Just-in-time Production, Work Organisation and Absence Control

Studies of sick pay and absenteeism have traditionally treated absence as a worker-related phenomenon. There are good reasons to suppose, though, that firms’ incentives to control absenteeism are not uniform. This paper presents what we believe to be the first evidence for relationships between the nature of a firm’s production method ) and its personnel policies, particularly as they are directed towards absence control. Such evidence is hard to assemble because data sources containing information about both technology and monitoring and incentive schemes are rare. Indeed, as far as we know the French data we use here are unique in this respect. The results suggest strongly that firms’ choices of personnel policy are driven in a significant way by reliability considerations. Firms who might be expected to value reliability particularly highly, which we characterise as those adopting Just-In-Time (JIT) methods, are more likely to monitor absence and tend to be more concerned to provide appropriate incentives, in the form of additional and/or more generous sick pay. However, firms are confronted with a variety of ways to handle the extra rigidities introduced by JIT. We show that our results are robust to firms’ choices of methods, so that for instance, firms that have flexible teams, enabling substitution of absent workers, can be more generous with sick pay, ceteris paribus, than one without. Despite these complications, our basic hypothesis, that absence control is on average more severe in firms using JIT, survives. It is also true that JIT firms have a different demographic profile from others, employing fewer women and having younger workforces. ACKNOWLEDGEMENTS: We thank the participants to the seminars at University of Newcastle upon Tyne, of the EALE Conference in Blankenberge, AFSE Conference in Lyon and Journées de Microéconomie Appliquée in Rennes. We are grateful to the British Council and the French Ministry for Foreign Affairs for financial support under the Alliance programme.