Introduction

1.1 Purpose Statement

It has been observed that the absence rate across the sales department was significantly
higher than industry average in the past five years. Therefore, a research proposal is asked by
the Head of Human Resources of International Conglomerates (IC) Company to investigate
absence rate among the sales team in three countries, France, India and Brazil. Each team have
different amount of workers and lead by a regional sales manager who report straightforwardly
to the Heads of Sales in each country. The number of employees in the sales team from France,
India and Brazil are 55, 123 and 35 respectively. Goodman & Atkin(1984) explored the effects
of absenteeism as rise of absence rate will decreased productivity, increased costs, more
grievances and increased accidents. A similar point has been explained by Sharma, G. and
Tolani, B., (2015) the author says that lower absenteeism not only reduces cost but also
improves productivity of a company. These investigation stated the impact of absenteeism as
the loss in productivity. There are some causes of absenteeism on workplace which are work
stress (Darr and Gary Johns .,2008) ,job satisfaction (Price and Charles .,W.M 1981), and
personal labour income (Leaker and Debra 2008).

1.2 Aims

The purpose of the research is to analyse likely causes of rising absenteeism in the sales
department over the past five years in the International Conglomerates Company.

1.3 Research Objectives

I. To investigate reasons why employees have kept absent from their duties in the last
five years.
II. To investigate whether stress on workplace are primary reason of absenteeism.
III. To determine whether personal labour income related to the causes of absenteeism.
IV. To find out impacts of absenteeism to the company.

1.4 Research Questions

I. What are the underlying factor as to why the employees have kept absent from work
for the last five years?
II. How stress in workplace influence employees absence from their duties?
III. How personal labour income can lead an employee non-attendance to work?
IV. What are the impacts of high absence rate to an organization or company?
Chapter 2: Literature Review

2.1 Introduction

Absenteeism is a widespread problem, which can influence all organisation. Same

relationship mentioned by Parboteeah, et al.,(2005) defines absenteeism is a costly behaviour
that occurs around the world. Cole and Brian (1992) stated that absenteeism as employees who
do not participate for scheduled work. This statement has also been supported by Munro and
Leonie (2007) explained that absenteeism as the employee are being absent from work. In fact,
there is a wide range of reasons which can lead an employee absence from the workplace. The
findings of a research conducted by Huczynski (1989) found that most of the organisations do
not understand and also not inquire into the main causes of absenteeism within their
organisations. Therefore, all organisation need to fully understand the causes and effect of non-
planned absenteeism, then put measure to solve the problem.

2.2.1 Stress

Darr and Gary Johns (2008) highlights that work stress has been considered as major
factor of absenteeism in the public and academic press. This statement also agreed by Woods
(2011), one of the most common reasons for absenteeism is stress especially for non-manual
workers. Although stress has been considered as the primary reason for absenteeism, but these
findings may not be applied to all countries. Palmer (1989) defines that stress is the
psychological, physiological and behavioural response by an individual when they perceive a
lack of equilibrium between the demands placed upon them and their ability to meet those
demands, which, over a period of time, leads to ill-health. Besides, Gellman and Rick.T (2013)
described stress as negative emotions associated with a series of physical symptoms such as
dry mouth or irritability. Stress can have a different impact on everyone and some will
experience more symptoms than others. Although stress is mainly connected with the negative
aspect, Stevenson, et al., (2006) found that stress has both positive and negative effects on the
individual in the workplace. For the positive effects, an employee who can suffer from limited
or an ‘acceptable’ level of stress can breakthrough achievements or performance. By contrast,
for the negative effects will reduce an employee’s working performance that may affect the
productivity of a company. From the evidence above, it shows that stress and work are closely
related which can cause either positive or negative effect in the workplace. However, the
findings have overlooked the employees' country
2.2.2 Job satisfaction

Price and Charles .W.M (1981) describe job satisfaction as the overall degree to which
employees like to their occupations. This statement is agreed by Steers, et al., (1978) clearly
summed up the effect; highly satisfied employees may strongly hope to participate, while
highly dissatisfied employees may be reluctant to participate. Moreover, Störmer, et al., (2013)
explain that the psychological literature on absenteeism was prevalently concerned with
negative work attitudes such as job dissatisfaction and organizational commitment. A similar
point has been explained by Drago, et al., (1992) also use this approach of work attitude and
they state that absence is viewed as a withdrawal response to a negative work environment.
Therefore they think that job satisfaction and absence are inversely related. This study is further
agreed by Gellatly and Ian R., (1995) explains that when work experiences are personally
rewarding, commitment should increase and absenteeism should decrease. Among the
discussion above, there is significant correlation between job satisfaction and absenteeism.
When someone is satisfied with what he is doing, he will put more effort into his job and work
efficiently. However, these study may not applied to all country due to cultural differences.

2.2.3. Personal labour income

The findings of a research conducted by Leaker and Debra (2008) stated that
absenteeism rate generally reduce with the rise of wages. This statement is agreed by Akerlof
(1984) mentioned that when staff receive a higher salary, the cost of the foregone income
becomes higher, and as such they will shirk less. A similar point explained by Störmer, et al.,
(1984) they explain that staff see a higher wage as a gift from the company and that they will
repay this gift with greater efforts. This statement is further supported by Weiss ad Andrew
(1980) highlights that companies with higher wages can attract employees who are generally
high performance and reduce unemployment rate. From the research, the authors concluded
that there is strongly related between salary and absenteeism, as high wages will make an
employee to put more effort at work and be less absent. Hence, this research only focus on
America and cannot be applied to all country due to cultural differences.
2.2.4 Demographic factors (Age)

While Khamisa, et al., (2015) recognized work-related stress as a main reason for
absenteeism, the author goes on to suggest that future studies in this areas should also be
addressing the influence of other factors, especially demographic factors such as age and
gender for these factors are seen to have significant influence on work-related stress. Based on
the study by Nicholson and Nigel (1977), found that in general, young employees have a larger
rate of absenteeism than older employees. However, older employees tend to have longer
absenteeism especially to those over the age of 50. By contrast, Drago, et al., (1992) explain in
their research, the higher absence rate among younger workers can be expected because of the
greater opportunity cost of forgone leisure. The result shows that different view and opinion
from this two literature. Therefore, age may influence absence rate but not applied to all country,
cultural and attitudes different exists.