Posted by: Brandon W. Jones | March 1, 2010


SAS Institute is a good example of how to run an organization effectively and smoothly. They were quite different from their competitors in several ways. They were very different in the way that they did their outsourcing, recruiting, compensation, and benefits. They set up a system helped the employees to work effectively and efficiently. The system wasn’t too stringent on the employees. It gave them freedom to set their own schedules.

SAS did very little outsourcing which helped to provide more opportunities for new employees within the company. By avoiding outsourcing, they were able to retain more control over every aspect of the work that they did. Temporarily it is fine to avoid outsourcing, but in the long run it becomes very expensive to do all processes in house. They could also run into problems with entering markets that are unrelated to their core processes.

SAS also have a very distinct way of doing their recruiting. Because they had a flat organizational structure, they were able to promote from within and have the existence of nepotism. Although it was fine as a small company to have this recruiting structure, as a large company this could create major problems. By allowing nepotism within the organization, they are subject to suits based on unfair hiring practices. They are opening themselves up for major problems down the line.

Their compensation structure was good because it promoted strong efforts on behalf of the employees. The bonus structure that was in place was good because it gave employees something to shoot for, but it was very bad because it didn’t have any specific set of metrics. All the metrics that were explained in the case study were subject to the opinion of the supervisor or the manager.

The structure for providing benefits was fair in some regards because it was a “pay as you use” system. Because the system was a pay as you go system, hard working and successful employees with many years in the company could be severely hurt if they have health problems later in their careers because their premiums will be much higher. At the same time, the system promotes healthy living for the employees which reduces the cost of the overall health system.

Although there are many possible areas of improvement within the system that SAS was using, their current system is very strong compared to many systems in the industry.


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