Chapter 5

Firm Culture, Absenteeism, and Turnover

The purpose of this chapter is to present the research, analysis, and findings of the survey.  (Survey procedures are described in the introduction, and the survey and frequency distribution of answers are presented in appendix 1.)  Based on the theoretical foundation laid in chapters 2, 3, and 4, this chapter investigates the relationship between a participatory culture and absenteeism and turnover rates.  In order to investigate this relationship, there are two types of analyses used.

            First, there is a quantitative investigation.  The purpose of this section is to highlight quantitative relationships that exist between two variables.  The variables considered are the dependent variables against mechanisms for participation, incentives, types of training, and shared information.

            Second, there is an analysis based on qualitative inference.  I predominantly utilized qualitative inference in chapter 4 when I categorized the firms.  Now, I will compare the firm culture identified in chapter 4 and see the relationship between firm culture and absenteeism and turnover rates.  Additionally, I will highlight other relationships that emerge given initial analysis and subsequent review.

Quantitative Techniques

            This section is straightforward quantitative analysis.  I will compare components for participation against the dependent variables using cross tabulation.  Before getting into that analysis, though, allow me to introduce some other analyses performed that could have affected the study.  I compared the percentage of employee ownership, the age of the ESOP, and the size of the firm to the dependent variables.  This analysis revealed no correlation.  Therefore, there are no effects that can be attributed to those characteristics. 

However, when I compared absenteeism and turnover to each other, then I found that they were absolutely and unutterably correlated to one another (Chi-Square Value of 38.322 with significance at .000.).  Upon considering the tight relationship between absenteeism and turnover, I concluded that this finding is of little surprise.  It is completely logical to assume that a firm with low turnover would also be a firm with low absenteeism—with the opposite being intuitively evident as well.  In a sense, they both measure someone not being present at a worksite.

            The difference between absenteeism and turnover, from the firm’s perspective, would seem to be that turnover is preferable to absenteeism.  While the cost to training and apprenticeship programs is considerable, there is also a sense of stability.  If someone is gone, then there is no dependence on the departed person to perform work.  An absent employee creates an instant crisis for the firm—who will perform the work of the missing person?  In either case, though, a missing employee is a cost to a firm that must be addressed.  One method for addressing the issue is to implement employee-involvement programs.  Let us see how they work in relation to absenteeism and turnover rates.

For participation to occur, mechanisms for participation must be present.  This first review considers mechanisms for participation to absenteeism and turnover rates.  The four vehicles identified on the survey are: joint labor/management committees, problem-solving teams, self-directed work teams, and board representation [1] .  Only the test for joint labor/management committees to absenteeism reveals a relationship.  The relationship seems to be that firms that do not have a joint labor/management committee have lower rates of absenteeism (Table 6)

            Next, short-term incentives are compared against the dependent variables.  The short-term incentives identified on the survey are: profit sharing, year-end bonuses, gain-sharing, attendance bonus, and cross-training incentive.  Gain sharing and absenteeism did correlate quite significantly.  Attendance bonus showed a relationship to absenteeism and turnover.  As is the case with joint labor/management committees, not having the incentive correlates with low absenteeism and turnover and having the incentive has a strong connection with high absenteeism and turnover (Tables 7, 8, and 9).

The next set of variables investigated is types of training against the dependent variables.  Training types identified on the survey are: employee orientation, financial, problem-solving, team building, management/supervisor, and computer skills.  The only correlation found is a relationship between financial training and absenteeism (Table 10).

            The final set of indicators considered against the dependent variables is shared information.  The types of shared information identified on the survey are: customer-satisfaction indicators, financial information, safety information, and strategic-planning information.  There is only a relationship between shared financial information and absenteeism (Table 11).

            The preceding tables present the results of the investigation.  The analyses used are cross tabulations with Chi Square demonstrating the significance of each finding.  Although the typical level of significance is .05 or 95%, I accepted a slightly lower level.  My justification for doing so is that management and operating a firm is more an art than an exact, specified science.  Utilizing 95% or a .05 tolerance level might be extremely important in determining if a manufactured screw is acceptable, but managing never seems to operate quite in the same way.  Therefore, slightly lower levels of tolerance are accepted in light of the studied subject.

About the only fair conclusion at which I can arrive in interpreting the findings is that there are existent problems at firms that compel them to offer money to their employees.  The most likely scenario is that a firm has problems with attendance or turnover, and it resorts to short-term incentives in order to compel employees to come to work.  This is not very enlightening.  While it may be common for firms to try and bribe their employees to be present at work and keep them at the company, this says little beyond: There is more to work than money.  The logical connection seems to be that companies that have already problems try to use money to encourage people to be at work.

At this point, the analyses yield little.  The weak connections and counter-intuitive findings direct us to conduct the investigation using more advanced techniques.  What I perform next is a series of tests utilizing indices.  (One note on this method.  When I computed the totals, I included the category of other for each component.  For example, although the listed number of training items without other is four, one could have a score of five given that the respondent provided a response to other.  This is similar to how I created in the indices presented and utilized in chapter 4.)  The indices consist of summed items for each category: training, shared information, employee-involvement mechanisms, and short-term incentives.  Therefore, if a company provides two forms of training, then that company would have received a value of 2.  The range for the indices are:  training—0 to 7, shared information—0 to 5, employee-involvement mechanisms—0 to 5, and short-term incentives—0 to 6.  The basic findings found earlier appear again when the values are extrapolated into an index.  The results of the findings are now presented in total (Tables 12 to 19).

Table 12

Table 13

Table 14

Table 15

Table 16