COMP NEWS – New research from the Frankfurt School of Finance and Management indicates that offering employees attendance incentives actually has the opposite effect, effectively reducing rates of attendance.

Apprentices from 232 retail stores were assigned to a group with no bonus or one of two treatment groups which received a monthly bonus point if they had no absences for the whole month. Bonus points were converted into rewards at the end of the year-long experiment; either 60 euros (monetary bonus) or an additional vacation day (time-off bonus) for every 3 bonus points.

 

They found that neither type of attendance bonus led to a reduction in absenteeism. In fact, the monetary attendance bonus substantially increased absenteeism, by around 45% on average: the equivalent of more than five additional days absence per year, per employee. The time-off bonus had no effect at all

Researchers who conducted the study found that this was caused by the monetary incentive causing employees to view being absent as ‘normalized’, rather than going against their contractual obligations.

Prof Vogelsang says,

“Post-experimental survey results find that apprentices with the money bonus felt less guilty about being absent, despite not being sick, and also felt less obliged by their contract to always come to work. The monetary bonus led to absenteeism being perceived as a more acceptable behaviour as monetary incentives were being provided for a behaviour previously considered normal.”

In addition, the study showed that apprentices who were hired at a later date, after the incentives were lifted, continued to be absent at rates similar to those of when the incentives were in place. This pattern shows that incentives can shift company culture and affect behavior even when the incentives are taken away.

This backfiring effect of an attendance bonus also persisted among more recently hired apprentices, even six months after the bonus was removed. This shows how incentives can shape social norms, and how the effects can persist. Managers are advised to examine prevailing social norms before introducing monetary incentives.

To read more about employee attendance incentives, click here.

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