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WA2. SAS Institute Invests in Employees

Statement

Read the mini-case study in section 2.1. “Case in Point: SAS Institute Invests in Employees.” The study generally discusses the approach of a major software company to its employees. Then consider the “Factors That Have the Strongest Influence over Work Behaviors” from Figure 2.15.

  • Describe how each of the four factors is managed by SAS.
  • Do you agree or disagree with the firm’s approach and policies? Why or why not?

Answer

SAS Institute is a software company that specializes in analytics and artificial intelligence systems. It is one of the largest privately held corporations in the world and it is known for its streak of 40 years of consecutive growth (Sas.com, 2024). The company attributes its success to its employees and invests heavily in them as it has been ranked on Fortune magazine’s best places to work list every year since the list was first published. The company is also known for the perks that it provides for its employees on-site, as opposed to just pure salary and benefits (Carpenter et al., 2010).

Carpenter et al. (2010) describe the four work behaviors which include job performance, organizational citizenship, absenteeism, and turnover. The first two are considered positive behaviors and are desired by organizations, while the latter two are considered negative and the less of them the better. The purpose of these behaviors is to understand why people behave the way they do, and the text will explain each one of them separately giving examples of the factors that affect the behavior from the SAS Institute.

Job Performance.

Job Performance refers to the level to which an employee successfully fulfills the points included in the job description; that is, the number of tasks that are completed by the employee with high quality and in a reasonable time. The most important factors that affect job performance are cognitive ability, organizational justice and interpersonal relations, stress, positive work attitudes, and personality (Carpenter et al., 2010).

Cognitive ability refers to the person’s mental capacity and intelligence; and the company can not do anything about it, except to improve the hiring process to include tests that filter out incapable people. Organizational justice, however, is entirely dependent on the company’s policies and procedures. SAS understood that and developed a unique management system that put the employees first, and during the 2009 crisis, the company did not lay off a single employee as it would be unfair to lay some and keep others.

The “value people above all” policy worked, and the company managed to be profitable despite the crisis. The company’s performance and the increased revenue reflect the job performance of each single employee (Crowley, 2013).

Organizational Citizenship.

Organizational citizenship behaviors (OCB) are voluntary behaviors employees perform to help others and benefit the organization; that is, the extra mile that an employee goes to help a colleague for the overall benefit of the company. The most important factors that affect OCB are personality, organizational justice, positive work attitudes, and age (Carpenter et al., 2010).

Personality is a factor that is hard to change, and it depends on the employee, but a good environment will extract the best of our personalities. Positive work attitudes generate happier people who in turn seem to be more willing to help others. SAS has a unique work environment that is designed to make employees happy as they feel valued, important and appreciated. The company also wants people to stick around while they are aging; the feeling of security prompts people to help more.

The “to give is to get” policy worked; the company gives to its employees and gets back performance. The same value applies to the employees who give to their colleagues and get back the appreciation, the help, and the happiness (Crowley, 2013).

Absenteeism.

Absenteeism refers to Unscheduled absences from work; that is, the non-avoidable problems that are related to the employee’s health or other family matters and the avoidable problems where employees avoid work due to burnout, stress, or negative environment. The most important factors that affect absenteeism are work/life balance, stress, and work attitudes (Carpenter et al., 2010).

Work/life balance is harder to maintain when you have a family to take care of; SAS understood that and the provided on-site perks include family members and the employees themselves; the children’s daycare and on-site health care that covers family members greatly reduce the overhead of taking care of kids schooling and health. The positive attitudes and the stress-free environment also reduce the absenteeism rate as people are happier and more willing to come to work.

The “Trust above all things” that SAS implemented worked; the company required its full-time employees to work 35 hours a week, and employees could take as many days off as they wanted without any questions asked (Crowley, 2013).

Turnover.

Turnover refers to an employee’s leaving an organization. The most important factors that affect turnover are work attitudes (Carpenter et al., 2010). SAS values its employees and the company did not lay off a single employee even during hard times; this has led to turnover among its employees to be as low as 4% despite its being 22% in the industry.

Conclusion.

The SAS Institute’s unique management style and its values of putting people above all, absolute trust, and giving (as a way to get) worked for both the company and its employees. Employees are happier, more productive, and less likely to leave or avoid coming to work. The company is profitable, growing, and has a low turnover rate. Anyone interested in the effects of good management on company performance should study the SAS model very closely.

Word Count: 1001.

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