Managing employee attendance is a crucial responsibility of the HR department. Understanding the extent of the operations, strategy concepts, and optimal, time-efficient practices is vital for efficient employee management in any sector.
This guide thoroughly reviews all components of the attendance system, along with the primary responsibilities of an HR Manager – who is in charge of employee attendance and workforce management.
Before diving into the components of an attendance management system and its primary roles, let us figure out what attendance is and why its management is necessary.
What is Attendance?
Attendance is the activity or state of being present at work. However, being present while following corporate policies is of the essence. Absence from work is the inverse of attendance.
Although, it could be a more straightforward process. In most firms, an employee must be present for a certain amount of hours for a certain period to be deemed as ‘Present.’
For example, if an employee arrives at work at 9:00 a.m. and leaves after only one or two hours, the employee would be ‘absent.’ The employee must be present from the start of the working hour to the end of the shift.
Attendance may imply putting in 9 hours of work per day for teams that are not customer-facing or whose work is not time-sensitive. For example, the working hours of your business could be from 9 a.m. – 6 p.m. Anyone who works for less than 9 hours could be marked ‘absent,’ or you could specify your own rules within the attendance management system (we will get to this eventually).
Apart from the basic definition given above, attendance can be seen as a catch-all for various issues such as absenteeism, time discipline, accounting, workforce management, productivity, etc.
What is Attendance Management?
Attendance management is a collection of activities and personnel processes required for time accounting, discipline, productivity, and statutory compliance.
As we saw in the last section, the attendance management system comprises several components. These subsystems must function well for the overall strategy to function correctly. An administrator’s responsibility is to set up and maintain each subsystem efficiently daily.
Attendance management necessitates the development of attendance policies, such as:
- Shift scheduling and management
- Maintaining and monitoring attendance devices and registers
- Keeping accurate timesheets
- Managing and paying overtime employee
- Communications and alerts: processing raw attendance data Daily, sharing live attendance data with employees as feedback, making announcements, and so on.
- Attendance processes such as attendance regularisation and overtime approvals are monitored.
- Upholding attendance policies through disciplinary actions
- Statutory observance
- Generating MIS reports and gaining insights
- Individual and collective absenteeism tracking
- Maintaining a help desk for employee inquiries and support
Is Attendance Management Necessary?
Tracking an employee’s attendance is critical to your firm’s profitability, dependability, and reputation. Attendance management is necessary for seven significant reasons:
Accurate Payroll Inputs
Attendance inputs are critical for accurately calculating employee compensation. Salaries are paid based on the number of days worked, which is determined by attendance records. Furthermore, attendance data is utilized to compute the following:
- Shift Allowances
- Attendance Bonus
- Overtime compensation
Smooth Running Of Operations
It is not just one employee’s productivity that is in danger, but also the productivity of the team and the corporation. A team member’s absence causes coordination problems, delays, and increased work-in-progress (WIP) or inventory. When this occurs numerous times with various persons, the impact of lack of dedication multiplies rather than adding up.
Time spent doing any work is a vital input that is variable in human-labor production. So, more time at work equals more production.
Unpredictability, delays, and inconsistent quality delivery result from a lack of discipline in the business. Discipline is also contagious. It inspires other employees to embrace the harmful habit, exacerbating the problem.
When conscientious employees observe that insubordination is accepted and disregarded, they become angry and resentful. They may eventually leave the firm in quest of a better job, while the employer brand suffers significant harm.
Time discipline aids in the reduction of unpredictability and delays in seamless management.
Many businesses, such as hospitals, retail stores, and factories, have several shifts. Excessive manufacturing demand, for example, may require workers to work overtime outside usual working hours, on weekends or holidays.
Solid time-tracking systems and attendance accounting practices are critical for cost efficiency and increased employee satisfaction. A faulty system will result in disagreements, increased labor costs, and stress for the administrators.
The purpose of timesheets is to ensure that employees are paid just when they are at work. Some people may abuse the system without proper timekeeping and commit time theft; for example, by arriving late, leaving early, taking too many coffee breaks, etc.
The best way to prevent time theft is to have a foolproof system for tracking attendance and constantly and carefully enforcing rules.
With an overtime policy in place, some employees will drag the designated work they might have completed during regular hours to overtime hours. Such a practice is merely another form of time theft. Once again, proper record-keeping and time-tracking can help to reduce misbehavior.
Attendance data is also required for several compliance reports. These reports cover hours worked per day and week, shifts performed, overtime hours worked, and information on days ‘present’ and days when an employee is ‘on leave’ or ‘absent.’
These reports are required in India under several Acts, such as the Factories Act, Shops and Establishment Acts, etc.
What Types of Industries Need Attendance Management?
Since employee management is one of the foundation pillars of a successful business, businesses in the digital era must have a proper attendance management system.
Factories, assembly plants, retail stores, schools, hospitals, software businesses, financial institutions, and many other organizations require an effective attendance management system.
Organizations that work various shifts must guarantee that personnel is present during shift times to ensure smooth job processing.
Many industries expect their employees to work long hours during the day or on weekends. Time monitoring is vital for complying with legislation and appropriately paying overtime.
Is Attendance Management Necessary?
Wouldn’t it be amazing if we didn’t worry about time and attendance? It’s essential addressing this topic because tracking attendance is a daily activity that grows with headcount.
Some firms are experimenting with a concept known as ‘Result Only Work Environments (ROWE),’ which aims to beat the clock. Employees in such an organization are free to come and leave as they choose and are solely responsible for the results.
A ROWE organization does not require time tracking because there is no attendance requirement, and employees make their regulations.
Knowledge industries include many industry verticals, such as information technology, pharmaceuticals, healthcare, education, science, finance, and consultancy. The quality of time, energy, and cognitive state are more critical factors in productivity than the number of hours a knowledge worker works.
Any firm that directly serves clients, on the other hand, is required to operate during business hours. All teams, including knowledge workers, must collaborate for rapid service and short lead times.
Another contradictory component is overwork because knowledge work requires as many hours as you can offer with no end in sight. In such cases, timekeeping may teach discipline, resulting in increased production and less burnout.
The Attendance Management System
Managing staff attendance is a difficult task. The entire attendance system has several characteristics or sections. These components, like any scenario, are interrelated and require the system to function correctly.
Attendance Data Gathering
A biometric punch-in or timesheet stamp is necessary on an employee’s arrival and departure from work. At the very least, a log entry must include the employee’s ID and a timestamp. The door information and movement type (in/out) for establishments with many access points can also be helpful.
Maintaining a paper-based attendance register and allowing employees to mark their attendance daily is one of the oldest methods of tracking attendance data. There are numerous methods for taking attendance nowadays, ranging from biometric hardware devices to Geo-tracking based attendance recording.
Accurately obtaining daily swipe data of employees is critical because everything else is dependent on this data. Since this is a daily activity, the volume of this data is directly related to the headcount of employees. It also accounts for the frequency of entry or exit of employees.
The automation of collecting and processing attendance data aids in the reduction of administrative work and expenditures.
An organization’s attendance policy specifies employee shift timing, working hours, and disciplinary procedures. An attendance policy is divided into the following sections:
Shift Definition and Shift Rotation Policy
- Policy on Regularization
- Overtime policy, including eligibility requirements and pay rates
- Penalties for rule violations
- Workday schedule, including holidays and vacation days
- The attendance policy must process employees’ raw attendance swipes and compute the hours worked, overtime, late arrivals, etc.
Shift and Production Planning
Production planning and shift management are routine tasks undertaken by a firm’s HR administrators or team managers.
A shift roster is a list of personnel for a specific shift during a given period (week or month). Shift rotation ensures that personnel rotates between shifts, such as the morning and night shifts, when working numerous shifts.
We must pull other information and perform certain computations during attendance processing to get our results. We require:
- The attendance policy (described above) in all of its facets
- The shift roster holiday schedule
- The employee’s vacation status for the day, any additional permissions or exclusions for the employee
Consider employee X, who has the following attendance swipes scheduled for Thursday, November 3, 2022.
- X, 2022-03-12:12:10+05:30, IN, Door1
- X, 2022-03-12:22:10+05:30, OUT, Door2
We require shift information to assess an employee’s attendance status and actual hours worked. Assuming you have a General Shift from 9:00 a.m. to 5:00 p.m., we may calculate the employee’s total working hours as 9 hours.
Here is where the attendance policy comes into play. If the policy states that only work done during shift hours are counted in terms of payment, the total number of hours worked will vary.
If we note that the employee is 12 minutes late for work, his actual time data can be found from the timestamp using biometric systems or a manual check-in and check-out.
Assume the individual worked till 8:00 p.m. and the company had an overtime policy. The extra hours worked could be calculated as 2 hours in that situation. This extra hour may be eligible for overtime, depending on the overtime policy and rate.
As seen in the preceding example, attendance processing entails the following steps:
- Calculating the actual hours worked, total hours at work, overtime hours, late-in minutes, early-out minutes, and so on.
- Recognizing infractions following business policy
- Computing and informing employees about the violations to avoid false positives
Daily Vs. Monthly Processing
Many organizations that still need automated attendance systems choose to process attendance once a month. Some businesses do it on a weekly or daily basis. The benefit of daily attendance processing over monthly attendance processing is that feedback to employees is instantaneous, resulting in improved policy enforcement.
However, determining an employee’s attendance status within a day or two is impossible. Consider an employee who did not arrive at work on Monday. Such a situation cannot be considered “unauthorized absence” because the employee may request sick leave on Monday two days later.
Since a violation from last Monday may be regularised a week later, the solution is to review attendance daily for the entire month.
Computerized systems can eliminate labour while providing real-time attendance processing daily. Organizations without automated systems prefer to handle attendance monthly rather than daily due to the enormous strain and loss of time. In exchange, you give up effective policy enforcement.
Registers of Attendance and Overtime
We must receive a detailed attendance record for an employee after processing attendance for a day or the entire month.
An overtime register contains an employee’s total overtime for the month. This data is routed to the payroll administrator for overtime compensation.
Exceptions and Violations in Attendance
After processing attendance, we must determine whether employees comply with the attendance policy. In case of a policy infringement, we may notify employees within a grace period. In addition, we must apply fines for infractions.
There may be multiple violations that the attendance management system can detect. As an example:
- Habitual tardiness (with a grace of 2 times per month allowed)
- Early habitual departure Continuous absence for three days or more
- A decrease in actual weekly hours worked (for example, against the required 40 hours)
The administrator must communicate the feedback to the employees and their management as soon as possible because there may be legitimate causes for the variance, such as equipment malfunction or delay due to official external duties.
Employees can recall the scenario and explain justifications for the violations if they receive early criticism. On the other hand, it is difficult to recall the reason for a violation after a month. Delays of this nature typically result in disagreements and high employee discontent with the attendance procedure.
Regularization of Attendance
Even if an employee is present on a working day, they may be labelled as absent, late for work, or without a punch-in or punch-out. Such false positives arise for various legitimate reasons, including hardware faults, external office duty, crises for which the employee acquired clearance, etc.
Consider the frustration level of an employee who works hard all day yet is absent or late.
When accused of time theft, an employee correlates with being less devoted and engaged at work.
The solution lies in politely telling the employee about an error in the records and suggesting that the attendance issue be resolved before the end of the monthly cut-off date. The employee can correct the mistake without any negative comments or consequences.
The earlier the input for such an act is received, the easier it is for an employee to resolve the issue. It can be tough to recall and justify why someone was late for work a month ago. Employees generally believe there must have been a valid reason, but because they cannot justify it, they will feel victimized by the inept system. Conversely, some employees may be absent but claim forgetfulness as an excuse.
Daily attendance processing is an excellent practice for all of these reasons. It encourages accountability without causing unhappiness or harming the employer’s reputation. We can quickly warn staff of such situations and strictly enforce the regulation.
Finalization of Attendance
As the attendance period cut-off approaches, we must make a final decision on attendance management issues and prepare payroll advice for the month.
All exceptional instances are assessed following the attendance rules, and varied punishments are given to each case. As always, management has the authority to override and pardon specific incidents.
Following the completion of the attendance audit, we have a list of infractions for various employees and the related sanctions.
Numerous policy infractions exist, such as unlawful absence for the entire day, persistent tardiness, theft, etc. Penalties for each of these offences may differ.
We refuse the salary for that day with a loss-of-pay (LOP) entry for unlawful absence. Instead of deducting salaries, we sometimes subtract a day from leave balances.
Other policy infractions are at the discretion of the firm and its opinion on pursuing workplace discipline. Assume an employee is consistently late for three days in a row. In that situation, we could punish the employee in a variety of ways:
- subtract half a day’s leave from the total leave balance
- subtract half a day’s pay from your income
- penalize you Rs 500 (irrespective of the wages earned)
The finalization of attendance is when the rubber meets the road. When policies are not enforced, and no repercussions are imposed for breaking them, it encourages indiscipline and disrespect for the company’s policies. Worse, inconsistent enforcement fosters sentiments of bias, injustice, and dissatisfaction.
Inputs for Leave and Payroll
The finalization procedure produces a statement detailing various leave and LOP modifications for all employees for the attendance period.
The leave inputs should result in the employee’s balance being modified following leave deductions.
Payroll inputs should minimize the total number of working days for the month and the salary. Furthermore, deducting any fines from the gross compensation would be best.
Analytics and Reporting
Various state and federal regulations demand the preservation of leave and wage data. As a result, an attendance register in the approved format must be kept for all personnel each month.
In addition to compliance reporting, the company must analyze the overall attendance report monthly to gain insights. Individual absenteeism is a critical signal from an employee that should be studied and addressed. Overall, absenteeism is far more concerning. If corrective action is performed, it could benefit the organization’s overall health.
Aside from being done on a monthly and organizational level, attendance analysis should be done for extended periods and can drill down to the departmental, team, or individual levels. You should also link employee attendance data with external factors such as the holiday season, the end of the year, and so on.
Employees will also require a total attendance and leave calculation for the entire month. You must also share the overtime computation with employees if there is overtime.
Employee complaints about attendance devices, access cards, or biometric identification issues might occasionally arise.
Delays in resolving issues result in additional staff costs, erroneous attendance statistics, poor policy enforcement, and employee unhappiness.
A web-based or cloud Employee Portal can assist administrators in minimizing their workload by providing self-service choices to employees. It results in reduced workloads, faster resolution, transparency, and increased employee satisfaction.
The attendance system requires a seamless connection with various systems to run smoothly and efficiently.