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Case Study, SAS Institute Inc.
The management culture is a very important factor in the imprinting of a company: it shapes the relationship between working environment and employee satisfaction. I will answer a few questions regarding the SAS's particular strategy of running the business in which the employees are unbelievably loyal, thanks to the benefits and cares that they receive from the employer.
1. One critic calls SAS "a big brother approach to managing people." Is the company too paternalistic? Can a company be too paternalistic?
I do believe that SAS's approach to managing people is the result of an accurate analysis performed by the management staff. Therefore, when the management discusses improving employee retention rates, the initial topic is often higher salaries and bonuses. That is partly valid, because money is a key element; as SAS can attest, retention efforts can be very effective if they focus on more ways to spend the money than just increasing salary levels. With its strategy to boost employee retention, the company has created a culture and programs that encourage and drive employee loyalty. According to Pfeffer (2001), "Your profits come from loyal customers who do business with you for reasons other than just price. Customer loyalty is a consequence of loyalty from employees who produce great products and offer great service. In the short run, with enough venture money and enough product demand, any business model may appear feasible. In the long run, those companies that actually run their businesses efficiently and produce sustainable results will be the ones you keep reading about." ( 18).
I do not think that this is a "big brother approach" at all; at the end, it is just a way to achieve a better business result. The top management prefers to spend money on the employees rather than spending money on recruiters to find new employees, and this is why the organization is following this employee politics. The retention program expenses are more than justified by the overall cost savings, and so it is not paternalism, but smart business in place.
2. When, if ever, do family-friendly practices become too paternalistic?
Family-friendly practices are just a different approach to strengthen the link between the employees and the company; there is not any evidence of relationship between this kind of approach and a paternalistic behavior. This is especially true if the big part of the company value is the workforce's expertise.
To HR professionals, organization culture is the glue which connects a company’s vision with its value, its mission, strategy and philosophy with its operating model, systems and processes to deliver performance metrics and is fundamental for an organization to achieve its strategic goals and objectives and therefore given its impact on business performance, it must be developed, managed, led and reviewed. The organization’s culture or “way things are done” must be congruent with the organization strategic direction. Ensuring that key processes that drive the desired behaviors and influence decision-making are deeply understood and implemented in accordance with their intent and original design is of great importance for HR professionals. (Ulrich et al,
Attracting and retaining the best employees is a priority of most companies. Generally speaking, employees are the largest overhead expense for most employers. For these reasons, it is crucial to not only attract the best employees, but also to keep valuable employees. Being named one of the best employers is a valuable honor, and an honor that SAS has earned multiple times over multiple years on different lists (cite sasranks). The ability of SAS to attract and retain employees is undoubtedly linked to their consistent success and profit, even in difficult years (cite rowley). A critical look at SAS and their employment philosophies reveals how SAS leverages motivational theories
Culture in the workplace can be the driving force for a business and can make or break a company when it comes down to it. Culture can be the reason one company does better than another or even survives for that matter. It is also important to understand the culture of a business to be able to thrive in the workplace environment. Think about what type of values, attitude, beliefs, and expectations you want to live by before you get a job somewhere at a business (“It’s All About Culture”2017). Is this the atmosphere you want to practically spend much of your life in? When we think about culture we think about different places of the world. Organizational culture is
Keeping a high turnover rate, companies will continue to lose money until they decide to deal with the issue. Through some adjustments and implementations of the programs to lower turnover rates, the company can see a significant change in their costs and what they might actually save.
After reading about SAS Institutes I was very impressed by this company and its vision. If we analyze how this company manages the “Factors that have the strongest influence over work behaviors” (Carpenter, Bauer & Erdogan, 2012), we will notice that they really keep their promise of “value people above all else” (Crowley, 2013). Starting from the factors that influence the job performance we can say that the company tries to maximize the performance of their employee reducing the amount of stress in the workplace, promoting the interpersonal relations with open offices, making the career-path very clear keeping a good level of organizational justice. Analyzing the second factor, organizational citizenship which refers to “voluntarily behaviors
The polices implemented by the Lincoln Electric Company have been so effective that the rate of turnover is restricted to retirements and new employees leaving the company. Long term employees of the company usually find no reason to leave. The organization doesn’t have a formal organization chart like those of many companies today. This leaves room for flexibility and allows employees to have their problems resolved by the most capable person available. This eliminates the chain of command restrictions that are faced in companies today where you have to report the issue to your direct manager before it can reach someone who can actually fix the problem. This “open door policy is practiced throughout the company”. – Arthur Sharplin, 1989.
Chapter sixteen in our textbook highlights the benefits of organizational culture and what it can do for any company with a strong culture perspective. In fact chapter sixteen-three(a) speaks widely on how a strong culture perspective shapes any organization up well enough to perform better than any of its competitors who do not balance any organizational culture. If not mistaken after viewing SAS institute case they are well on track with facilitating a high performance organization culture. First, SAS institute motivate all employees to become goal alignment in their field of work. This is where they all share the common goal to get their work done. In one of the excerpts taken away from this case, an employee- friendly benefits summary expresses the statement “If you treat employees as if they make a difference to the company, they will make a difference to the company.” “SAS Institute’s founders set out to create the kind of workplace where employees would enjoy spending time. And even though the workforce continues to grow year after year, it’s still the kind of place where people enjoy working.” Clearly highlighted from this statement that SAS Institute is mainly ran off of a fit perspective. Which argues that a culture is only as good as it fits the industry. Allowing a good blueprint or set up will
Most will agree that culture is an important (if not critical) aspect of an organization's success. Culture is an attractor of talent (employees), as well as customers. This article will explore management's role in building and affecting organizational culture. Culture at Southwest Airlines Herb Kelleher, the co-founder and retired CEO of Southwest Airlines was the chief architect of the organization's culture.
Culture can be defined as “A pattern of basic assumptions invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valid, and therefore to be taught to the new members as the correct way to perceive, think and feel in relation to those problems”. Schein (1988). Organizational culture can be defined as a system of shared beliefs and values that develops within an organization and guides the behavior of its members. It includes routine behaviors, norms, dominant values, and feelings or climates. The purpose and function of this culture is to help foster internal integration, bring staff members from all levels of the organization closer together, and enhance their performance.
“OUR DREAMS HAVE TO BE BIGGER, OUR AMBITIONS HIGHER.OUR COMMITMENT DEEPER. AND OUR EFFORTS GREATER. THIS IS MY DREAM FOR RELIANCE AND FOR INDIA.”- DHIRAJLAL AMBANI
“Employee turnover is a critical cost driver for American business. The cost of recruiting and filling vacancies, lost productivity from vacant jobs, and the costs of training new employees increase operating costs, reduce output, and cut into profits.” (Orville 5-7)
The natural thing is to continue the family tradition but not neglected, take care of this issue is vital to not only ensure business growth and continuity but the welfare the whole family.
Phillips, J.J., Connel ,A.O and Connel ,A.O (2003) : “Managing Employee Retention: Improving Human Performance” Edition:1
...ir cultures to family friendly ones by providing their employees with flexibility. However, these companies driven to adopt the family friendly culture just because it makes a great business sense and leads to increase in productivity. Organizations need to start to recognize the value in supporting their employees and helping them to balance work and family life. Thru doing so, these companies will be able to attain the competitive edge just like some very successful organizations that are well known for such practices.
It brought organisational culture to the performance of a company, which has become a critical topic in management department. In addition to organisational culture, organisations need to be aware and prepared for changes in the expanding workforce as business grows. Companies are faced with maximizing benefits as well as profits while minimizing negative factors that come from those changes. There is no one answer to the issue, but some of the guidelines are clear. Awareness of organisational culture, teamwork, individual performance, external environment adaptation, leadership, and measurement of organisational culture are key factors that lead a company to perform better.