Attendance Incentives: Are They Good For Employers And Employees?

Recently, the case of a pest control technician being sentenced to five weeks’ jail for potentially exposing others to the risk of COVID-19 infection gained public attention. The technician’s reason for going to work despite doctor’s orders and repeated admonishments to stay at home while exhibiting respiratory infection symptoms is a $100 attendance incentive.

While it is socially irresponsible of him, President Halimah Yacob also pointed out that the attendance incentive does make a significant difference to lower wage workers. For someone earning $1,500 in monthly basic salary, $100 forms almost 7% of his salary and could make a difference for his family’s living expenses.

So how and why do attendance exist and are they necessarily good or bad?

Attendance Incentive Is An Employee Incentive

While a monthly salary and good employee benefits scheme are compensation for our work, the truth is that most employees do take them for granted. Legally, employers can only deduct from employees’ salary in very specific circumstances in Singapore. You can read more about these legal deductions in our article: 8 Things That Employers Are Legally Allowed To Deduct From Workers’ Salary (According To The Employment Act).

Instead of variable salary, some employers choose to implement employee incentives to motivate certain employee behaviours. Some examples of employee incentives include performance bonuses, rewards and recognition (including long service award) and employee gifts.

Read Also: Annual Wage Supplement (AWS), Annual Variable Component (AVC), Monthly Variable Component (MVC): Here’s How The Flexible Wage System Works

An employee incentive meant to incentivise employee attendance, attendance incentives have been typically implemented for jobs that show high levels of absenteeism. For example, shift work is more likely to have attendance incentives. Certain industries that show high staff turnover may also be more likely to implement attendance incentives.  

Originally intended to minimize malingering where employees report sick to avoid work, attendance incentives can have the opposite effect of encouraging employees to report for work even when they are genuinely sick.

Employee Incentives Can Incentivise The Wrong Behaviour If Not Implemented Sensitively

In this case of the pest control technician, the details regarding the employer’s actions have not been disclosed. Instead of speculating on what the company’s actions were or could have been, we should reflect on the employer’s role in this matter.

In this current pandemic climate, employers need to be sensitive to employee health and prioritise public health and safety. In such times, it may be prudent to suspend attendance incentives. Instead, employers need to communicate that public health takes precedence and employees should not risk exposing their fellow colleagues to possible infection.

Employers need to be aware that incentives can backfire under certain circumstances. In fact, multiple organizational studies have shown that monetary incentives for productivity tend to show diminishing returns. Instead, companies may need to rethink their organizational environment to encourage the desired employee behaviours instead of using monetary incentives.

When used in the right circumstances, incentives can drive the right behaviours. For example, commission-based salespersons tend to generate better sales. However, they may also end up selling products with the highest commission instead of the products best suited to the customers. This may lead to lower rates of repeat customers (and thus lower future sales). Instead of using incentives as a panacea, employers need to use incentives carefully and address the root of undesirable employee behaviours.

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