Circuit Systems, Inc., located in northern California, is a company that produces integrated circuit boards for the microcomputer industry. In addition to salaried management and office staff personnel, Circuit Systems currently employs approximately 250 hourly production workers involved in the actual assembly of the circuit boards. These hourly employees earn an average of $11.00 per hour.
Over the next year, during which time the sick leave conversion and exercise program are in place, Thomas Nelson has maintained data on employee absences, use of the sick leave conversion privilege, participation in the exercise program, and other pertinent information. He has also gone back to collect data from the year prior to starting the new program in order to better evaluate the new program. His complete data are in the file CIRCUIT. A description of this data set is given in the Data Description section.
Using this data set and other information given in the case, help Thomas Nelson evaluate the new program to determine whether it is effective in reducing the average cost of absenteeism by hourly employees, thereby increasing worker productivity. In particular, you need to compare this year’s data to last year’s data to determine whether there has been a reduction in the average cost of absenteeism per hourly production worker by going to the new program. The case questions will assist you in your analysis of the data. Use important details from your analysis to support your recommendation.
1. Using the method presented in the chapter for comparing the means of paired samples, compare the two years in terms of days missed before and after the new program was implemented. On this basis alone, does it appear that the program has been effective in reducing the number of days missed?
2. Keeping in mind that the goal of the program is to reduce the cost of absenteeism, you will need to create two new variables for each employee: (1) the cost of paid absences last year, and (2) the cost associated with absences this year. A few hints on creating these variables for each person: For (1), assume an 8-hour workday and consider both the person’s daily pay and his or her number of absence days. For (2), assume an 8-hour workday and keep in mind that the total cost associated with absenteeism for each person must include the cost of paid absences, the extra pay for unused sick leave (if any), and health club membership (if applicable). You might call these new variables Cost_Before and Cost_After. Use these new variables in repeating the procedure you followed in Question 1, then discuss the results and make a recommendation to Mr. Nelson regarding the effectiveness and possible continuation of the new program.
3. Using the new variables you created in Question 2, use this year’s costs and an appropriate statistical test in evaluating the effectiveness of the exercise program. Discuss the results and make a recommendation to Mr. Nelson regarding the effectiveness and possible continuation of the company-paid health club memberships.