Slide: 15 Readings: SAS cases - 2 Questions: Based on both cases, answer the following questions: What are examples of positive reinforcement at SAS? Given its culture, what type of punishment or negative reinforcement (pick one) would be effective at SAS?

Case 1:

How can managers ensure that employees are, and stay, highly motivated? The SAS Institute is in the enviable position of being listed on Fortune magazine's annual ranking of the 100 Best Companies to Work For for 17 years in a row; in 2014 the SAS Institute was ranked second.1 The SAS Institute is the world's largest privately owned software company, with over 13,700 employees worldwide and over $3 billion in revenues.2 In fact, revenues have increased at SAS every year since the company was founded in 1976. SAS software is used at over 70,000 locations in more than 130 countries; over 90 of the top 100 companies on the Fortune Global 500 list of largest companies use SAS software. Headquartered in Cary, North Carolina, SAS also has offices in Europe, the Middle East, Africa, Asia Pacific, Latin America, and Canada.3 Every indicator suggests that SAS employees are highly motivated and perform well while also working 35-hour weeks. Since its founding, the SAS Institute has strived to ensure that employees enjoy and are motivated by the work they perform. Managers approach motivation from the perspective that all employees should be interested and involved in the work that they are performing and have the sense that they are making meaningful contributions to SAS and SAS' customers. While some software companies that seek to develop new products buy companies that are already making these products, SAS develops its new products internally, and employees can perform interesting work at the forefront of technology.4 Creativity is encouraged at SAS, and employees experience the excitement of developing a new product and seeing it succeed.5 Overall, employees exert high levels of effort and persist in the face of setbacks to develop and provide the outstanding software solutions for businesses that SAS is renowned for. Over 20 percent of annual revenues are committed to research and development at SAS, consistent with its long-term focus.6 This long-term focus also helps ensure that SAS can weather economic downturns. For example, as a result of the recession that started in 2007, many technology companies laid off employees in 2009, which was not the case at SAS. As SAS cofounder and CEO James Goodnight puts it, I've got a two-year pipeline of projects in R&D Why would I lay anyone off?7 Recognizing that sometimes employees might lose interest in the type of work they are doing or just need a change of pace, SAS allows employees to change jobs to prevent becoming bored with their work. SAS gives employees any additional training they might need when they change jobs. By encouraging these kinds of lateral moves, managers help to ensure that high levels of motivation at SAS are sustained over time.8 While annual turnover rates in the software industry are around 15 percent, SAS's turnover rate in 2013 was 3.6 percent and average tenure at SAS is around 10 years.9 Managers at SAS fairly and equitably reward employees for a job well done. Moreover, Goodnight and other managers recognize that SAS's employees are its biggest asset and go to great lengths to satisfy their needs and create a work environment that will be conducive to creativity, high motivation, and well-being for employees and their families. At headquarters in North Carolina, employees have access to two child care centers that SAS subsidizes, a summer camp, three subsidized cafeterias, a 66,000-square-foot fitness and recreation center including an Olympic-size pool, and all kinds of services ranging from dry cleaning and car detailing to massages and a book exchange. Google (one of SAS's customers) actually used SAS as a prototype when Google was developing its own suite of employee benefits and perks.10 An on-campus health care center with an annual budget of $4.5 million and staff of 53 provides SAS employees and their families with free basic care clinic services.11 The center is open 10 hours most days and has three physicians, 11 nurse practitioners, physical therapists, nurses, dietitians, lab technicians, and a psychologist on hand to attend to health needs and problems. In 2009 about 90 percent of headquarters' employees and their families had 40,000 appointments at the center. SAS estimates that the center saves the company about $5 million per year because employees are not losing valuable time traveling to doctors' offices and waiting a long time to see them. Moreover, employees are more likely to get care when they need it, and SAS can provide the care they need at lower costs.12 Wellness and work/life centers offer a variety of programs to help employees achieve a sense of balance in their lives and days. Programs range from Pilates, Zumba, and partner yoga to weight management, salsa aerobics, cooking classes, harmonic sound healing, and movies that employees can watch while floating in the pool. Employees with children are encouraged to have lunch with their kids in the subsidized cafeterias complete with high chairs, and of course they can bring their kids to the health center when they get sick.13 Employees have their own offices, and the work environment is rich in pleasant vistas, whether they be artwork on the walls or views of the rolling hills of Cary, North Carolina, at company headquarters. SAS keeps two artists on its staff in the belief that exposure to beautiful artwork and surroundings can spur creativity.14 Employees and their families are encouraged to use the 200 acres that surround company headquarters for family walks and picnics.15 SAS trusts its employees to do what is right for the company. Thus many employees are able to determine their own work schedules and there are unlimited sick days.16 Due to having so many benefits and facilities, employees do not have to interrupt their workdays or leave the campus for a doctor's appointment or to run an errand. And SAS realizes that to maintain high levels of motivation over time, employees need to have a balanced lifehence the 35-hour workweek. Of course, because SAS is a truly global company, sometimes employees on global teams with a tight new product development schedule need to work long hours and some employees check work email at home. Nonetheless, employees at SAS are not expected to work excessive hours as is common at some other companies.17 Since the company was founded, CEO James Goodnight has been committed to motivating employees to develop creative and high-quality products that meet customers' needs. Today hundreds of companies use SAS products for a wide variety of purposes including risk management, monitoring and measuring performance, managing relations with suppliers and customers, and detecting fraud.18 SAS also provides educational software for schools and teachers through SAS in School.19 Clearly, motivating employees and helping to satisfy their needs is a winwin situation for SAS. And by trusting employees and treating them well, SAS motivates employees to do what is best for SAS. As Bev Brown, a SAS employee in external communications put it, Some may think that because SAS is family-friendly and has great benefits that we don't work hard But people do work hard here, because they're motivated to take care of a company that takes care of them.2

Case 2:

Value People Above All Else In the fall of 2008, at the onset of the Great Recession, SAS customers suddenly stopped buying its products. Fears of a long downturn influenced businesses to dramatically cut spending, and the entire analytics so!ware industry was directly affected. Several of SASs competitors soon announced massive layoffs, and SASs own workforce immediately grew worried that job cuts would be forthcoming in order to prop up the bottom line. But in early January 2009, Goodnight held a global webcast and announced that none of its 13,000 worldwide employees would lose their job. He simply asked them all to be vigilant with spending and to help the firm endure the storm. "By making it very clear that no one was going to be laid off," Goodnight told me, "suddenly we cut out huge amounts of chatter, concern, and worry and people got back to work." What likely will be astonishing to many is that SAS had record profits in 2009 even though Goodnight was perfectly willing to let his then-33-year track record of increased profit come to an end. At 70 years old, Goodnight holds the conviction that "what makes his organization work are the How SAS Became The World's Best Place To Work | Fast Company | Business + Innovation 6/14/16, 8:08 AM http://www.fastcompany.com/3004953/how-sas-became-worlds-best-place-work Page 6 of 17 new ideas that come out of his employees brains." He therefore holds his employees in the highest esteem. So while he fully anticipated that the recession would constrain the firms short-term revenues, he instinctively knew that his team would produce breakthrough products while his competitors were cutting costs. And even four years later, his commitment to his people has paid off handsomely. Said Goodnight, "new stuff were rolling out this year is going to take the market by storm." To Give Is To Get Its widely known that SASs munificence toward its workers is virtually incomparable in business, with the exception of Googlean early emulator of SASs practices and now the best place to work for 2013. SAS employees, and their families, have free access to a massive gymnasium featuring tennis and basketball courts, a weight room, and a heated pool. An on-site health care clinic, staffed by physicians, nutritionists, physical therapists, and psychologists also is entirely free.