager is doing it then others will deem it acceptable. The values of the corporation affect the attitude that an employee has towards the business. Although it is not common for many people to work for an organization that does not align with their values, it is a possibility, and this can lead to disengagement, and lack of desire to grow. If the employees do not see the values as guiding points, and/or stimulate their ambition to give a hundred and ten percent the company will fail to live up to their values, leaving a gap in the corporations goals. In addition, it is important not to leave any employees behind, leaving them to be lost or not feeling needed. The environment of the working conditions plays a large role as well. It is essential that environment is suited to the task to ensure efficiency and teamwork. Depending on whether or not the ambiance is welcoming, or if the employees feel they are just another number determines the effort they put in. If they feel a part of the whole, they will want to contribute to the success, where as if it is not welcoming they will not feel as if their input matters. If a strong and positive culture is not present, it will lead to high levels of absenteeism and other related issues. The overall goal of the psychological contract is to ensure that all employees are working towards the same goals within the organization while also being effective. When all of these are met it creates for a satisfied and healthy work environments where work can be completed successfully. Ultimately, it is the link between the employee and organization. Absenteeism Absenteeism is a major problem in organizations that leads to high costs, and there are many sources of absenteeism. Absenteeism is “any failure to report for or remain at work as scheduled, regardless of the reason” (Mayfield & Mayfield, 2009, p. 457). Today it is more common to see absenteeism in the workplace because of the drastic change from a
  • 6. Psychological Contract: Investigating Absenteeism 6 predominantly male workplace. Since women are not choosing to be stay at home moms, they have to leave their job to take care of their kids, attend events for them, and also take care of their parents; all leading to higher levels of absenteeism. Also, there is less loyalty in the workplace. The average employee changes jobs eight to ten times in their life. Due to this, employees must create their own security, meaning they are more concerned about their self than the company as a whole; this means less attachment to the company (Kramer & Neidtz, 1997). “Absence is influenced by social consensus both inside and outside the workplace” (Nicholson & Johns, 1985, p.397); this is demonstrated through a multiplicity of reasons for being absent. “Fifty-two percent of total employee absences are discretionary in nature. These absences are the result of factors such as stress, personal needs, and entitlement mentality,” (Mayfield & Mayfield, 2009, p.457). In addition to personal needs, stress, and entitlement mentality, absenteeism relates to health issues, family issues, and dissatisfaction on the job as well. “It is estimated that only 35 percent of unscheduled absences are due to illness, while 65 percent of absences are for other reasons, such as family issues (20 percent), personal needs (20 percent), entitlement mentality (15 percent), and stress (10 percent)” (Veazie, 2011, p.7). Health and Family Issues Health issues include anything from being sick to dental reasons, etc. Burton, Lee, and Holtom (2002) found that, “absence due to illness may not strictly represent involuntary absenteeism but rather may be voluntary in nature.” (p.183). This is the problem of cheating the system, and for that reason it is hard to monitor or regulate it, since the psychological contract is formulated on the basis of trust. Deery, Iverson, and Walsh (2006) reflected this by saying, “Trust reflects a confidence between the parties that they will not be harmed or put at risk by the actions of the other party and that neither party to the exchange will exploit the other’s
  • 7. Psychological Contract: Investigating Absenteeism 7 vulnerability.” (p. 167). Family issues deal with children or spouse being sick, having to take care of sick or dying parents or relatives, funerals, etc. . It has become the norm to call into work and use the excuse that I am sick, but what is failed to be realized is the amount of money that the company is losing by one employee being gone. These are two of the more straightforward reasons for people being absent, and the reasons most typically heard of; this is because they are more socially acceptable. Personal Needs Absenteeism also comes from personal needs or problems, which includes things such as, stress, drug or alcohol abuse, depression and mental illness, etc. According to DeNisi and Griffin (2006), stress, “is a person’s adaptive response to a stimulus that places excessive psychological or physical demands on him or her” (p.273). Stress can be caused by many factors including: task demands, physical demands, role demands, and interpersonal demands; these are stressors related to work. Stress outside of work can be due to life changes or traumas. In an organizational setting, it can cause a decline in performance, absenteeism, turnover, and decreased motivation. It can lead to other personal problems such as drug abuse, smoking, alcohol, etc. (DeNisi & Griffin, 2006, p.275). Drug and alcohol abuse can cause impairment on the job and increased absences due to lack of mobility and thinking skills. There are wellness programs in place that can help individuals deal with these issues. The main one is the Employee Assistance Program for drugs and alcohol, stress management, and other things. This is one of the more difficult absences to decrease, but it goes back to combatting absenteeism with positive feedback and the psychological contract. Also, it is important that other employees and managers
  • 8. Psychological Contract: Investigating Absenteeism 8 observe the behavior of employees, in order to notice if there is anything that seems out of the blue, so that they can provide the help before the number of absences increase Dissatisfaction Dissatisfaction is also a leading cause of absenteeism, because if a worker does not feel they are getting any benefit out of their job they will be absent more often since work is not a priority, and it does not matter to them if they lose their job. Reasons for job dissatisfaction include the nature of the work, pay and benefits, and relationships with supervisors and co- workers. The effects of job dissatisfaction can range from a variety of different things, decrease in organizational commitment, decrease in organizational citizenship behaviors, and less of a positive feeling connected to the business which could lead to negative word of mouth (DeNisi & Griffin, 2006, p. 134-35). “A strong relationship exists between job dissatisfaction and absenteeism, partly because employees who are dissatisfied may not always be able to leave their jobs…In addition, it is possible to withdraw even more gradually by simply being late.” (DeNisi & Griffin, 2006, p. 134). The organization has a large say in changing the outcomes associated with dissatisfaction because it is an internal cause. This is the biggest area that the psychological contract needs to be concerned with; whether it be the leadership style, benefits or aligning values so that not only absenteeism, but turnover as well is decreased. Entitlement Last, entitlement is when someone feels that they are above others or hold enough power (essentially, they believe they are better than the rest of their employees) that it is not necessary for them to show up to work. Entitlement is thought to come from those employees that hold top management positions, but this is not always true, it can come from those below that feel they
  • 9. Psychological Contract: Investigating Absenteeism 9 are not being valued to the level they deserve. As stated in the introduction, absenteeism is a domino effect, but for more than just the fact that others will follow. “Increased absenteeism by some worker could lead to an increased work-load among coworkers. As a consequence, workers could be required to spend more of their personal time at work doing extra unscheduled hours” (Camden & Ludwig, 2013, p. 168). If the co-workers have to pick up the slack, it could result in them taking days off to rejuvenate and decreased morale. Decreased morale leads to larger issues such as burnout. No matter what the reason is for an employee to be absent it is important to note that these absences have a significant impact on the company’s overall well-being. Combatting Absenteeism There are multiple reasons why people are absent as stated above. Ideally, a company will have benefits (pay, opportunities, and sick leave), employee programs, and a proactive leadership style and strategies that will help them combat rising absenteeism. Even though absenteeism can be a silent killer, one important take away from monitoring absences is, it predicts individuals that will leave soon. Nicholson, Brown, and Chadwick-Jones (1977) stated, “(a) a tendency for “leavers” to have higher absences rates than matched groups of “stayers”, (b) a tendency for individual absences rates to rise immediately prior to the act of quitting, (c) a tendency for group turnover and absence rates to be positively correlated over time.” (p.321); the key to combatting something is knowing when it is going to happen. It is important to notice how medical, government, and small businesses deal with absenteeism differently, and how their psychological contract and documentation of absenteeism leads to the required behavior. “To remain competitive in a global economy employers must implement effective programs to stem escalating disability claims and increased costly absenteeism” (Kramer & Neiditz, 1997, p.58). As stated previously, the leadership style that one exerts will have a large effect on how the
  • 10. Psychological Contract: Investigating Absenteeism 10 employees view the company; therefore, it is essential to be there for ones employees, while also being a leader. In addition, they should have employee programs in place to show that they care, and help prevent future costs related to alcohol abuse, stress, etc. Essentially, businesses need to have a procedure in place to deal with the issues at hand. According to Marisa Warford, one way to decrease unscheduled absences is by using a paid time off system versus a traditional leave program (2014, p.28). In the paid time off system, it allows for a set number of days off during the year, instead of in the traditional leave program it is broken out into sick days and vacation days. Warford states that some of the advantages associated with PTO programs are decreased unscheduled absences, decreased productivity costs and losses, empowers employees to make their own decisions, and the flexibility related to it (2014, p.28). As stated above, with more women working there has been an increased liking to having work balance and flexibility. The flexibility is a great attribute for people with sick parents, kids, etc. By allowing people to decide when to take their absences also entails a sense of trust on the employees. This trust and power will hopefully cut absences and create for a stronger workforce. Corrective action plans need to be in place in order to deal with rising absenteeism. These guidelines need to be laid out in the Employee Handbook, in addition to the unspoken rules found in the psychological contract. By having a plan in place to deal with rising absenteeism will decrease the long term affects that come with it. Also, it creates a standard that will hopefully prevent something from happening in the first place. These plans should entail information about when/who to contact if one knows they are going to be absent, how many hours they will receive to be absent, and the consequences related to being absent too frequently.
  • 11. Psychological Contract: Investigating Absenteeism 11 Practical Application Absenteeism will be evaluated in three different types of businesses: medical, government, and small business. The significance of this comparison is to understand how varying organizations deal with absenteeism and to what degree of seriousness they take. The three interviewees are Sheila Finley from the Mayo Clinic in Rochester, Minnesota, Brian Osborn from the Federal Prison in Rochester, Minnesota, and Jake Schmidt from Clement’s Chevrolet in Rochester, Minnesota. The first person interviewed was Sheila Finely. She works at the Mayo Clinic as the Senior Human Resources Service Partner. She has been a part of the Mayo Clinic since 2001 but has been working in HR since 1988. She has held many positions within HR that have led her to hold this top position. With her knowledge and certification, it makes her a very reliable source, since she has seen it from many different sides of the business, along with having a vast amount of knowledge. Second, I interviewed Brian Osborn who is the Human Resource facilitator at the Federal Prison in Rochester, Minnesota. He started out as a correctional officer for a few years, and then found himself in the human resource department, where he has been for fifteen years. Throughout the fifteen years, he worked at five different places, but this is what makes him well- rounded in the field. Last, I interviewed Jake Schmidt from Clement’s Chevrolet. Jake’s current position is to handle IT, human resources, and accounting issues. He has been a part of the company for ten years, while serving for three years in his current position. Before his current position, and the reason for him being hired, was to assist their sales management team to help them reach internal and external sales goals. He is an important asset to my research because he has seen the company from both sides (management and a typical employee). Also, just last year, Clement’s underwent a change within their company that drastically changed the policies and
  • 12. Psychological Contract: Investigating Absenteeism 12 culture, which is useful in understanding how change and new programs can lead to positive or negative impacts. Medical Field First, I will look at each issue stated above in the medical field by using the Mayo Clinic’s point of view for dealing with absenteeism. It is important to note the culture present at the Mayo Clinic and whether they focus on written or unwritten rules. The Mayo Clinic uses their written rules as the policies that guide their employees to be successful; it is not abnormal that they focus more on written guidelines because they are specifically concerned with their patients, and there is a very small gap for error; attendance is crucial for delivering quality patient care. If they do not show up on time then there is a progressive corrective action process to address the problems. Finley refers to the unwritten rules to be that of peer pressure and morale of other co-workers in the department. There are no rewards set in place to reward those that are present the majority of the time besides the use of positive feedback. It is important to notice that every person sees a “reward” as something different, and it is up to the leader or manager to notice this and make accommodations accordingly. In order to address the issue, they use a typical system where the managers have a verbal conversation with the employee to address the circumstances. They question why they have been absent, and if there is anything that they can do in order to help better suit them. If there is a job disconnect that is resulting in the high levels of absenteeism, then this is when a teacher-student moment takes place. In this moment, they reinforce why their position in the company is so vital to the overall well-being of the company but also to the clients/patients they are representing. Managing each employee as an individual with different needs is important, and supervisors may encourage the employee to contact the “Employee Assistance Program”; master degreed employee assistance professionals
  • 13. Psychological Contract: Investigating Absenteeism 13 staff this program. Services provided include relationships, substance abuse, co-worker relations, workplace issues, depression and stress. If the manager cannot obtain any information then it is out of their control, and they must just note to them the importance of their attendance. Especially in a medical field, it is essential to note that the absences affect those around them. When I asked Finley how it affected the other employees, Finley stated that it greatly decreased the morale of other employees because they were tired of picking up the slack for those individuals. The issue of entitlement that was discussed in the literature review is not typically seen at the Mayo Clinic. Most of the managers and top leaders are committed to the success of the organization. She did state though that some employees can feel a sense of entitlement, but overall only about five percent of their employees have behavioral and attendance problems. In a medical field, the issue of absenteeism is not highly seen, and I believe this is due to the high risks related to the type of work they do and because it affects multiple individuals. In addition, the Mayo Clinic adheres to strict rules and guidelines that drive the employees to live up to those standards. The Mayo Clinic also incorporates a manager tool, which includes a systemic application of applied behavior analysis to maximize human performance in the workplace, identified by both the presence of discretionary effort and a positive environment. Government The second industry is government. I used the Federal Prison located in Rochester, Minnesota. The most typical reason for employees to be absent is due to sickness or so they state. To decrease the abuse of being “sick”, they use a system that allows them to require a sick not every time they are absent for an illness. This appears to be excessive, but in such an influential agency, it important that no one abuses his or her power, therefore if one decides to be
  • 14. Psychological Contract: Investigating Absenteeism 14 absent too often this action is necessary. Another corrective action taken for sick leave is that if one is gone for more than three days, a sick note is automatically required. Last, they can put them on “Absent Without Leave,” which keeps the employee from being paid and could lead to possible suspension. On the other hand, although there are no rewards set in place for those that come to work often, if an individual has built up enough sick days they can use them toward their retirement. They focus on leading based off known standards; therefore, the leaders lead by example. It is also important to take a personal interest into their life to decrease the level of job dissatisfaction. Since job dissatisfaction leads to less productivity, it is essential that this does not happen in a prison where safety is key. Compared to the medical field there are more eyes on the employees in the Federal Prison as to why they are absent. It is not frowned upon to monitor their employees because they want to solve every problem in a timely manner. There are tests in place that can determine if the employee is still competent to work there. One is the fitness for duty test, which is designed to continually check their potential. If they do not meet the requirements, they are to leave their service; the government holds their employees to high standards. Those at the top have earned that position rightfully and it is less likely to see those individuals absent. They want to increase the morale, and when many are absent there is a decrease in morale, and for that reason, they try to decrease activities that could lead to it. Small Business Third, the examination of small businesses, which will help to see the difference between public and private organizations. Currently, there are no major absentee issues at Clement’s, but they have the guidelines related to absenteeism laid out in the employee handbook. They realize that every person is different but at the end of the day, every employee is expected to be at work. The two main issues seen in their workplace when absenteeism is present, according to Schmidt,
  • 15. Psychological Contract: Investigating Absenteeism 15 is sick leave and job dissatisfaction or disengagement. It may appear to be more difficult to examine the level of education and skills present here because their employees hold white-collar, blue-collar, and no collar positions; yet, every employee’s treatment is still the same, which is essential to the success of their company. If they all were treated differently, it would cause a lot of controversy within the organization. The first step taken to address the issue is communication through their direct supervisor, and then if the issue were not resolved it would go to Schmidt. At this point, it becomes a more serious problem, and if there is no correction than all the corrective actions that lead up to termination are complete and the employee can be fired. To compensate employees for showing up, they become the first ones in line for promotions and compensation increases. Within the last year, they have adapted a new monitoring system to tell when people are absent. This new system has also changed the culture in Clement’s. Prior to the change, there were a lot more absences, and the culture in the business was less inviting. They have switched to using a third party payroll website that documents every aspect of employment from hiring to retirement that sends out weekly, monthly, quarterly, and annual reports. This decreases the chance of cheating the system. This system allows them to better manage their financial statements and personnel expenses in order to closely monitor the cost of absenteeism. Since the change, they have also switched to having the department manager approving the time sheets versus having an employee that sits in the corner collect them; this decreases the number of nuances that individuals can get away with, since the department manager will already have a tight eye on them. One plus to having so many different types of workers in the business is that many of the individuals are cross-trained meaning that they are able to complete more than just their specific job. Although this is helpful, it is also only a temporary solution. Jake stated, “Absenteeism is
  • 16. Psychological Contract: Investigating Absenteeism 16 very expensive. Personnel expenses can get out of hand rather quickly if absenteeism is not dealt with quickly and efficiently. It also puts unwarranted stress on the staff trying to fill the void left by a person missing work.” As the other two companies have stated, those at the top do not feel a sense of entitlement, but instead they feel that they are greatly invested in the business therefore they must lead by example; Jake states that this is starting to work, for the employees are becoming more engaged, but it is not quite fully there yet. Employee Perspective Now that we have heard from the Human Resource Managers in each corporation, it is important to note whether those working in the lower positions have the same outlook on the company. I was lucky enough to be able to get this from two of the three organizations: medical and small business. Sue Cloutier from the Mayo Clinic (Operations Manager) stated that she felt the policy is fair and well written to combat the difficulties seen at the Mayo Clinic. She also commented that it gives a clear direction for the managers to follow, and since the policy is very descriptive and definite there are no grey areas, meaning those in lower positons can easily understand it and will not be blindsided. Once one reaches ten strikes or unregulated absences they will no longer have a job. She stated that she is lucky enough to enjoy her job and feels many of the other individuals there feel the same way. She has called in sick only five times in the past twenty-five years that she has been there. This remarkable statistic shows that the employees that work at the Mayo Clinic are satisfied, which leads to decreased absenteeism. Scott Cloutier, who works at Clement’s Chevrolet, as the General Sales Manager works directly with the employees that sell the cars. Since their company’s change, it has allowed the employees thirty days of paid time off; versus the three weeks they had, but before those days did not include sick days. After the owners implemented this new plan, it held the employees
  • 17. Psychological Contract: Investigating Absenteeism 17 more accountable for their attendance and less likely just to take a sick day for no reason. He does see that the consequences related to absenteeism are not always followed through with. They can still take days off that they are not paid for, and since the sales people are paid on commission it does not greatly affect the company. Essentially for them being absent is the equivalent of having no customers come in that day which is plausible. He also sees a lot of job dissatisfaction within the business and believes this is due to the large communication gap between those at the top and those at the bottom. In addition, the pay plans continually change which leads to inconsistency. This is irritating to employees. What leaders believe to be true is not always a direct reflection of what the employees are feeling; this disconnect can cause many problems. Discussion Based off the research done through scholarly articles and interviews from three different people, in three different businesses, there are many discrepancies between the readings and actual businesses. Along with this idea is also the discussion of how each corporation deals with absenteeism differently. I will also relate it back to my fraternity and provide the organizations with one modification that I feel will be helpful in continuing to combat absenteeism. These ideas will be the focus of my discussion. The first idea that needs to be analyzed is the difference between how medical, government, and small businesses differ on how they deal with absenteeism and the level of absenteeism present in their organization. The biggest difference I found was since medical and government agencies are public sectors they have more regulations that guide them and affect more people directly. On the other hand, Clement’s is a small business that is tailored to fit to their own needs. In my research, I found that it is more typical for there to be higher levels of
  • 18. Psychological Contract: Investigating Absenteeism 18 absenteeism within the public sectors; this is the first point that I found different from the research I completed. Second, I found that entitlement seemed to be a large issue related to absenteeism (15% according to Veazie, 2011), yet throughout the interviews not one company saw that as a large threat or reason for employees to be absent. This is huge, especially since I expected to find that more corporations would have this problem. This brings us to the question of whether it is the management in play or more closely linked to their mindset that they have come so far. I believe that since they have earned their position they wish to bring their knowledge to others (invested in the company), and in return this affects those below them, leading to good leadership. Another key difference that leads to why the three businesses have different plans in place is due to the level of risk associated with each company. Like the variation between public and private sector, again in the government and medical field there are higher risks and stakes associated with their work. It is evident through their strict and strongly enforceable policies that they mean business and expect 100% out of their employees. This is not to say that small businesses do not have similar expectations, but especially with Clement’s as an example, the majority of their employees are paid based on commission and the individual themselves take the risk for their own personal gain by being absent versus the company as a whole. It is very likely that even if they were not there the sale would still be made, which is ultimately the end goal, and it does not matter which salesperson reaches it. In comparison, at the Federal Prison and the Mayo Clinic, if an individual were to be gone the paperwork would pile up, and the tasks they were assigned that day would not be completed. While at Clement’s, another salesperson can complete the sale for an absent individual. This is not quite as easy in the Federal Prison and Mayo Clinic. In the Federal Prison and Mayo Clinic, each person is hired for a different reason,
  • 19. Psychological Contract: Investigating Absenteeism 19 and although other employees would probably have the skills necessary to complete the tasks it would increase workload and stress. In response to having a desire to write this paper because I was seeing absenteeism issues in my fraternity, I have learned that there are many ways to decrease absenteeism, yet I have also seen many of the reasons why people are absent as well. I think the biggest reasons people are not showing up based off of the issues that I discussed is because of a disconnect and dissatisfaction with what we are doing. It is hard as college students to get our peers engaged. Most of the time people do not show up is because they feel that they have better things to do, or what we are doing will not affect them later on, therefore, it is not important now. The biggest thing we can do to decrease this disconnect is to continue have the leaders of the fraternity show up to all events, constantly remind them of the dates, and express to them the importance of showing up not only for their own personal growth but ours as a fraternity. We also greatly focused on the why this semester to push people to see the advantage gained from the experience. Another form of implementation that took place this semester was the focus on committees. Instead of having the people with positions do all the works we focused more on including everyone in the decisions. In addition, through this it got people involved in areas that they felt would be most rewarding and that they were interested in. It may have not increased overall attendance, but it pushed people to attempt to get more involved, and share their ideas to make our fraternity better off. Another change that was made was doing projects that affected the community; this increased the social responsibility felt by many which made them want to attend. After all this changes are made, there is not much else we can do because we have taken all the necessary steps as leaders to try to engage them. The rest is up to them.
  • 20. Psychological Contract: Investigating Absenteeism 20 Last, I wish to give the three organizations a tip that I think would be helpful for them to decrease absenteeism even further. I think it is important to note that none of the companies had a reward system in place to award those that are present often, and I think this is something they should look into to give their employees a bit more incentive. These rewards do not have to be drastic just something that increases motivation even further in their employees. In conclusion, absenteeism is a major problem, but many companies are dealing with the pressing issues well. They have strong systems in place to measure the costs related to absenteeism, and corrective plans in place to deal with those employees that are experiencing high levels of absenteeism. It is essential that management monitors the changes that are occurring so they can continue to accommodate their culture and provide benefit plans to meet the needs and wants of future employees to eliminate unwanted absences all together.
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