We at MCN found this Business Week article very interesting: MCN has some related experience in the matter. We have no need to hire detectives to check out employees claiming to be sick. Many years ago we eliminated sick days due to a nagging awareness that it creates a hazard for employees and the business alike.

When starting MCN 25 years ago, we allotted the typical 10 days of sick leave annually. We found that these days were used at highly variable levels, with employees taking anywhere from zero to the full bank each year. Anecdotally we observed that the higher usage tended to be under occasional suspect conditions, while the most productive employees tended to use very few days.

Management found itself distracted by an on-going level of concern bordering on cynicism when certain individuals were absent. We began to think about the matter and analyzed it. Simple math demonstrates that the individual who is out for 2 weeks is making more than 4% more for their time than an individual who is not absent (2 weeks out of the approximate 48 weeks left after holiday and vacation). We also analyzed our usage over a prior 2-year period and found that the average sick day usage was 5.5 days.

We considered motivational factors and observed the moral hazard dilemma: when quality employees realize that this sick day entitlement is only usable if one decides that they are “sick,” then deciding to be sick is at times quite subjective and those who are self-employed (by contrast) typically are take few sick days annually.

After a number of internal discussions and employee communication, the decision was made to eliminate separate vacation and sick days and create “paid leave,” with a base of the prior vacation plus 5 days.

At the time all but one employee was quite happy with this change. The result over more than 15 years has been uneventful. Concerns that individuals would come to work sick to preserve what might be considered to be a bigger vacation pool was not realized. And management was no longer distracted with any concerns about leave abuse. our new program treats all staff equally and eliminates the need to justify or report on reasons for absence, though we do expect advanced notice for planned leave.

On balance, this new system has been a great improvement and we highly recommend it, and we know that many other companies have similar programs.