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Absenteeism and labour turnover

Of the various problems faced in the management of human resource, the two problems confronting any organisation are:

i) ii)

Absenteeism and Labour turnover

We shall focus our attention on absenteeism first.

Meaning Absenteeism, in simple terms, means the failure of an employee to report for duty when he is scheduled to work. An employee is considered as scheduled to work when the employer has work available for him and the employee is aware of it. An employee is to be treated as absent for the purpose of absenteeism statistics even when the does not turn up for work after obtaining prior permission.

If an employee reports for duty even for a part of the day or shift, he cannot be counted among absentees.

Absence of an employee on account of strike or lock out or layoff, which is involuntary absence, will not come within the purview of the term absenteeism. The rate of absenteeism is measured by applying the formula

Causes of absenteeism
Among the various causes of absenteeism, the following important: 1. Nature of Job- If the nature of job performance by the employee is dull and monotonous, he likely to be absent frequently, this happens because, the employees loses interest in work. He feels physically and mentally tired. 2. Strained relationship with superiors and fellow employeesAnother reason for and employees frequent absence for duty is that he is unable to get along with his superiors and fellowemployees. This happens because, his superiors and fellowemployees may find fault with him, criticize him unnecessary or even tease him. It is also possible that the fault may lie with the employee, i.e., he may shirk his duties or find fault with others for his lapse. 3. Health grounds- For health reasons, an employee may be absent for work frequently. If the employee or anybody in his family falls sick often, he may not be to be regular for work. 4. Personal work- An employee. Sometimes may have to attend to some personal work for the sake of which he may be absent for work. Such a need may arise when an employee, building a house, has to supervise construction work or is on a pilgrimage tour and so on. 5. Stress conditions- Another important reason for absenteeism is that many workers undergo stress. Such stress conditions develop due to domestic commitments and work pressure. Many

individuals lack the mental courage to handle crisis. This affects their mental health. 6. Industrial accidents- In spite of safety measures, industrial accidents do take place. In view of such accident there is loss of man-days. 7. Unattainable targets- Some employee set targets that are beyond the reach of their employees. This may force some employee to proceed on leave frequently. 8. Lacks of holidays- Some organisation follow the concept of five day week. The employees working in these hand organisations, thus, enjoy two weekly holidays. On the other hand, some organisations still work for six days in a week. Undoubtedly, the morale of the staff working in a concern that follows the five day week concept will be much better. In some organisations, the employees may not be given holidays even on certain important festival days. This forces them to be absent for work on such days. 9. Social compulsions- Every person has certain social compulsions. A marriage in a persons family, for example, forces him to avail leave to make the necessary arrangements. Same thing happens when a death occurs in a family. 10. Inclement weather and climatic conditions- loss of man days also occurs in an organisation due to bad weather and climatic conditions. The turn out of employees, for example, may be less during days of heavy rains. 11. Bandh, transport strike etc. - Attendance in the workplace tends to be poor during days of bandhs and strike by transport employees.

Consequences of higher rate of absenteeism

Higher rate of absenteeism in any workplace leads to the following consequences: 1. Human resource planning loses its value- The manpower needs of the enterprise would have already been anticipated and steps would have been taken to ensure the right number of employees. Higher rate of absenteeism obstructs the process of implementation of the HR plan 2. Flow of work gets affected- Frequent absence of employees affects the smooth flow of work in the organisation. For example, of Bs work is dependent on As work, absence of A on any day affects Bs work. If such a trend continues, implementation of the basic enterprise plan becomes difficult. 3. There is decline in production- Obviously, loss of man days result in loss of output. Shortage of manpower makes it difficult to adhere to the production schedule. 4. Target attainment becomes difficult- Due to shortage of manpower, the enterprise will not be in a position to attain its production target. When it does not attain its production target, it becomes difficult to attain the sales target as well. Failure to attain sales target result in the business not attaining its targeted level of profits. 5. Machine capacity cannot be fully utilised- Higher rate of absenteeism results in idle plant capacity. This happens because, unavailability of the required manpower results in under utilization of the machine capacity. 6. Casual workers may have to be employed- Sometimes, the enterprise may have to appoint temporary or casual workers in place of the

employees who are absent. This may become necessary to mitigate the effects of higher rate of absenteeism. 7. Quality of work suffers, as the casual workers may not work efficientlyThe casual workers may not be as efficient as the regular workers of the concern are. This affects the quality of work done. 8. Execution of orders becomes difficult- Due to lack of manpower, the enterprise will not be able to carry out promptly the orders of its clients. 9. There is increase in overtime work- Sometimes, the available employees may be requested to work overtime to complete a particular task. Payment for overtime work is always paid at a rate higher than that fixed for normal work. This increases the financial commitment of the enterprise. 10. Work- pressure of employees who have turned up for duty increases-Often, the available employees are requested to do the work of those who are absent so that when these employees are absent on any day there will be someone to do their work. But such a practice increases the work pressure of the available employees. 11. The enterprise my have to incur the displeasure of its customersThis happens because of the delay in work caused by the shortage of manpower. The customer, therefore, are made to wait. 12. It may necessitate disciplinary action in certain cases- The management may have to initiate disciplinary action against those employees who are absent without prior permission and without valid reasons.


Employees lose pay for the period of unauthorized absence- The employees may have to forego pay for the period of unauthorized absence. This makes it difficult for them to meet their family commitments.


Loss of pay forces the employee to borrow- As a result, the employees become indebted to moneylenders.


The enterprise may suffer loss of reputation-As the enterprise is unable to fulfill its commitments to its customers, it may suffer loss of reputation.

Absenteeism in India
There have been studies on the problem of absenteeism in India. Some of the important observations made in these studies have been given below: 1. The rate of absenteeism has been more than 10%. 2. Absenteeism among workers is more than that among supervisors and managers. 3. Large organisations face the problem of absenteeism more than small organisations do. 4. Department where supervisors are indifferent to the welfare of employees face a higher rate of absenteeism 5. Absenteeism in night shifts is more than that in day shifts. 6. Absenteeism rate is higher on days before and after a holiday. 7. Women employees are absent more often than men employees are. 8. The rate of absenteeism is higher in the case of employees below the age of 25 years and above the age of 55 years.

9. Rate of absenteeism is the lowest on the day of pay disbursement and is the highest immediately after the pay day. 10. Seasonal bias in the causes making for absenteeism has also been noticed. Absenteeism due to sickness has been found to be more in July and September and less in April and June.

Measure to control absenteeism

It may not be possible to eliminate absenteeism altogether. But the following measure may be adopted to minimize the rate of absenteeism. 1. Selection of right candidates- The enterprise has to be careful while selection candidates for various jobs. Only deserving candidates need to be selected. All those who show no commitment during their period of probation should not be retained. 2. Proper assignment of work- Before assigning work to any employee, his interest, willingness and capacity will have to be taken into account. When this is done the situation of an employee doing some work for which he has neither attitude nor aptitude will not arise. Such a measure will help to reduce the rate of absenteeism. 3. Attainable targets- The target set for every employee should be such that he will be able to attain it. If the target is reasonable, the employee will strive to reach it. This will boost his morale and therefore, he will not be under any pressure to be absent for work. 4. Provision for holidays- The five-day week concept is universally accepted. Every enterprise, therefore may give its employees the

benefit of two weekly holidays. This will certainly help them to refresh themselves physically and mentally and they will be perfectly fit for work for the next five days. Similarly, the employees may be given holidays on important festival days so that they will be able to be with their families on such days. This fulfils the social needs of employees. 5. Proper- Subordinate relationship- the manager sh9ould not assign work to his subordinates in the way work is assigned to machines. He must understand that his subordinates have emotions, values and sentiments. He must be good in the art of getting things done by his responsibilities and work with commitment. In other words, both the superiors and their subordinates should strive for good human relations in the workplace. 6. Proper inter- personal relationship- The relationship between the employees should be cordial. When an employee wants to avail leave in view of personal work, he may, by a mutual agreement with his colleagues, ensure that the enterprise work does not suffer in view of his absence. In the same manner he may also help his colleagues when they proceed on leave. Proper inter personal relationship will ensure smooth flow of work in spite of the absence of a few employees. 7. Elimination of the monotony element- Steps may be taken to eliminate the monotony element in certain jobs. The enterprise may give up certain outdated and age- old practices. Record- keeping, filing and such related work may be done using computers. This saves lot of labour for the employee and also makes the job less strenuous. 8. Suitable incentives- incentives, both monetary and non-monetary, must be offered to employees to induce them to work harder and with commitment. If no distinction is made between efficient and

inefficient employees, those employees who are sincere and efficient will also start shirking duties. 9. Conducive working conditions- The physical facilities to the employees must be of high standards. These include drinking conditions make the employees feel at home. It discourages them from availing leave frequently. 10. Counseling- It is a technique used to enable and employee to get rid of his mental stress. It helps to refresh an employee mentally and it brings back the enthusiasm lost.

Having discussed absenteeism, let us now focus attention on labor turnover.


The rate of change in the number of employees of a concern during a given period is what is known as labour turnover

In any organisation certain number of employees leaves their jobs every year due to various reasons. To fill up these vacancies and to meet the need for additional hands, certain number of employees may be appointed thus, if one compares the number of employees in the beginning of the year in a concern with that at the end of the year, one may find a discrepancy. Labour turnover is only concerned with this rate of change in the workforce. Certain employees do change their jobs owing to social and economic considerations; labour turnover is either normal or excessive. It


is within 5% Normal labor turnover arises out of certain unavoidable causes and the management need not worry about it.

Excessive labour turnover arises out of certain avoidable causes it is only this management should try to control.

Causes of labour turnover

The various causes of labour turnover can be classified into the following two categories;

i) ii)

Unavoidable Causes and Avoidable causes

The unavoidable causes are: 1. Death, retirement and disablement- Death of an employee, if occurs, and retirement of employees are inevitable. An employee who has become disabled due to an accident either in the workplace or outside cannot perform his job. 2. Personal betterment- If the employee is able to find another that is better in all respects when compared with his present job, he may leave. 3. Domestic responsibilities in case of women employees A woman employee may after her marriage resign her job owing to domestic responsibilities. 4. Discharge on disciplinary grounds- If the employee is dismissed for certain reasons- misconduct, willful negligence etc.,


The avoidable causes are: 1. Lack of job satisfaction- An employee who lacks job satisfaction in the present organisaiton will be on the look out for a better placement. Once he finds such an offer, he may resign and go. 2. Low pay- It is not unnatural to find employees looking for job offers that give them more pay. Professionals in general and computer professionals in particular, these days, have such a criterion. 3. Lack of incentives- An employee who is not happy with the incentives provides in the present organisation may try for job elsewhere. Once he finds such an offer, he may resign his present job. 4. Lack of job security- Everyone needs a secured job. An employee engaged in a temporary job would leave the present organisation the moment he finds a secured job. 5. Lack of social security benefits- Employees expect certain social security benefits like pension, provident fund, gratuity, insurance etc. employees in government service alone get pension and such other benefits. It is not unnatural to find and employee, working for a private organisation, trying for a government job. In case he gets such an appointment, he is sure to leave his present employer. 6. Lack of promotion opportunities- If the present job of the employee does not provide scope for any promotion, the employee may have to serve in the same capacity till his jobs that provide ample promotion opportunity. Eh experience in the present organisation may help him in finding a better job. Once he finds such a job, he may leave the present organisation.


7. Strained superior- subordinate relationships- Even if the tangible benefits mentioned above are available in the present organisation, an employee who is unable to get along with his superior may resign his job. 8. Poor inter- personal relationships- An employee who finds his colleagues to be jealous, irritable and uncooperative may be planning to leave the organisation. One may not be able to work in such an atmosphere.

Effects of Labour Turnover

Excessive labour turnover in any organisaiton has the following adverse effects:

1. Flow of work gets affected- Frequent changes in the work force affect the smoothes flow of work. As a result, the enterprise may not be able to adhere to its plan. 2. Increase in cost of operation- Recruitment of new employees, giving them training and all such activities involve additional expenditure. This results in increase in cost of operation. 3. Low level of efficiency of the new recruits- The level of efficiency of the new employees tends to be low. This is because the new employees take time to settle down. They may not pick up things fast. What can normally be done in an hour may be done in a day. This results in loss of time. 4. Reduced output- Higher rate of labour turnover result in reduced output. This happens due to two reasons. First, there is delay in recruiting new employees. As a result, there is loss of man hours.


Secondly, the new employees may not be as efficient and effective as the old employees were. 5. Quality of work suffers- The new employees may not initially possess the skill with which the old employees worked. This would affect the quality of work. 6. Wear and tear of machines tends to be more- Due to rough handling of machines by the new employees, the wear and tear of machines is bound to be more. 7. Loss due to improper handling of materials- There is scope for loss due to wastage and breakage of materials due to improper handling by the new recruits. 8. Increase in industrial accidents- There is also scope for increase in the rate of industrial accidents due to the ignorance and incapacity of the new workers. Such workers may not be well versed in the use of safety devices. 9. Higher cost of supervision- The new employees need close supervision. This is because they may require the help of the supervisors often. The supervisors also need to ensure that the new recruits do not make blunders. This necessitates the deployment of more supervisors and thereby increases the of supervision. 10. Increase in cost of production- Loss of man hours, reduced output, recruitment and training costs, increase in wear and tear of machines, loss due to improper handling of materials and all such factors lead to higher cost of production.


Cost of labour turnover

The cost of labour turnover may be classified into two: i) ii) Preventive costs and Replacement costs.

Preventive costs
Preventive costs refer to all those costs incurred to satisfy the existing employees to prevent them from leaving the organisation. These include the following:

1. Increase in pay 2. Increase in incentives 3. Better facilities for training 4. Amount spent on welfare measure, e.g., provision of water coolers, canteen, restroom etc., 5. Social security benefits such as pension, provident fund, gratuity etc.

Replacement costs
Replacement costs are incurred once the organisation fails in its efforts to retain its existing employees. These include the following:

1. Cost of recruitment 2. Cost of training 3. Loss of output due to delay in recruiting new employees 4. Loss of output due to the inefficiency of the new employees 5. Loss due to wastage and breakage of machines mishandling by the new recruits


6. Loss due to increase in wear and tear of machine due to rough handling by the new employees 7. Compensation on account of accident 8. Higher cost of supervision, etc.

Measurement of labour turnover

Labour turnover is a common problem in workplace. As long as it is within the normal level, it does not pose any threat to the management. Once that rate of labour turnover becomes excessive, the management cannot afford to ignore it.

Three different methods are generally used for the purpose of computing the rate of labour turnover. These are: 1. Separation Method 2. replacement Method and 3. flux method

Separation Method
This method compares the number of employees who have left the organisaiton during a particular year with the total number of employees on rolls during the year under review. It ignores the replacement of employees done during the year. The formula for determining the rate of labour turnover is;


Number of employees who have left the organisation during 2004=6 Total number of employee on rolls during 2004=72 The rate of labour turnover in the year 2004, therefore=

Replacement Method
This method considers only the number of replacements done during the year. The number of employees replaced is compared to the total number of employees on rolls to determine the rate of labour turnover. The formula is:

If in the above illustration, out of 6 employees who have left the organisation during 2004, only 4 have been replaced, the rate of labour turnover as per the replacement method is

4/72 x100=5.56%
Flux Method This method combines the separation and replacement methods. It, thus, considers not only the employees who have left the organisation but also those who have been appointed in their places during the period under review.