How incentives help reduce sickness absence

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• Cash-based incentives or rewards can be offered to encourage attendance and discourage unnecessary absence.

• However, positive results may not address the underlying cause of high sickness absence rates.

• Recording sickness absence data is essential in order to understand how incentives can be effective.

• A possible downside to incentives is that employees may feel pressurised to attend work when they are ill.


Case study: Boots offers healthy rewards

Most of the healthcare incentives and benefits offered to Boots UK’s 64,000 staff are voluntary benefits, such as private medical insurance, or discounts on flu vaccinations or eye examinations.

These measures are part of a broad strategy, implemented two years ago, for supporting staff health and wellbeing. Boots UK takes part in nationwide initiatives such as National No Smoking Day, offering discounts on smoking cessation products.

A Boots spokesperson says: “We have created a healthy minds intranet site, an e-learning package, and launched a healthy backs intranet site. Our improved sickness absence policy and procedures have ensured more [staff] are available to deliver great customer care more often, which we underpin with a 100% attendance award.”

The retailer rewards employees for 100% attendance with Boots Advantage card points.

Incentive schemes can help to reduce sickness absence but they must have the right reward, says Alison Coleman

Sickness absence rates may have fallen slightly in the last year or so, as shown in May’s EEF/Westfield Health 2011 Sickness Absence Survey, but it remains a costly and challenging issue for employers.

Many employers have adopted incentive or reward strategies to encourage attendance and discourage unnecessary absence, or staff ‘pulling sickies’. These include cash-based incentive schemes that offer bonuses for 100% attendance over a set period, or a proportion of a bonus depending on the number of absences.

In 2005, Royal Mail tackled a sickness absence crisis by adopting an incentive scheme in which workers with a clean attendance sheet were entered into a prize draw, with cars, holidays and gift vouchers among the prizes.
Although its sickness absence rates fell by 1%, suggesting cash incentives can have an effect, schemes with a direct monetary value have been losing favour, replaced by plans that directly support health and wellbeing, says Mike Tyler, managing director health and productivity at Buck Consultants.

“It was seen as slightly perverse to offer a positive incentive to influence negative behaviour,” he says. “A lot of employers that offered cash rewards were also finding any positive results were short-lived and not addressing the real issue identifying the underlying cause of high sickness absence rates.”

Incentives offered under a wellness programme can include wellness days, support for people who want to lose weight or give up smoking, discounted gym membership, and complementary therapies such as reflexology and massage. The challenge for employers is to choose the right incentives for staff.

Dipa Mistry, consultant and communications manager for flexible benefits at Lorica Employee Benefits, says: “There is a cultural element to consider. City, media and marketing organisations generally have a more relaxed and informal culture, and might offer a certain number of flexible duvet days.

“But in a more structured organisation where work is project-based, for example in IT, this ad-hoc approach would not work, so you might see more wellness days, with onsite provision of health screening, complementary therapies and stress counselling.”

Accurate absence data is key

The real key to understanding how these incentives can work lies in having accurate sickness absence data. Jenny Hawker, principal, health management UK at Mercer, says: “It is surprising to find so many organisations do not have that data. Unless they know the reasons for absence, how can they know which incentives to put in place?”
But there is a potential downside to offering incentives to boost attendance, particularly when linked to team or department attendance, with people feeling pressured to come to work, even when genuinely ill.†

Cary Cooper, professor of organisational psychology and health at Lancaster University Management School, says: “It may improve the headline sickness absence figures, but it does not address the cost impact. When you are ill, your ability to do your job is affected, so you are not going to be productive.”

Where remote working is an option, people who feel too ill to come in to work may feel able to work from home. “The right to request flexible working is a much more profound incentive than a cash reward,” says Cooper. “Why encourage people with coughs and colds to come in when they will probably be more productive working from home?”

As much as anything else, incentive schemes aimed at tackling sickness absence can simply help to raise awareness. Mercer’s Hawker explains: “They can bring attention to an issue that may otherwise have gradually deteriorated.”


Mental health and absenteeism

The Centre for Mental Health estimates mental ill-health accounts for 40% of all sickness absence, yet it is poorly understood by employers.

Anxiety in the workplace, fuelled by the continued climate of economic and job uncertainty, may well be exacerbating the problem.

Access to high-quality helpline services, such as those delivered by employee assistance programmes (EAPs), should be part of the management strategy as a way of helping people recover from illness more quickly and make better decisions about absence and attendance.

Allegiance to colleagues and managers can make a difference to absence and effective management can help to reduce absence rates.

Putting ownership of absence onto board level is an important factor in helping to address the issue, while poor line management may lead to greater problems.

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