We have a number of people at work who are regularly off sick with no obvious cause. Instead of increasing pay like we do every year, we decided to introduce an attendance bonus, roughly equal to 3% of each individual’s pay which is paid every month, if they have no days off work for any reason. We have been doing it for three months now, and it seems to have made no difference to the ‘bad guys’, some of our good reliable employees are not happy, and we have now received a grievance from a disabled employee, who lost her bonus last month after a day off sick.

Peter replies:

You appear to have made a number of fundamental errors.

You do not appear to understand that people attend work and are motivated to do well by a range of different factors. Obviously, money is important, but to think that punishing people for not attending work by withholding some money due, is much too simplistic and misconceived.

You should start by considering why people are absenting themselves from work, as there could be a number of reasons, only one of which is down to actual sickness. It is quite possible that your communication methods and leadership styles are at fault in causing a bad atmosphere at work, which does not motivate people to want to work. There may be other causes such as bullying and harassment, poor health, safety and welfare at work provision, conflict or other stressors such as poor supervision or low control.

If you address these workplace culture issues, then you should move on to consider good quality return to work interviews to educate your workers, and maybe learn if there are other push factors that influence their attendance.  If there is no real reason that can justify continued absence, then consider taking appropriate disciplinary action (starting informally first).

Introducing a policy which is aimed at the minority, but appears to adversely impact on the rest, is rarely a good idea. It can be characterised as “He’s got a headache yet we are all having to take paracetamol”. It is not surprising that your reliable staff are feeling demotivated by losing out on a proper pay rise, because of the actions of a few, and your failure to take appropriate action to deal with them individually.

We are unsurprised to learn that the attendance bonus seems not to have worked.  There is plenty of documented evidence that such bonuses only work for a short-time, but sooner rather than later, cease to be effective.

You are also in trouble with your disabled employee in respect of a potential disability discrimination claim. Attendance bonuses can indirectly discriminate against some employees, if they are too generic in their interpretation, and fail to consider the genuineness behind an employee’s absence; for instance, those who are absent as a result of pregnancy-related illness or as a result of a disability, are likely to be discriminatory under the Equality Act 2010. Whilst an employer may have a legitimate aim to encourage good performance and attendance, such bonus schemes are invariably not likely to be deemed a proportionate means of achieving that aim. Therefore, the decision not to award a bonus is likely to constitute unfavourable treatment arising from disability. A well-designed bonus might recognise that disability or pregnancy related absence should not be held against the absentee. The problem comes in determining what absences are related to such protected characteristics.

It would be better to abandon the bonus and substitute a fair pay rise. You then need to tackle the causes of absence, using return to work meetings, to address the ‘bad apples’ who were causing you the problem in the first place.



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