Circuit Systems Case Write Up

810 words - 4 pages

Data Analysis and DecisionsCircuit Systems IncorporatedSection 1 - Executive SummaryThere is a concern of absenteeism within the company amongst the hourly employees. With each hourly employees only earning 18 days of paid sick leave, it was found that many of them use most or all of their sick leave well before the year is over. It has been determined that the reason is because many of them viewed paid sick leave as a "extra" vacation benefit, and dishonestly called in as being sick at their leisure. This has been a major conflict between the employees and management due in part to a restrictive vacation policy that includes one week of paid vacation time, and a few paid holidays.A two-point plan was developed and approved by the President to combat the abuse of paid sick leave. Workers will now be allowed to convert unused paid sick leave to cash on a "three for one" day basis to add a possible six days of pay each year. The second part of the plan is the development of a voluntary exercise program for the employees to participate in at a company expense of $200 that will reduce the company's contribution to health premiums. It was agreed that the plan should be given a one year trial period to see if it reduced the cost of absenteeism per hourly worker..Section 2 - Methodology and SolutionTwo years' worth of data (both before and after the program) was maintained to analyze and determine if the newly implemented program was effective in reducing the average cost of absenteeism per employee thus increasing productivity. The first step in the process was establishing a Null and Alternative Hypothesis.Null Hypothesis: The new plan has no effect on avg. cost of absenteeism per hourly worker. (The avg. cost of absenteeism per hourly worker is the same before and after the plan was implemented.)Alternative Hypothesis: The new plan does have an effect on the average cost of absenteeism per hourly worker. (The avg. cost of absenteeism per hourly worker is significantly different from before and after the plan was implemented.)The second step in the approach was to determine a few factors that included: the maximum amount of days used in the prior years, the cost of the days used for sick leave last year, the days used for the second year, the cost of the days used plus the days paid out for not being used, and difference in cost between the two years.Cost Before = ((8 hours * Hourly Pay) * Sick leave taken)Days Unused = Maximum amount of days (18) minus Sick leave afterCost after = (8 hours * Hourly Pay) * Sick leave after) + ((8 hours * Hourly Pay) * Days Unused divided by 3)Cost Difference = Cost After minus Cost beforeFrom the sample data, the numbers of absentee days decreased by 1043 days, and the cost decreased by over 13K from year over year. As shown below, the average cost of absenteeism before the plan is 1153 and the average cost after the plan is 1095. The mean cost is clearly lower after the new programs with a lower standard error. Since the T Statistic is more than twice the standard error after the programs were, it is safe to say that the programs have a significant effect on cost, the dependent variable.The stat tools report shown below has a P Value of less than .0001. A P value less than .01 percent is highly regarded as convincing evidence that the alternative hypothesis is true. Therefore, the null hypothesis should be rejected.Section 3 - Conclusions and RecommendationsAs shown above, we believe that the new two-point plan that was implemented by Circuit Systems had a positive effect on curbing the absenteeism problem. Offering the hourly employees the opportunity to cash in their unused sick days for money, and having the option of a voluntary exercise program definitely lowered the cost of measured variables year over year. We recommend that Circuit Systems continue with the two point plan from now on in order to continue combating the abuse of paid sick leave.


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