There is strong evidence that employees respond to both negative and positive incentives to reduce absenteeism. Both seem effective, including penalties, lower sick pay, bonuses and lotteries.
Wolter Hassink, professor of Applied Econometrics, wrote a publication on this in IZA World of Labor. This widely-read outlet aims to inform decision makers, advisors, interested citizens and others who are concerned with issues in labor worldwide. Hassink discussed the pros and cons of seven types of programs for reducing workplace absenteeism. As a researcher he is connected to the Future of Work hub at Utrecht University, striving for outcomes that help society as well as individual workers and organisations.
One of the ways to tackle absenteeism is improving working conditions for employees. Hassink gives the example of offering management programs that help employees cope with multitasking. He notes that programs like these are costly solutions and sometimes they even increase short-term absences.
Return to work
Another way to help reduce absence is the use of grading policies: letting people return to work with partial responsibility and partial sick leave. These policies are effective for the recovery of long-term absentees, Wolter Hassink writes. It is not valid to dismiss workers in response to their sickness abscence, he warns. “Employees may force themselves to go to work while sick, because of fears of excessive financial penalties.”
Bonuses based on workplace performance work, in reducing sickness absenteeism, but can be rather undirected and hence costly. Being present at work is just one of the input dimensions into overall worker effort and performance.
Generosity of Social Security
All in all, the willingness of firms to introduce their own incentive schemes, depends on the generosity of social security. Firms will be less inclined to implement such programs if they can shift the financial burden to social security programs. Success also depends on specific local labour market conditions (for example unemployment rates) and the firm’s type of production, Hassink concludes.