Could the same system work for a smaller business and how would you go about it?

For businesses that offer contractual sick pay, that is, those who voluntarily pay more than the Statutory Sick Pay level, the results of Tesco’s experiment could be worth looking out for. Adopting the scheme, or a variation of it, could reduce unnecessary absenteeism, but it is not a straightforward process.

Daniel Naftalin, a partner at law firm Mishcon de Reya, points out that there are potential drawbacks to Tesco’s scheme, which in its basic form he calls “a stick with no carrot”.

Chief amongst these drawbacks is the likelihood of genuinely sick people “coming into work when they are too ill to do so, infecting other people and making mistakes” Conversely, “employees who would take a day off for a hangover, for example, may spin their absence out beyond three days” in order to get paid for their absence.

However, Naftalin points out that a variation on the scheme may work, for example, another of Tesco’s experiments whereby 12 weeks of work without absences is rewarded with food vouchers.

A business considering adopting this kind of policy would need the agreement of its employees as it involves changing the terms of the contract, although it would be possible to simply change the contract for new employees while keeping existing employeesÂ’ contracts the same. If appropriate, the employees’ union will also need to be consulted.

Even if the Tesco scheme is not your cup of tea, Naftalin believes it is worthwhile reviewing sick pay policies to give more flexibility to deal with problems.

However, he warns that firms must be very careful not to fall foul of disability discrimination laws.

“There is a danger of calling someone a malingerer for not coming into work due to back problems, but those back problems could turn into a serious medical condition.” Investigations must be done into suspicious absences, starting with discussions with the employee in question and moving on to medical experts and occupational health practitioners if necessary.

What measures can you take to minimise the amount of days employees are absent?

Olwyn Burgess, expert at recruitment portal Monster.co.uk, the sponsors of our People Channel, says that in order to deal effectively with absenteeism, staff should be very clear about the company policy.

Enforce strict ‘absence’ procedures

“A staff handbook is an ideal way to state policies clearly. Areas such as holidays, sickness and absenteeism should be included and clearly outlined,” she says.

The handbook or procedures should cover the following:

• What people should do when they are ill, such as who they should notify
• When should they notify any illness?
• When do they need to provide a doctor’s note?
• On their return, what should they do?
• How much sickness time in terms of days is acceptable in any year and what happens if this is exceeded?

Documenting the number of days of absence, and reasons for this absence on a form is also a good idea, as it will allow you to monitor the situation more effectively and identify any potential problems. According to Burgess, early identification of problems is important to enable the situation to be nipped in the bud rather than allowing it to escalate.

“If processes are in place and well documented and communicated, managers are able to act on correct information rather than ‘hunches’ or impressions. It may seem onerous and time-consuming to put these processes in place, but it will save a lot of time and emotion in the long term,” affirms Burgess.

Identify the reasons for absences

When an employee returns to work after a long period of absence, a ‘return to work interview’ should be carried out. This will ensure that you are taking an interest in your employees’ welfare, and will make them realise that their absence has been noted.

There is also a two-way benefit here – an informal interview will give an employee the chance to bring up any problems or concerns that could be the cause of absences. It’s also a good idea to involve a line manager, as it’s important to create an atmosphere where the employee can feel at ease.

Consider incentives to motivate staff

Causes for absence are most usually linked to employees’ dissatisfaction with their jobs or an unstimulating work environment. Consider offering incentives that will encourage your employees to turn up, and be ready for work.

For example, you could offer extended lunch hours on agreed days, promote healthy eating or even offer those who have a good employment record an extra day of holiday each year. This can seem like extra costs to take on, but it could save you more in the long-term. If you offer sick pay, consider whether your scheme is motivational.

Think about introducing flexible working or policies that are family-friendly – recent research has highlighted that this can be effective with employees.

However, as with sickness absence, be sure to monitor stringently the effectiveness of any incentives you put in place.