Presenteeism as a moral hazard problem: Implications for the human resource management

Abstract

Abstract Information asymmetry about the employee's state of health means that workers may decide to work (or not) when they are sick, which turns presenteeism into a principal-agent relationship. From this new perspective, presenteeism can be explained by some distinct and original factors such as implicit incentives related to motivation and a sense of autonomy (empowerment, job usefulness, and recognition) and explicit incentives given by wages and other non-economic benefits (training and career prospects). In a sample of European workers using multilevel (by country) Tobit models, we find that short-term incentives and workers' empowerment increase presenteeism, while long-term incentives reduce it. As expected, supervision is ineffective in controlling presenteeism, while relationships based on trust have a positive impact. Finally, we propose several practices related to incentives, training, monitoring, occupational health and safety and job design specifically intended to manage presenteeism and its consequences in six areas of the human resources function.