Question

Have you heard of SAS Institute, Inc.?109 Maybe, just maybe, you’ve used a school-based version of their analytical software in a research class. SAS (originally called Statistical Analysis System) is based in Cary, North Carolina, and its analytics and business intelligence software is used by corporations and other customers to analyze operations and forecast trends. For 19 years, SAS has been named to Fortune’s Best Companies to Work For list, most often in the top 10. One thing that distinguishes SAS is its highly employee-friendly culture.

The good life for employees began over 26 years ago with free M&Ms every Wednesday. Now the sweets have become even sweeter. Today, SAS’s almost 13,000 employees enjoy perks such as free onsite health care, subsidized Montessori child care, unlimited sick time, onsite massage, summer camp for employees’ children, an enormous fitness and recreation center, car cleaning, soda fountains and snacks in every break room, and others. The SAS dress code is … well, there is no dress code. “Laidback is the unofficial posture here and convenience the motto.” To be sure, these benefits help make SAS a desirable place to work. But the company’s commitment to employees goes beyond nice perks. Even in the economic downturn, SAS refused to lay off employees and, in fact, even extended its benefits. As SAS’s vice president of human resources says, “SAS’s continued success proves our core belief: Happy, healthy employees are more productive.”

The masses of programmers who churn out the company’s products are paid a competitive wage, but are not offered stock options. SAS is a privately held company, so there is no stock. Yet, the extraordinary perks help SAS keep turnover extraordinarily low: a rate of 3.6 percent versus the industry norm of more than 15 percent. On the survey instrument used to determine those Best Companies, one SAS employee wrote that in his or her opinion, employees continue to work at SAS because the company respects them and cares for them. The company’s CEO and cofounder Jim Goodnight would say there’s nothing wrong with treating your people well. And it’s worked for his company. In 2013, SAS sold over $3 billion of its sophisticated software, and it has never had a year of revenue loss.

Discussion Questions

• 15-13. What is your impression of this employee-friendly culture? Would this work in other organizations? Why or why not? What would it take to make it work?
  

• 15-14. How might an understanding of organizational behavior help CEO Jim Goodnight lead his company? Be specific. How about first-line company supervisors? Again, be specific.
  

• 15-15. What do you think has contributed to SAS’s low turnover? Why is low turnover good for a company?
  

15-16. Look back at the statement made by the SAS employee on the Best Companies survey. What does that tell you about the importance of understanding individual behavior?

Answer 1

15-13. The employee-friendly culture creates the impression that it results in positive outcomes for the employees and the organization. The company understands the importance of motivating its work force, employee retention and employee loyalty. Employee-friendly culture improves productivity and work commitment of employees.

This will work in other organizations depending on the type of organization, type of work responsibility, the competitive environment and employee expectations. Companies which work in highly competitive environment with low skilled workforce may not benefit by employee friendly culture, instead they need to focus on cost and efficiency to remain competitive and cannot provide unlimited perks and retention of work force in recession.

To make it work , it is important to understand the business type and organization, the composition of workforce and their expectations for mutually beneficial strategies and goals.

15-14. An understanding of organizational behaviour will help CEO Jim Goodnight lead this company as the employees at different levels have different concerns and expectations to motivate and perform. Organizational behaviour is the understanding of the factors influencing the employee behaviour in an organization and the impact of work processes and structure, learning and development, communication and motivation on the employees.

The CEO can accordingly formulate policies for the employees and design the work structure and processes for better long term results for employees and organization.

15-15. SAS's low turnover is the result of the employee friendly policies and benefits. The company has created a culture for happy and healthy employees with flexible policies and workplace with lot of facilities. This low turnover is good for the company as it improves productivity and performance. The employee satisfaction leads to a better work environment and less efforts to hire and resources required for training and recruitment.

15-16. The importance of understanding individual behaviour leads to forming policies and benefits for employee satisfaction and well being. Employees understand their value and are more committed to the workplace. They are motivated for performing better and creating a positive image for the teams and organization they are working.