SAS Institute Case Study Answers

The SAS institute was founded in 1976 by Dr. James Goodnight and Dr. John Sall, both professors at North Carolina State University, SAS Institute, Inc. provides business intelligence (BI) software and services at more than 40,000 customer sites worldwide, including 90 percent of the Fortune 500 companies. SAS, which stands for â€Å"statistical analysis software,† is headquartered in Cary, North Carolina. It is the world’s largest privately held software company, having over 100 offices worldwide with approximately 10,000 employees. With an unbroken record of growth and profitability, SAS had revenue of $1. 18 billion in 2002 and invested about 25 percent of revenues into research and development. SAS has been widely recognized for its work-life programs and emphasis on employee satisfaction. The company’s various honors include being recognized by Working Mothers magazine as one of â€Å"100 Best Companies for Working Mothers† and by Fortune magazine as one of the â€Å"100 Best Companies to Work for in America. † The Working Mothers recognition has been received 13 times and the Fortune recognition has occurred for six consecutive years. . Critically analyse the basic management philosophy that governs employee relation management at SAS. The management culture is a very important factor in the imprinting of a company: it shapes the relationship between working environment and employee satisfaction. SAS’s particular strategy of running the business in which the employees are unbelievably loyal, as a software developer himself, SAS CEO Jim Goodnight knows well that designing software is a creative process, and that SAS’ continued success is built on â€Å"products of the mind. The creativity and puzzle-solving behind great software and the caring professionalism behind great customer service are the most essential resources in an intellectual property enterprise. SAS management believes that workplace culture, company values and employment practices can transform the work experience in ways that are not only good relations but good business. Focusing on people and relationships making employees a top priority leads to more productive, satisfied and dedicated employees. They take care of the company that takes care of them. To achieve that ideal, employees must be stimulated, engaged, appreciated and supported. They need to be trusted and valued, to feel that they make a difference. To support the creative process and balance work and family, they must be offered a flexible work environment that allows them to be the most productive. And they should be freed from many of the distractions and difficulties of day-to-day life, so they can focus on doing their best work. They want good results so they pay their employees competitively, targeted at the average for the software industry. SAS does not provide stock options like other companies in the industry. Instead of relying on high salaries and stock options to attract and retain workers like many software companies do, SAS takes a very different approach. SAS focuses on providing meaningful and challenging work, and it encourages teamwork. SAS also provides a host of benefits that appeal to the employees and help keep them satisfied. As one employee who took a 10 percent pay cut to join SAS said: â€Å"It’s better to be happy than to have a little more money. Employees are given the freedom, flexibility, responsibility, and resources to do their jobs, and they are also held accountable for results. Managers know what employees are doing and they work alongside them, writing computer code. The company employs very few external contractors and very few part-time staff, so there is a strong sense of teamwork throughout the organization. SAS employees are clearly involved in their work. One employee, Kathy Passarella, notes that: â€Å"When you walk down the halls here, it’s rare that you hear people talking about anything but work. Clearly, human resource management at SAS is a two-way street. SAS has an HR strategy and related policies and practices that attract, motivate, and retain highly capable workers who make significant contributions to the ongoing success of the company. Goodnight and the other SAS leaders expect nothing less than superior performance from the employees, and they continue to get it. The employees are loyal a nd committed to the company, and they are productive; so loyal, committed, and productive, in fact, that only a small percentage of the employees ever leave once they have been hired at SAS. They have the employees who don’t want to leave the work even if they get little more money somewhere else as they want the peace they get in SAS. (Drucker 1974, Chaffee 1985) 3. Critically evaluate how SAS’s have ethically played its role in providing for the needs of its employees and how its human resource strategy policies, and practices affect the company’s ability to attract, develop, and maintain a quality workforce. This Corporate Social Responsibility Report reflects the core values and achievements of how SAS does business as an employer, a software provider and a corporate citizen. The guiding principles that launched the company in 1976 are still the foundation of the enterprise. The company strives to be approachable, so customers recognize SAS as a reliable partner and not just a vendor. It is about being customer-driven, engaging with customers to find out what they want and helping to solve their problems. It requires swiftness and agility, to adapt to changing technology and global conditions. It relies on the kind of innovation that grows in a workplace culture where employees feel valued, vested and inspired to excellence. And it demands that SAS be trustworthy, an ethical business partner that customers can count on for their critical decision-making processes. Overarching these guiding principles is the commitment to sustainability to drive operational efficiency, spawn innovation, and satisfy the expectations of customers, employees and society. This commitment and understanding are driven from the top. Through the SAS Executive Sustainability Council, top executives ensure that sustainability goals and priorities permeate every aspect of the company’s operations. Externally, SAS senior management is represented on the boards of leading conservation organizations, such as The Nature Conservancy, and provides influence on the global stage through such organizations as the World Economic Forum, World Resources Institute and the Environmental Defense Fund. Responding to the growing need for companies to measure their performance, SAS introduced SAS for Sustainability Management software in 2008 to enable organizations of any size or industry to measure, manage and report on sustainability indicators. This groundbreaking solution led to Jim Goodnight, SAS CEO, being named among the â€Å"100 Most Influential People in Business Ethics† in 2008. This 2009 Corporate Social Responsibility Report, the third published by the company, highlights SAS’ commitment to, and leadership on, sustainability across all business units – in terms of governance and management, employees, community engagement and the environment. Employees are given the freedom, flexibility, responsibility, and resources to do their jobs, and they are also held accountable for results. Managers know what employees are doing and they work alongside them, writing computer code. The company employs very few external contractors and very few part-time staff, so there is a strong sense of teamwork throughout the organization. SAS employees are clearly involved in their work. One employee, Kathy Passarella, notes that: When you walk down the halls here, it’s rare that you hear people talking about anything but work. (Cooper 1991) Included among the various employee benefits that SAS provides are: an employee fitness and recreational center, an employee laundry service, a heavily subsidized employee cafeteria, live piano music in the employee cafeteria, subsidized on-site childcare, and a free health center. All of these benefits are geared toward employees having a better work experience and/or a better balance between their work lives and their personal lives. The company’s commitment to work-life balance is evident in SAS’s 35-hour workweek, which clearly recognizes the importance of employee’s personal lives. That strategy is intended â€Å"to make it impossible for people not to do their work. † The owners of SAS want employees to be satisfied because they believe satisfied employees will be excellent performers and will provide exceptional service to the company’s customers. If you treat employees as if they make a difference to the company, they will make a difference to the company. Satisfied employees create satisfied customers. † This viewpoint might be described as a form of enlightened realism and enlightened self-interest on the part of the company. Satisfied employees make for satisfied customers, and satisfied customers make for an ongoing stream of revenue and profits for SAS. . In commenting on the company’s performance expectations for employees, Goodnight says: â€Å"I like to be around happy people, but if they don’t get that next release out, they’re not going to be very happy. Pondering the likelihood that SAS employees would take advantage of the company’s relaxed atmosphere, John Sall, co-owner of SAS, observes: â€Å"I can’t imagine that playing Ping-Pong would be more interesting than work. † David Russo adds some additional perspective. He says: â€Å"If you’re out sick for six months, you’ll get cards and flowers, and people will come to cook dinner for you. If you’re out sick for six Mondays in a row, you’ll get fired. We expect adult behavior. † David Russo, SAS’s head of human resources says: â€Å"To some people, this looks l ike the Good Ship Lollipop, floating down the stream. It’s not. It’s part of a soundly designed strategy. † That strategy is intended â€Å"to make it impossible for people not to do their work. † (Buzzell 1987) 4. Critically evaluate SAS employees’ moral duty to the organization towards the achievement of its goal. As the company is doing its best to keep the employees happy it also expects the employees to give their best to the company. The owners of SAS want employees to be satisfied because they believe satisfied employees will be excellent performers and will provide exceptional service to the company’s customers. So by treating the employees well they know that they will get ga good return as the employees will treat the customers well. They follow the strategy that satisfied employees create satisfied customers. † This viewpoint might be described as a form of enlightened realism and enlightened self-interest on the part of the company. Satisfied employees make for satisfied customers, and satisfied customers make for an ongoing stream of revenue and profits for SAS. SAS’s leaders recognize both the benefits and costs associated with keeping employees satisfied. One of the most significant benefits for SAS is a very low annual turnover rate. The company’s turnover rate is less than four percent, as compared to approximately 25 percent for the industry as a whole. This low turnover saves the company about $70 million annually in employee replacement costs. On the cost side, of course, is the company’s monetary outlay for the various programs. David Russo, the human resources director, argues that the employee replacement cost savings more than pays for the company’s generous benefits. Perhaps of more concern on the â€Å"cost side† is the potential for employees failing to perform. In commenting on the company’s performance expectations for employees, Goodnight says: â€Å"I like to be around happy people, but if they don’t get that next release out, they’re not going to be very happy. † Pondering the likelihood that SAS employees would take advantage of the company’s relaxed atmosphere, John Sall, co-owner of SAS, observes: â€Å"I can’t imagine that playing Ping-Pong would be more interesting than work. † David Russo adds some additional perspective. He says: â€Å"If you’re out sick for six months, you’ll get cards and flowers, and people will come to cook dinner for you. If you’re out sick for six Mondays in a row, you’ll get fired. We expect adult behavior. † The system of SAS is a two-way street. SAS has an HR strategy and related policies and practices that attract, motivate, and retain highly capable workers who make significant contributions to the ongoing success of the company. Goodnight and the other SAS leaders expect nothing less than superior performance from the employees, and they continue to get it. The employees are loyal and committed to the company, and they are productive; so loyal, committed, and productive, in fact, that they are giving the best to the company. Borgerson 2008). 5. Conclusion: SAS has proved to give the best quality of working atmosphere to its employees. They motivate their employees and help them to give their best to the company. They don’t interfere in the family life of the employees instead they tray to make their lives better in every way by creating things around them that make th em feel comfortable. Clearly, human resource management at SAS is a two-way street. SAS has an HR strategy and related policies and practices that attract, motivate, and retain highly capable workers who make significant contributions to the ongoing success of the company. Goodnight and the other SAS leaders expect nothing less than superior performance from the employees, and they continue to get it. The employees are loyal and committed to the company, and they are productive; so loyal, committed, and productive, in fact, that only a small percentage of the employees ever leave once they have been hired at SAS, as they feel so comfortable that even if they are offered a little more money in some other company they don’t prefer more money.