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SAS INSTITUTE : A DIFFERENT APPROACH TO INCENTIVES AND PEOPL

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nikhar jaggi

on 26 September 2013

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Transcript of SAS INSTITUTE : A DIFFERENT APPROACH TO INCENTIVES AND PEOPL

SAS INSTITUTE : A DIFFERENT APPROACH TO INCENTIVES AND PEOPLE MANAGEMENT PRACTICES IN SOFTWARE INDUSTRY

COMPANY BACKGROUND
Let us first understand SAS Institute
Benefits and Work Environment
Flat Organizational Structure
Relaxed timings : 35-hour work week
Employee-centered
Employee Engagement
Employee interdependence
Cross Funtional Teams
Low turnover rate
Performance evaluation
Physical surroundings and facilities
Medical Center, Fitness Center, child care facilities, medical facilities, counseling, Pool & various other amenities

Outsourcing
NO
Training
SAS institute believe in building strong foundation that’s why they put-in lot of efforts on training & development of new employees.
They organize orientation program for new employees by senior managers. Which includes information about business model, heritage of the company, demographics of customers’ database and SAS’s current standing.
Along with this they focus on periodic training in technical, sales & even managerial fields and the fun is employees keenly participate.


BUSINESS MODEL
UNIQUE
PEOPLE POLICIES
Organization Structure and Career Development
Conclusion
SAS is different, different than most of the Silicon Valley software companies where others are getting into the practice of outsourcing & contract hiring to save labor costs.
The culture of the valley which was incentive based, started to selectively adopt SAS model of benefits like physical fitness, campus cafeterias, partner benefits etc
Company is planning to grow its work force by 12%-13% next year which will lead to 400 new openings.
Could it continue to succeed with the same management practices that had brought it to its present position?

History
Founded in 1976
Founders: Dr. James Goodnight, Antony Barr, Jane Helwig & John Sall
Original product : Analyze agricultural data
Later expanded to become a 25 product system for data warehousing, data mining and decision support

Current Scenario
World's largest privately owned software company
9th largest independent software firm in the world
Voted as the “Best 100 companies to work for"
Voted as "Best 100 companies for working mothers
Listed #3 - Fortune's first survey of best companies to work for ( Jan 1998)

Corporate Culture
Organizational structure is both flat and informal : 27 units report directly to Dr. Goodnight
Strongly emphasizes collaboration, teamwork, cooperation and mutual respect
Focuses on long-term commitments instead of short-term profits : both in business as well as employee recruitment
Open to risks and experimentation
Gives employees the freedom to innovate and explore their ideas and creativity to come up with new products
Customer Driven development process




Mission and Vision
VISION - SAS transforms the way the world works, giving people THE POWER TO KNOW

MISSION - SAS delivers proven solutions that drive innovation and improve performance



What they do
SAS products offers an annual licensing arrangement after 30 days trial run period that povides for free upgrades and customer support
More than 30% of its revenue is spend on R&D ( twice the industry average)
Diversified developments


Why they do What they do
Focus is on greater market penetration over margins
Revenues generated with license renewal
Current renewal rate is over 98%

Principles
Treating everyone fairly and equally : Everyone has private offices.
Motivation and Respect People to do a good job :No Monitoring and Control
Decisions and Planning are done in long term view :Spends 30% on R&D
Bottom – Up Decision Making : SAS is a privately held company and doesn’t have to convince its board members for profit.
Recruitment
Compensation
• No stock options or phantom stock : This avoids frauds as stocks are based on company performance
SAS deemphasize financial incentives as a source of motivation
• Profit sharing retirement plan : 15% of into employees profit sharing retirement plans (Maximum permissible) ; No employee contribution required
• Yearly Increment and Yearly Bonus : Bonus is between 5.5% to 8% at the end of Year ; Based on Quarterly based performance review

Organizational structure is both flat and informal : 27 units report directly to Dr. Goodnight
No interference organization : People manage their own divisions.
Culture : All managers are working managers; they are doing their job & managing others at the same time.
Scope for inter departmental changes & cross departmental changes
Thought behind this is changes will surely happen but SAS provided change to their employees within the organization.
They are building relationship instead of infrastructure.
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