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.