Details and Background to the Challenge

The pharmaceutical industry is important in the life of every individual because the industry is responsible for manufacturing products that are aimed at improving the health of individuals. The company thus plays a crucial role in healthcare since they engage in constant research aimed at providing new, better and improved drugs in the market. Based in Nepal,  and the first private pharmaceutical company in Nepal, Chemidrug Industries Private Limited is one such company that manufactures various drugs that have been approved by the World Health organization (WHO), food and drug admiration (FAD), and licensed to be consumed as medical drugs for various health related issues. Chemidrug has the responsibility and is dedicated in providing services aimed at improving the health of individuals and saving lives. With the crucial role that the pharmaceutical industry plays in the aspect of health and life of individuals, the industry has persistently faced the various challenges including employee absenteeism. In fact, absenteeism is has been identified as the most persistent phenomenon in drug manufacturing industries like Chemidrug. Absenteeism refers to a situation in which a worker absconds or absents him or herself from the duty when he or she is expected to be at work. A worker can be absent from work for various reasons such as sickness, social factors for example alcoholism, family problems and depression, having transportation problems, conflicts with the supervisor, injuries among myriads of other reasons. One can also be absent from work intentionally say due to lack of motivation, or unintentionally say due to sickness. Again, there are employees in the industry who are rarely absent and the most challenging one, chronic absentees. While this challenge is present in most organizations, it is the most visible challenge in the Pharmaceutical industry. When workers do not report to work intentionally or otherwise, the industry suffers, particularly the department concerned with drug production. This is a serious challenge considering that majority of worker in the industry are stationed in the drug production plant. The problem with employee absenteeism, which necessitates urgent addressing, is that it impacts negatively on performance of workers in the sector, quality of productions, revenues generated by the organization, and productivity. While the rate of absenteeism various across departments in Chemidrug, the causes of employees staying away from work when they are supposed to be on duty are the same. The challenge of absenteeism is also experienced at different rates indifferent days of the week. For example, most employees in the pharmaceutical industries avoid work on Mondays and Fridays, necessitating urgent rescheduling in the production plat and other department. A situation like this may mean that the duty of the absent employee may have to be done by either a junior assistant or a worker who is normally not stationed in that  particular production line or department, hence compromising on quality. This paper shall therefore analyze absenteeism as a challenge in Chemidrug Pharmaceutical Industry, focusing on the impacts of absenteeism and suggest solutions to this challenge. It shall also examine one probable solution which should be subject to further research using the hierarchical decomposition model.

Impactsof Absenteeism in Chemidrug Pharmaceutical Industry

Pharmaceutical industries play a vital role in the well-being of individuals through manufacturing of curative and preventive drugs. Absenteeism in the sector therefore has dire consequences, to both the organization and the customer who consume pharmaceutical products. Absenteeism has serious consequences, not only to the organization and its employees, but also to the clients who depends on the company’s products. The impacts are in terms of costs, quality, performance, productivity and even co-workers the supervisors of the organization. Generally, planned absence affects the organization more than absenteeism that is planned in advance. The next paragraphs shall examine the impacts of absenteeism in Chemidrug pharmaceutical industry.

To the organization, absenteeism has been associated with increased costs. The organization loses millions of shillings annually as a result of unplanned absenteeism among its employees. The company suffers through paying of employee who may be force to work overtime to recover the work lost by the absent employees. The company also incurs losses because worker who are absent from work are still paid their dues despite being unproductive on some days. In the production and quality control department for example, the company may at time be force to replace some absentee employee attracting additional cost of training new employees as well as hiring new ones and costs incurred generally as a result of managing the absent workers. Apart from incurring costs, the company also suffers in terms of low quality products and reduced productivity as a result of employee fatigue during overtime hours. This is brought about by  replacing the absent employee with one who may not be too familiar with what goes on in the production plant, or if his skills and experience do not match that of the absent employee. Absenteeism is also responsible for coordination problems, increased rates of on the job accidents, and grievances form co-workers, who may complain on additional tasks. Absenteeism also affects the individual employee and the co-workers. Employees who are consistently absent from work may suffer from loss of pay on the days they were absent, or worse still, they may be dismissed from work. Again worker picked from different departments or work groups to replace those absent may suffer from frequent accidents as a result of poor coordination in their newly assigned tasks. Most of the work in the organization is technical and as a result, hurriedly replacing employees may lead to loss of focus, overworking of employees and infighting among employees. While Chemidrug industries aim at providing drugs at low cost, the extra costs incurred as result of employees may not only affect its customer who may not only suffer from poor quality products, but also push product costs higher meaning the consumers may need to dig deeper into their pockets in the long run.

As explained above, absenteeism in Chemidrug industries has dire consequences that are spread across the organization, its employees and customers.  The organization therefore pays a huge price which is shared or passed to the employees and the clients.  The fact that absenteeism is a persistent problem in the pharmaceutical industry is a reason enough to tackle the problem heads on.

Solutions to the Absenteeism Problem at Chemidrug

While some employees do not report to duty as a result of unavoidable circumstances such as sickness or after seeking formal permission form their supervisors, majority of absenteeism cases are intentional, avoidable and with dire implications. The following suggestions can be solutions to the high rate of absenteeism at Chemidrug.

Instituting Disciplinary Measureson Chronic Absentees

For the pharmaceutical company to reverse the trend of increased employee absenteeism, disciplinary action may become necessary especially for those who are persistently absent from work. There are employees who have a pattern of absenting themselves on particular days of the week, especially Mondays and Fridays. Disciplinary measures could range from forfeiting pay, warning letters, suspension, demotion or in worse case scenarios, dismissal from work. Alternatively, absence management can also be adopted by the organization so as to identify those who are absent for genuine and false reasons. This may involve asking for employees to provide evidence of sickness from a doctor and checking on genuine leaves. These measures will scare and deter intentionally absent employees as well as bringing the rate of absenteeism down.

Introducing Programs Aimed at Assisting Employees

Absenteeism that results from social problems such as alcoholism, marital or family problems can effectively be dealt with through employee assistance programs. While these issues may be found outside the organization, they nonetheless affect employees at the workplace and are responsible for low productivity, industrial accidents, volatile mood and general stress that may result to unplanned absenteeism. Outside programs intended to provide help to employees such as advice and counseling, referral and financial services will reduce absenteeism if they are properly implemented, monitored and maximally utilized by employees. This solution may, however, come with its own cost to the organization but this loss cannot be compared to the eventual benefits of the program to the organization’s revenues.

Promoting Favorable Organizational Culture

Chemidrug can significantly reduce the rate of employee absenteeism by making the organization to be suitably welcoming to the employees.  To increase job satisfaction, the organization, especially supervisors and top management can make the organization appear friendly through activities and policies including employee get together parties, encouraging candid communication among employees and management, matching skills to tasks at hand, health clubs and other welfare programs. Focusing on employee wellness can also make an employee love his or her work place hence enhance job satisfaction which reduces absenteeism rates and its associated costs. This is because a culture that is friendly, concerned, and responsive to employees concerns is rated positively by employees, hence minimizing absenteeism.

Adequate and Fair Reward System

While pharmaceutical companies such as Chemidrug are among the most profitable organizations, their reward system may at times may not commensurate the work that their employees execute, yet there are some who may abscond work because they feel the pay is not enough hence resort to other means of looking for finances. Employees who are fairly and adequately remunerated are unlikely to stay away from work. Providing employees with incentives or adopting the carrot approach such as gifts, bonuses or cash rewards to employees who do not miss work throughout the year will also motivate employees to be always present at work.

Paid and Sick Leaves

While most pharmaceutical companies allow their employees to apply for paid leaves, making sick leaves can be an important step towards significantly reducing the prevalence of employee absenteeism. A new way that the organization can use to reduce absenteeism prevalence is making paid sick leave compulsory. If Chemidrug adopts this solution, it will be especially useful when there is a communicable disease that threatens to affect the whole group of employees. In such a situation, if employees are made to stay at home, the benefits will be more than the loss since this move will reduce massive absenteeism when either all the workers get infected or when employees avoid work for fear of catching the communicable disease.

Possible and Probable Solutions

The above solutions can be adopted by Chemidrug for the purposes of solving the absenteeism challenge in the organization. These five solutions can either be possible, and effectively be implemented, while others, the probable, cannot be predicted in terms of effectiveness and intended outcomes.

Possible Solutions

The following solutions have been identified as possible solutions because they have highest potential for achieving the intended outcome:

Introducing programs aimed at assisting employees: These programs such as counseling on substance or marital issues, financial services, workshops and trainings will address issues such as productivity, job satisfaction, and employee stress, hence directly solving the sources of stress.

Promoting favorable organizational culture: suitable and friendly working environment with good communication, mutual understanding and clearly defined goals will create a positive culture that fosters good working relationships and curtails absenteeism.

Instituting disciplinary measures on chronic absentees: Measures such as firing employees who are chronic absentees, warning them and using a lie detector to discover why they have not been at work will scare employee from deliberate absenteeism.

Probable Solutions

Adequate and fair reward system: giving employees good package may motivate them and encourage them to come to work. However, there are some employees who no amount of remuneration or incentive will make them stay at work, especially those whose absenteeism has nothing to do with finance.

Paid and sick leaves: Making employees take paid and sick leaves will avoid the bad intentional absenteeism with its effects. Again, compulsory sick leaves makes employees avoid absenteeism associated with communicable diseases at the work place. However, this idea can encourage absenteeism especially for employee who may take advantage of this program.

The most probable solution: Adequate and Fair Reward System

There is grate correlation between and organization’s reward system and rate of absenteeism. Generally, organizations can reduce workplace absenteeism through providing their employee with a reward system that is not only adequate but perceived as fair, especially among junior employees. One of the major reasons why employees work is to receive a pay at the end of the day and that is why this solution can be very effective if more attention is paid to it. A good reward system should be adequate and match the economic times. This shall minimize cases where employees absent themselves to engage in extra activities outside the workplace that is meant to earn additional income. The pay system should also be fair, or perceived as fair since this will make the employee believe that his or her efforts are not just needed but also valued as a result of the fair reward system. A competitive reward system also has an effect of boosting the morale of the workers, hence enhancing productivity, performance, and encouraging teamwork. When an employee is motivated, he is likely to experience job satisfaction hence low stress levels which further reduce absenteeism due to stress, loss of moral and poor pay. An effective pay system also focuses on rewarding employees who are good performers, and recognizing such employees will send a message that the organization values their work hence they will be motivated to improve their performance. Such motivation reduces rates of workplace absenteeism. Reward system can also be used to encourage attendance, say for example rewarding employees who have been consistently present at the workstation throughout the year and those that have not abused the leave facilities provided by the organization.Other ways of rewarding employees is through incentives, which are meant to encourage employee to attend their scheduled duties throughout the year without fail. This carrot approach method can be used by the pharmaceutical company to reduce absenteeism due to sickness and voluntary absenteeism. Incentives encourage employee attendance in several ways. For example, introducing of flex time as an incentive will not mean that employees are allowed to reduce their hours of work, but rather, their work schedule will be made more flexible so that employees can enjoy a balance between their needs and work without being absent. Wellness programs are also useful incentives that the organization can adopt through introduction of initiatives such as rewarding employees who for example engage in programs likely to improve their health such as quitting alcohol, cigarettes or seeking counseling. This shall see stress due to social factors such as alcoholism reduced. Additionally, the organization can provide events such as picnic or rewards to employees whose attendance can be described as perfect so as to encourage them not to be absent. However, reward system and incentives come with additional cost to the organization hence most organizations may not implement this solution. Again, it may make employees dependent on incentives and rewards to perform a task that is their responsibility without the need of any incentive or rewards. The advantage that makes this solution most probable is that some incentives need not take up the organizations cash. Even when cash is involved, the benefits will be more than the consequences of absenteeism.  Providing employees with cash rewards or other incentives, therefore, has great potential in reducing employee absenteeism that is why this method is most preferred probable solution and needs to be subjected to further research.

The SWOT Analysis of Adequate and Fair Reward Systems

Likely Responses and Consequencesdrawn the SWOT

Responses

One of the strengths of this solution is that it will receive positive response and welcomed by employee at the organization since adequate and fair pay is the need of every employee. The solutions, since it involves bonuses and rewards will stimulate employees to be more productive, cooperative and motivated to their work and this is certainly a positive response that will be welcomed by the organization as well. There will need for great caution in implementing the solution since the criteria for selecting those to be rewarded must be perceived as fair, otherwise it may elicit discontent from some quarters of the employees. Additionally, employees who have no financial concerns or who are going through unrelated issues may be indifferent to the solution. The organization may, however, elicit a different response from employees. Since it may involve additional cost, for example picnics and bonuses, the accounts department is likelyhesitatein fully adopting the solution. Further, the organization may hesitate adopting the solution because the idea of rewarding employees may make some of them not perform tasks which may be their responsibility without asking for rewards. 

Consequences

This solution will have positive consequences since it will address the needs of employees who may be absent from work as a result of discontent with the pay system. Employees undergoing certain social issues related to absenteeism such as alcoholism will greatly benefit from the employee wellness programs that encourage them to attend programs aimed at addressing whatever social problem they may have. Productivity, employee performance and job satisfaction are some of the aspects of work that will be stimulated by this solution. Paying bonus to employees who do not abuse sick leave will reduce the number of employees who use this facility as an excuse to absent themselves.

To the organization, this choice may mean additional expense since some rewards and incentives may necessitate cash. The organization will also benefit from increased productivity and employee performance and therefore it shall be able to deliver quality drugs or products to the customers. Absenteeism comes with its cost to the organization, and these costs are usually passed to the consumer in terms of increased prices. This choice shall, however, reduce absenteeism hence customers will be able to enjoy quality products at low costs. Some incentives may require the organization to partner with other organizations proving such services such as counseling and financial services.

Hierarchical decomposition plan

The main question to be subjected to further analysis is “What is the effect of adequate and fair rewards system on employee absenteeism?”  The main question will attempt to find out reward systems including incentives, wage rates, bonuses and other have any effect on employee absenteeism.

The first sub question, Q1 “How does an organization’s use of incentives influence absenteeism?” will attempt to find out how incentives such as flex time influence the rate of employee absenteeism.

Question 1a “What are the implications of incentives on the organization’s costs?” will attempt to find out the effects that the introduction of incentives programs can have on the expenses or costs of the organization, and find out if it worth introducing such programs in comparison to the benefits versus costs.

Question 1b will try to find out the relationship between incentives such providing bonuses and flex time and perfect attendance, which is whereby an employee reports to duty when he’s needed throughout the year.

Question 1c. will relate flextime and productivity o see if employees can get encouraged to be more productive by introducing flexible schedules convenient for them.

Finally question 1d will find out how wage influence absenteeism because findings indicate that employee can absent themselves from work to look for additional income.

Sub-question 2, “Does providing bonuses on unused sick leave days reduce absenteeism?” This question will examine if the rate of employees being absent from work with excuse ill health will reduce if bonuses are provided for the employees who do not exceed a certain number of sick leave days. Q2a will attempt to find out if providing such bonuses discourage employees from faking sickness and utilizing their sick leave days. Q2b will try and assess the impacts or effects that absenteeism due to sickness can have to the organization. Finally Q 2c will establish how providing counseling programs can help alleviate stress among employees and hence reduce absenteeism due to social issues such as stress.

Sub-3 “What is the effect of employee wellness program on absenteeism?” will examine the effects of employee wellness programs introduced by an organization on the absenteeism. Wellness programs include programs intended to help employees for example quit smoking or drinking. Question 3a will find out if such wellness programs have enhance employee productivity and if yes how? Finally 3b will find out how absenteeism impact on quality since days that employees are absent may necessitate unplanned replacements which may compromise quality.

Sub question 4“What is the effect of adequate pay on absenteeism?” will investigate the effects of adequate pay on the rate at which employees absent themselves from work since low pay sometimes makes an employee absent so as to make adequate wages outside the organization. Finally, 4a will establish how adequate and satisfactory pay can influence the morale of an employee.