Just-in-Time Production, Work Organization 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. Using an employee/employer-matched data set, we investigate the relationship between the firm's production methods and the generosity of its sick-pay. The results suggest that firms that might be expected to value reliability highly, characterized as those that use just-in-time, are more likely to provide less generous sick-pay. Those findings survive when we control for the use of complementary policies that buffer production from absence shocks.