1. What figure will Cal Jenson report to Fred Donofrio for the amount that absenteeism cost ONO last year? Answer: Using figure 2-5 on page 52 Cal must compute the total employees hours lost due to absenteeism for the period. ONO lost a total of 539 hours of labor because of absenteeism. Second Cal must compute the weighted average wage or salary totals to $23.50 an hour for an average salary of $47,000. Third one must compute the cost of employee benefits for ONO employees is an additional 33%. Because absent employees are paid Cal must take the compensation lost/hour/absent employee = wage/salary + benefits. Therefore 1.5/539/11=47,000 + 33% = (2.99 or 3). Next Cal must compute the compensation lost to an absent employee by taking the above answer of 3 and multiplying it by 1. Next he must estimate the total supervisory hours lost due to employee absenteeism (1.5hours lost x 67.375) equals a total of 101 supervisory hours lost. Next compare the hourly supervisory salary + benefits which was 41.895. Then estimate total supervisory salaries lost to managing absenteeism problems equaling 4,231.395. Cal must estimate all other costs incidental to absenteeism which totaled to $12,400. Therefore the result Cal should give Fred that the total estimated cost of absenteeism is $16, 634.395 averaging $1, 386.20 per employee including the supervisors.
2. Is absenteeism a serious problem at ONO? Why or why not? Answer: Yes, I believe there is a problem to the absenteeism at ONO even though the books states “Unfortunately there are no industry-specific figures on the costs of employee absenteeism (F. Cascio, pg.53).” Because it does not mention whether or not any of the employees went past their allotted 12 days sick leave paid we cannot judge whether or not it is a big concern. Some organizations only payout vacation if an employee leaves so most individuals make sure to use their earned sick days so they do not loose them after the fiscal year or when one decides to leave. I think a major problem is that they seemed to be understaffed. It should not take an hour and a half to reschedule and fix your day of work. A good manager should be able to manage running their business without calling in a temp or make sure for a day that calls for extra people they have extra just in case someone does call out. When I worked retail I saw this first hand with black Friday. We scheduled everyone that day and if it was to many people we would send those who wanted to go home early home. Because the money made on black Friday was almost three or four times higher than a normal day it didn’t matter our employees hours for the day.
3. What recommendations for action could Cal Jenson make to Fred Donofrio? Answer: The first recommendation Cal should suggest is lowering the amount of sick days. Because 12 is 2 ½ weeks a year and the average American uses 2.3 percent of scheduled work time, or an average of 5.5 unscheduled absences per year (F.Cascio, 2013), they could try cutting paid sick days to 10. If that works and numbers lower then leave it ten for a few years and lower it even more. Secondly Cal should recommend that Fred pull the reports for the prior year and see the days that had the highest earnings. Make sure those days you schedule an extra person. Because employees are salary it doesn’t matter if they work 2 hours or 8 for the day. Schedule a extra person just incase someone calls out and if they are not needed send them home. Between scheduling an extra person and cutting allotted sick days from 12 to 10 Fred an Cal should see a difference in ONO costs due to absenteeism. Works Cited
F.Cascio, W. (2013). Managing Human Resources: Productivity, Quality of Work Life, Profits (9 ed.). New York, NY: McGraw-Hill.