• Promoting a Healthier Workforce

    Health and Productivity Management

  • Health and Productivity  Management Center


    The American College of Occupational and Environmental Medicine (ACOEM) convened an Expert Panel in January 2002 under a grant from AstraZeneca for the purpose of identifying which currently available productivity instruments best measured work loss due to migraines. The Expert Panel identified the numerous components of productivity and identified the key elements of lost productivity measurement to be absenteeism, presenteeism and employee turnover or replacement costs. (Table 1)

    Absenteeism is generally defined as the number of days missed from the workplace (1). Individuals who are absent from the workplace cannot contribute. Absence can take many forms, and each has a somewhat different effect upon the bottom line. For example, an unexpected death in the middle of a critical negotiation can change the direction of an entire company, while a planned pregnancy leave may have a net positive effect during a slack work period. The human capital method (e.g. job specific human capital) and the friction method attempt to address these differences. Business attempts have been made to quantify these issues with metrics of lost opportunity costs, training costs, replacement costs, and firm-specific human capital, but no system yet devised fully accounts for them. Absenteeism metrics may include:

    • Workers' compensation
    • Short-term disability
    • Long-term disability
    • Sick leave
    • Family Medical Leave Act
    • Paid time off
    • Unpaid leave

    Presenteeism is the health-related productivity loss while at work (1). Presenteeism describes an employee who is present at work but limited in some aspect of job performance by health-related problem(s). This can range from slight deconditioning in a competitive athlete to mania in a stock trader. Presenteeism includes:

    • Time on Task - In the workplace, but not working (e.g. “sleeping it off”)
    • Quality of Work - Incidence and magnitude of mistakes (injury rates, product waste, product defects, etc.)
    • Creativity
    • Executive Functions (e.g. initiative)
    • Quantity of Work - Amount of work output
    • Capacity for Peak Performance
    • Interpersonal Factors
      • Social function (positive morale impact of optimally healthy)
      • Addictions (manipulative behaviors)
      • Personality disorders (criminal behaviors)
      • Mood disorders (irritable with customers)
    • Motivational - Observing a sick employee’s low output lowers the expectations of fully healthy workers for their own performance
    • Work Culture - The collective health or impairment level creates a culture that has a positive or negative feedback on the health of the group

    Poor health of a family member may result in increased absenteeism and presenteeism from the employee. The employee may need to take time off work for care giving. While at work, the employee’s thoughts may turn to an ill family member.

    The last element of productivity, turnover and concomitant replacement costs has an impact on the work culture and morale as well as overall salary expense. Employee turnover and replacement costs include the decreased productivity output associated with the cost of hiring and training new employees.(2) Turnover/replacement costs are lower in a healthy workforce and in a workforce that has improved corporate loyalty based upon the company’s commitment to health. A healthy work culture and good morale aid recruitment.

    1. Burton W, Conti D. The real measure of productivity. Business & Health. 1999; 34-36.
    2. Koopmanschap MA, Rutten FF, van Ineveld BM, van Roijen L. The friction cost method for measuring indirect costs of disease. J Health Econ. 1995; 14:171-89.

    Table 1: Elements of Health-Related Productivity Measurement


    • Workers’ compensation
    • Short-term disability
    • Long-term disability
    • Sick leave
    • Family medical leave
    • Personal time off
    • Unpaid leave
    • Time not on task
    • Quality of work
      • Incidence and magnitude of mistakes
      • Capacity for peak performance
      • Injury rates
      • Caregiver costs
    • Quantity of work
      • Work capacity or output
    • Personal factors
      • Social
      • Mental
      • Physical
      • Emotional
      • Functional status
    Employee turnover and replacement costs