SAS INSTITUTEA DIFFERENT APPROACH TO INCENTIVES & PEOPLE

October 10, 2015

AGENDA• Who is SAS?

• Company Background and Leadership

• Organizational Structure & Design

• Job Design and Selection

• Employment Deal

• Threats and Sustainability

• Recommendations

WHO IS SAS?

• Mission Statement:

“SAS delivers proven solutions that drive innovation and improve performance.”

• Values

• Approachable

• Customer-Driven

Source: SAS Institute Website

• Swift & Agile

• Innovative

• Trustworthy

BACKGROUND• SAS was developed in 1970 at North

Carolina University

• Company was founded in 1976 by Jim Goodnight and John Sall

• 13,811 employees located in 140 countries

• Reported $3.09 billion in revenue in 2014

Source: SAS Institute Website

LEADERSHIP

Goodnight and some of his North Carolina State University

colleagues created the software to analyze agricultural-research data

Jim GoodnightChief Executive Officer, SAS

From the date of establishment in 1976, Sall designed, developed and documented many of the earliest

analytical procedures while also leading research and development efforts

John SallCo-founder and Executive Vice President

Source: SAS Institute Website

BUSINESS ENVIRONMENT

• No single competitor

• Competition in some segments of the business

• Multiple goals

• 25 product system

ORGANIZATION DESIGN

• No organization chart

• Hybrid

• Flat

• Informal

LEADERSHIP STRUCTURE

JOB DESIGN

John Boling, a SAS employee, said this about the employees, “We assume that you have talent, creativity, and initiative. You have to be

able to take that and run with it” (HBR).

• Freedom to make choices - decentralized

• Little supervision - working managers

• Flexible to meet customer needs

COMPANY FIT: PROS• Business environment is uncertain

• Software needs are always changing

• Moving to the Internet/cloud-based

• 1,000 employees doing development work

• Large organization

• 13,000+ employees

• 140 offices around the world

• 31,000 customer sites

COMPANY FIT: CONS

• Limited interaction across departments

• Less diverse ideas

• Slower pace of development

• Inefficiencies from duplicate efforts

TALENT SELECTION• A competitive labor market

• No stock options

• Lowest turnover rate in the industry

• 28% of jobs filled by internal promotions

• 23% jobs filled by referrals

EMPLOYMENT AT SAS

• 4% turnover rate

• Fortune’s 100 Best Companies to Work For

• How does SAS keep employees coming back?

Source: Case

EMPLOYEE “NEEDS”

Source: Book

EMPLOYMENT “DEAL”• Work Environment

• Company Culture

• Competitive Compensation

• Work/Life Balance

• BenefitsSource: SAS Institute Website

EMPLOYEE “NEEDS” VS “DEAL”

• Physiological - Salary, physical work environment

• Safety - Low turnover, medical and wellness benefits

• Belongingness - Co-workers, managers, customers

• Esteem - Hired, freedom, private office

• Self-Actualization - Work/life balance, training, growth

STRENGTHS & LIMITATIONS

• Family Friendly

• Competitive Salary

• Max employee profit sharing retirement

• No Stock Options

• Nepotism

• Flat/informal Organization

Strengths Limitations

OPEN SYSTEMS ANALYSIS

Labor Markets: growing need for computer-

literate workers

Customers: Customer needs

Sociocultural/Economical: general environment

Technological: drive competition

Task

General

KEYS TO SUCCESS

• Customer driven development process

• Attraction and retention of talent

• Inventory of skills and experiences

THE FUTURE: THREATS• Heavy investment in creative capital may not pay off

• Limited talent in the industry

• Lack of diversity impedes creativity

• Maintaining competitive work environment

• Individual offices hampers creativity

THE FUTURE: SUSTAINABILITY

• Competitive benefits/work life balance

• Focused on intrinsic motivation

• Egalitarian management style

• Substantial investment in employees

RECOMMENDATIONS• Restructure offices to create a more open environment

• Implement a more frequent feedback/communication process

• Provide a clearer promotion process to improve morale

• Expand recruiting efforts

• Open new development office to attract younger recruits

–Jim Goodnight, CEO

“Treat employees like they make a difference and they will.”

Thank You

REFERENCES• Daft, R. (2014). Management Eleventh Edition. South-Western,

Cengage Learning.

• Pfeffer, J. (1998). SAS Institute: A Different Approach To Incentives and People Management Practices in the Software Industry. Graduate School of Business Stanford University.

• SAS Institute Website (2015). Retrieved 9/27/2015 from: http://www.sas.com/en_us/careers/life-at-sas.html

• SAS Institute Website (2015). Retrieved 9/27/2015 from: https://www.sas.com/en_us/company-information.html#1966-1976