Offering employees incentives for good attendance has little impact and can even increase absenteeism, according to new research from the Frankfurt School of Finance and Management.
Researchers from the Frankfurt School teamed up with colleagues at the University of Köln to carry out a study of apprentice retail staff, testing two types of reward scheme.
Some were offered bonus points for full attendance, which were converted into rewards at the end of the year-long experiment – either €60 (£50) or an extra day of holiday for every three bonus points.
The researchers 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 extra days of absence per year, per employee.
The time-off bonus had no effect on overall attendance at all.
Attempting to explain the findings, Timo Vogelsang, assistant professor at the Frankfurt School of Finance and Management, said: “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.”
The backfiring effect of an attendance bonus also persisted among more recently hired apprentices, even six months after the bonus was removed.
According to the researchers, the findings showed how incentives could shape social norms and how the effects can persist. They advised managers “to examine prevailing social norms before introducing monetary incentives”.
The research follows warnings that attendance bonuses in the UK can leave employers at risk of indirect discrimination due to disability, including chronic illness.
Employment tribunals have ruled against companies that introduced attendance incentive schemes that failed to make allowances for protected reasons why employees may need to take time off.