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To use the Time and Attendance workflow, you need to enable it for each of the schedule types you manage. 

Under your Site Setup (or Department Setup) menu, choose the option Schedule Types:

Find your schedule type in the listing and click the pencil icon to edit the details of the schedule type:

In the details dialogue the Time and Attendance option is second from the bottom:

Once the workflow is enabled you will have a new menu option in your Employee Shift panel in the middle of your dashboard:

... and your payroll period reports and timesheet listing will now have colour coding:

Click here for and article that describes the workflow in detail.