Impact of Absenteeism on the Bottom Line - Research Proposal Example

Research Proposal on the Impact of Absenteeism on the Bottom Line s Table of Contents 0 Introduction This present paper is a research proposal about a study that seeks to investigate the effect of absenteeism on a company’s bottom line or profitability. Therefore, the paper will be proposing for a research to be carried out in this line of study. In particular, the research will propose for the study to use McDonald’s restaurants that are located in the United Arab Emirates as the case study or data collection centre, and this will mean that McDonald’s will be used to investigate the effects of absenteeism on a company’s bottom line. The research proposal will begin by stating the problem statement; secondly, it will state the theoretical framework alongside a brief literature review of the topic. In the third section, the paper will state some of the hypotheses that the research would seek to test. The subsequent sections will cover on the research methodology that will be used during the study, and this section will describe the research design that will be implemented, data collection methods that will be used, data analysis methods that will be applied, and the timeframe as well as the budget for conducting the research. 2.1 The problem statement Absenteeism is described by Tiwari (1995), as the act of a person failing to be present at a specific time in a specified location even thou he or she was scheduled to be present. Johnson (2011) in his studies described absenteeism as the act of being frequently away from work or school, especially without good reason. Absenteeism creates a gap that needs to be filled in order for normal operations to resume and depending on the nature of the position of the absentee, at times the normal operations in a workplace can come to a complete halt if the absentee holds a key or crucial position that is the pivot to the operations at the workplace. For example, in case a hospital has only one neurosurgeon then his absence will mean that all the surgeries that were schedule to be conducted by him or all the patients who had earlier booked an appointment to see him will have to reschedule until when the neurosurgeon is present again. However, when a waiter fails to show up for work another waiter or another member of staff of the restaurant can cover for him and his absence will not have a significant impact on the normal operations of the restaurant. This is mainly because of the nature of the role of a waiter, which does not involve any complexities or any specialised skills to perform the task. From the case examples given above, it can be deduced that the impact of absenteeism on the bottom line depends on the nature of the role or the capacity of the absent employees. This is to say that if the nature of the role or capacity of the absent employee is crucial in the normal operations of a business then there is likely to a significant impact on the bottom line of the company. However, if the nature of the role or capacity of the employee is not crucial then there is likely to no or less significant impact on the bottom line of the company. However, Cascio and Boudreau (2010) stated that in the latter the impact would be significant if there is no employee to cover for the absent employee because of limited number of staffs or tight work schedule for each employee. Generally, in larger organizations that have a big number of workforces, the staffs normally take advantage and fail to report to work without any proper reason or without following proper procedure to be granted leave. The absenteeism creates major inconveniences since operations within the workplace cannot continue in the normal pace and others will have to make sacrifices on their part in order to handle tasks usually handled by the absent party. Cascio and Boudreau (2010) stated that such inconveniences at times reflect or show on the company’s bottom line since normal operations were impaired and the workplace failed to perform at optimum level thereby affecting the amount of revenue that could be generated. In the case example, of McDonald’s restaurant it can be argued that if a waitress failed to show up for work without prior notice then the restaurant will be forced to operate below normal capacity of staffs. This will mean that during peak hours customers will be served at a slower pace and because of the increased workload the waiter will be in a tensed mood thereby failing to serve customers with excellent customer care service. In a scenario whereby a cashier is absent without prior notice to the restaurant manager then a waitress will be forced to operate the cash desk or the cash desk will be closed and all customers will be forced to line up and pay at the only cash desk that is open. The absence of a cashier will equally create inconveniences to other staffs who will be forced to bear the burden of an extra workload, while speed of service will be low and quality will also be affected. Worst case scenario is when a chef or cook is absent without prior notice to the restaurant manager, this will mean that certain dishes will not be prepared during that day especially if the chef or cook is a specialist in certain dishes, secondly, customers will wait longer to get their orders, and the quality of dishes may be poor due to the disorganization at the kitchen. In the above scenarios, McDonald’s will definitely record low sales during those particular days when a crucial member of staff is absent mainly because some customers will not be willing to wait longer for service and some may get agitated by the poor service and the may decide to eat elsewhere. It is of essence to note that if the absenteeism continue to occur frequently, then it is more likely that the restaurant will lose many customers and equally the sales level will decline significantly, thereby leading to a significant reduction in profit. 2.2 Theoretical framework The relationship between absenteeism and a company’s bottom line Figure 1: graph showing the relationship between absenteeism and a company’s bottom line. The above chart indicates that with an increase in absenteeism a company is likely to experience a decrease in the bottom line margins. Literature review According to the writings by Ryner and Adam-Smith (2009), absenteeism exists in three different categories that consist of scheduled absences, which is personal or vacation time. Unscheduled absences comprise of compensation leave, and sick days while partial shift absences is absenteeism in the form of taking longer lunches or breaks contrary to the scheduled period, leaving work early, or arriving at work late. Mullins (2007) his studies stated that a survey on absenteeism indicated that among the top reasons, contributors towards workers absenteeism include mental illness and anxiety, or depression, which contributes to 66% cases of absenteeism according to the survey. The other leading causes of absenteeism at the work place include poor relationship with the supervisor or manager, which discourages the worker from reporting to work. Additionally, childcare issues that forces mostly female workers to stay back at home, conflicts at the work place that discourages a worker from going to work, and issues revolving around parenting such as urgent need to go to a child’s school or taking the child to the hospital. Lastly, drugs and alcohol issues impair the normal reasoning of a person and secondly, it affects the mobility of the intoxicated person, which means that he or she cannot report to work when under the influence of drugs or alcohol. According to the studies by Tiwari (1995), absenteeism has an impact on the bottom line of a company and this is attributed to its various ramifications such as lost productivity of the staff who was absent. An absent member of staff causes the workplace to operate in a lean manner during his/ her absence and therefore, there are certain needs or targets that would not be achieved. The second ramification is the company has to incur high cost because of overtime charges from employees who cover for the absent member of staff, this contribute to increase in expenses and reduction in profitability. The third ramification is the extra cost of hiring temporary worker to cover for the absent worker. Fourthly, there is possibility of losing business or customers because of them being dissatisfied with the quality of service since when a company is operating while understaffed, productivity and quality of service decreases. The fifth ramification is that reliable employees who always cover for the absent employees get demoralized and they may opt to start skipping work willingly in order to avoid always bearing the burden of absent employees. 2.3 Purpose/ scope of the study The research will mainly seek to investigate how absenteeism at the McDonalds’s restaurants in the United Arab Emirates affects the restaurants’ bottom line. While conducting the investigations, the researcher will also seek to establish which ramifications of absenteeism affect the bottom line directly and indirectly. The research will cover a minimum of four out of the eight McDonald’s restaurant that are located within the United Arab Emirates. The willing employees of the restaurants as well as the customers will be involved in the data collection process. 2.4 Relevance of the study This particular study is relevant because Johnson (2011) cited that workplace managers in the United States are always faced with the thorny issue of unscheduled absenteeism, which cost a conservative figure of $3,600 per hourly employee per year, and $2,650 per salaried employee per year. This therefore means that the current study will address an ongoing problem at the workplace and it may contribute significantly to the existing body of knowledge surrounding the same topic. In particular, this study is relevant because it will help the managers of the selected McDonald’s restaurants to know the cause of absenteeism within the workplace, possible solutions to this problem, and it will even show them how absenteeism directly decreases their bottom line margins. 2.5 Hypotheses development Frome the theoretical framework described above, the hypotheses that can be developed are as follows; First hypothesis Null: there is a direct impact of absenteeism on the bottom line of a company Alternative: there is no direct impact of absenteeism on the bottom line of a company Second hypothesis Null: There need to be full or optimum number of staffs for business operations to continue smoothly and for productivity to be high Alternative: It is not a must to have the full number of staffs for business operations to continue smoothly and for productivity to be high 3.0 Research methodology This section of the proposal spells out the procedures and the methods that the researcher will employ in achieving the objectives of the research as highlighted in the previous sections of this paper. It defines location of the study, research design, data collection methods, data analysis methods that will be used, and the timeframe as well as the budget. The research is supposed to start with the clear understanding of the research objectives. Success of the project will depend on the provision of satisfying information in line with the research objectives and questions 3.1 Research design First, this proposed research will be from a ‘positivist’ point of view or philosophy. This philosophy has been selected as it encompasses interconnecting absenteeism with the bottom line of a company. In regards to the research approach, the most suitable approach that was selected which conforms to the objectives of the study is the deductive approach, which means that the researcher will deduce findings from the data that he obtains from different sources. However, there is need to ensure that the investigations remain unbiased since Saunders et al. (2007) lamented that this is a common problem with deductive research. The inductive approach will also be applied since it will seek to condense extensive and varied raw data into a brief, and establish clear links between research objectives and findings. Besides the approach and the philosophy that will be used, the researcher will also incorporate primary and secondary research methods into the study. Primary research method involves the collection and use of information that does not readily exist while secondary research is the collection and use of data that is already in existence such as scholarly books and articles. Another key aspect of research design is the strategy that the researcher will use to attain the research objectives. The main research study that will be applied is the case study strategy, which involves the, investigation of a particular contemporary phenomenon in the real life situation using multiple sources of evidence like financial statements; this is according to Saunders et al. (2007). More elaborate explanation on the nature of the case study as part of the research design was given by Dick (2005, p. 78) who viewed case study as a representation of ‘a specific way of collecting, organizing, and analyzing data’. The case study strategy will be applied in this present research in the sense that the study will uses McDonald’s restaurants in the United Arab Emirates to investigate the impact of absenteeism on the bottom line of the restaurants. 3.2 Data collection The questionnaires will be the only data collection tool that will be used in this research. Use of a questionnaire as a quantitative method for collecting data from the sources is the most appropriate method of collecting mass responses and as such, providing a good method of comparative analysis. Saunders et al. (2007) stated that questionnaires are also versatile since quantitative data can be easily gathered and analyzed from the numerous open-end and closed questions enlisted on the forms. Through the standardization of questions, the data can be easily interpreted and the results can be compared and analyzed. Semi-structured questionnaires were considered for this research as they give better insight into the actually opinion of the research participants. The questionnaire will cover a number of data sources to find out opinions and views regarding the impact of absenteeism on the bottom line of the selected McDonald’s restaurants. The data collection process was scheduled to run for a period of two months whereby employees and customers of the selected McDonald’s restaurants in UAE will be issued with questionnaires. It is beneficial to note that the research centers during the data collection process will be the McDonald’s restaurant located at Mall of Emirates 1, Dubai Marina Mall, Arabian Centre, and Deira City Centre. The researcher will target a sample population of a 100 from these four restaurants. 3.3 Data analysis Since data is mainly collected through the quantitative approach, it means that quantitative analysis of data will be used. Apart from a few graphical analyses using the IBM Statistical Package for Social Science (SPSS) statistics, the analysis will also involve regression analysis to compare certain variables against the two hypotheses. 3.4 Timeframe and budget Timeframe The estimates show that the research project will take eight months as detailed in the Gantt chart below Activity April May June July August September October Proposal writing Preparation of instruments Data collection Data analysis and interpretation Testing frame work Report writing Submission of final report Budget Table below provides estimates of the requirements for this research Item Dirham Stationeries e.g. printing papers, toner, pens, writing materials, folders and binding 700.00 Transport and accommodation 1500.00 Bottled water and lunch for the researcher 250.00 Laptop and printer 2000.00 Total 4,450.00 References Dick, B. (2005). Grounded Theory: A Thumbnail Sketch, Research Papers in Action Research, Available at http://www.scu.edu.au/schools/gcm/ar/arp/grounded.html Accessed on [03. 02. 2013] Saunders, M., Lewis, P. and Thornhill, A. (2007). Research Methods for Business Students, (4th edition). London: Prentice Hall. Tiwari, K. (1995). Absenteeism and industrial development: Causes, impact, and control measures. India: Deep & Deep Publications Johnson, C. (2011). The impact of employees perceptions of the leadership characteristics of immediate supervisors on job-related absenteeism. ProQuest, UMI Dissertation Publishing Cascio, W. and Boudreau, J. (2010). Investing in People: Financial Impact of Human Resource Initiatives. London, FT Press Ryner, C. and Adam-Smith, D. (2009) Managing and Leading People (2nd edition). London: CIPD Mullins, L. (2007). ‘Management and Organizational Behavior (8th Edition). Harlow: FT/Prentice Hall. Read More