By having this loophole in place, management simply allowed the employees to walk through it. Moreover, management has failed to address the issue properly by firing the dishonest employees. They are stealing from the company and should be removed. Management can address the issue by closing the loophole and dismissing the worst offenders. In addition, the paid absence plan contributed to a culture of entitlement. Given that entitlement is the cause of 11% of all absences, the company needs to avoid creating such a culture. By paying employees to perform the most basic of all tasks -- showing up -- the company fostered this entitlement culture. It is little reason that the employees subsequently abused this. The company has major cultural issues that the paid absence plan exacerbated rather than ameliorated.

4. I would recommend the following plan to USA Motors. The first is to remove the loophole. This could be done by forcing the classification of missed days into either physical illness or paid absence. That classifications such as "unexcused absences" are not charged to the paid absence account of the employee is unacceptable. These must be charged against paid absence and the managers responsible for this must be held accountable. If the loophole cannot be removed, then the entire paid absence plan needs to be removed.

The second recommendation is that USA Motors needs to fire its worst offenders. There is no reason to keep employees...

The carrot approach has been abused by the employees and it is now time to utilize negative reinforcement. I recommend letting go the top 50% of those identified as chronic offenders in the first round. This may require additional steps, such as inputting absenteeism into performance reviews to ensure that the employees are fired for cause.
The third recommendation is that USA Motors should work to change the corporate culture. Absenteeism is often a symptom of greater problems, such as stress, a poor work-life balance, a toxic environment and other considerations. USA Motors needs to focus on building a culture where employees want to show up for work and where they do not have a sense of entitlement that has them thinking they should be rewarded just for showing up. There needs to be a focus on the work environment, and on providing intrinsic motivation to work at a higher level. The company's focus on extrinsic motivation reveals that it simply has not been sufficiently creative in addressing this issue.

Works Cited:

Amble, B. (2005). Bribery reduces absenteeism rates. Management Issues. Retrieved May 1, 2010 from http://www.management-issues.com/2006/8/24/research/bribery-reduces-absenteeism-rates.asp

CCH. (2006). CCH survey finds unscheduled absenteeism up in U.S. workplaces. Wolters Kluwer. Retrieved May 1, 2010 from http://hr.cch.com/press/releases//absenteeism/102506a.asp