Motivating Employees at the SAS Institute - Case Study Example

Essay Individual Case Analysis Motivating Employees at the SAS Institute: A Global success Story S Introduction This paper attempts to explore the motivation theories that have been successfully applied at the SAS Institute. Employee motivation is one of the most predominant aspects of Human Resource Management, as every manager knows that motivation is the principal component that leads to performance improvement. Apart from the basic factors such as; ability, ambition level and education, managers also need to address variables like age and gender separately to motivate a diversified workforce. It is not easy to understand human nature, as each individual is unique and therefore responds differently to what may be a common situation. Thus, it becomes necessary to adapt to several methods of motivation to address diversified motivational requirements of all the employees in an organization. For instance, one employee may view more time off as an adequate reward for doing the job, while another employee may feel that a bonus would be the more appropriate reward for doing the same job. In such situations, it is important that the manager understand what it takes to drive each individual. To address these varied issues, several motivational theories have been proposed over the years. Organizations and managers study and implement these motivation techniques that serve to keep the employees motivated, in order to improve: individual performance, productivity, team work and continued retention. The aim of all the theories is fundamentally the same, but each theory approaches the issue from different angles. Alderfer’s ERG Theory Alderfer’s (1969) ERG theory, was based on Maslows (1943) hierarchy of needs that proposes: people have a variety of basic needs, which they go about fulfilling in a sequential manner, from lower to higher. Once lower level needs like security and emotional fulfilment are achieved a person moves forward to fulfil midlevel needs that include social and self-esteem needs. Next in line are the highest level of needs, encompassing the need of acknowledgement / recognition among fellow beings and finally the need for self-actualization. Alderfer aligned this need theory to motivation by combining the lower level needs as the need for Existence, midlevel needs as the need for Relatedness and the higher level needs as the need for Growth. Hence, the term ERG theory came into being. In the work place the need for monetary compensation and periphery benefits represent the existence needs; relations and interaction with colleagues represent the relatedness needs and the inherent desire for personal progress and success represent the growth need (Arnolds & Boshoff, 2002). However, unlike Maslow, Alderfer’s ERG theory holds that people act towards fulfilling several needs at the same time. Herzberg’s (1959) Two-Factor Theory Herzberg’s (1959) two-factor theory, proposed that motivation is based on two factors, namely; hygiene factors and motivation factors. Hygiene factors are actually those aspects of a work place that can de-motivate employees if not present, like proper working conditions, which include things like good equipment to work with, comfortable chairs, neat and clean restrooms, good cafeteria, etc. On the other hand, motivational factors are those aspects that propel the employees to perform better. The presence of motivational factors such as; responsibility, challenging work, accomplishment, recognition, etc. ensure higher levels of job satisfaction among employees. Vroom’s Expectancy Theory Vroom’s expectancy theory (as cited in Geiger & Cooper, 1995) proposes that motivation is the result of positive expectations like; success, accomplishment, and triumph. Thus, employees respond to challenging goals with the more vitality, as this gives them a chance to prove themselves capable of reaching higher levels of performance. Hence, Vroom proposes that Valence, Expectancy and Instrumentality are the variables that lead to motivation. Valence equates to the value attached to the outcome by the employees. Expectancy equates to the conviction that additional effort will result in improved performance. And instrumentality equates to the belief that if work is done well, it will be well rewarded. Valence is the amount of importance that an employee places on the expected outcome. Motivation At The SAS Institute At The SAS Institute all the above mentioned motivation theories have been successfully implemented. This can be discerned from the methods it uses to motivate its workforce. Consequently, the SAS institute is considered to be one of the “100 Best Companies to Work for in America” and it has been cited 13 times as one of the “100 Best Companies for Working Mothers” by the Fortune magazine. Moreover, the SAS Institute continues to attract and retain the best talent in the software industry and have satisfied employees, even at the time of economic downturns. All this is attributed to the way it treats its employees. Every employee is provided with interesting and challenging work that develops their potential in the best way and motivates them. This is ensured by carrying out new product development internally, this meets positive expectations like; success, accomplishment, and triumph (Geiger & Cooper, 1995). This also adds to the employee’s self-esteem and enhances their sense of job satisfaction. Apart from the work itself, fair and equitable rewards in the form of pay and bonuses linked to performance for a job well done adds substantial motivation for performing well. Hence, all three factors of Vroom’s theory, Valence, Expectancy and Instrumentality are brought in to play. The company also lays emphasis on fair treatment and an attractive and comfortable work environment. As stated in the case studies “all employees have private offices and access to latest technology.” These facilities are in accordance with Herzberg’s (1959), two-factor theory, which proposes that motivation is based on two factors, namely; hygiene factors and motivation factors. While, the working environment and facilities successfully demonstrate the hygiene factors, interesting and challenging work, linked to rewards demonstrates motivation factors. By providing reasonable working hours and other facilities that help employees to balance work and personal life, the SAS Institute is able to significantly reduce employee turnover rates. Employees are not expected to work for more than 35 hours per week, plus the availability of two low cost child care facilities ensure that working mothers are not fraught with concern for their children during the work hours. SAS even has high chairs in the company cafeteria; to enable employees to eat lunch with their children; such facilities that take care of the familial aspects of employees are especially beneficial and act as a great motivator for working parents. Additionally, 77,000 square foot fitness and recreation centre, on site medical centre and a putting green, are some more important factors that keep employees relaxed and make them feel comfortable, along with providing opportunities to bond and develop interpersonal relationships with their fellow workers. Employees at SAS Institute are also encouraged to change jobs within the company, this element helps to keep the employees sufficiently challenged while allowing them to learn and develop new skill sets that further serve to meet their growth needs, this element of motivation particularly addresses the need of young employees who are eager to try out new avenues and are in need of constant mental stimulation. All the above mentioned motivational efforts implemented at the SAS Institute encompass the needs of existence that include monetary compensation and periphery benefits; relatedness needs that are possible due to interaction with colleagues at the fitness centre or the golf course and the growth needs that are met by changing, challenging and rewarding work opportunities, which fulfil the desire for personal progress and success (Arnolds & Boshoff, 2002). Another important factor that accounts for SAS Institute’s continued success with its employees is that Jim Goodnight, founder of SAS and CEO maintains that the managers should treat employees the way managers want to be treated themselves. This insightful attitude on the leaderships part, paves the way for establishing a culture where every employees is respected and acknowledged for the contributions they make, whether the contribution is minor or major. Hence, this atmosphere of mutual respect fulfils a very important need prevalent in all humans; the need for self-esteem and acknowledgment from peers. Reward Strategy A system of recognition and reward is devised by most companies, to obtain the best performance out of their employees. The contemporary theory holds that performance is the consequence of the contractual association agreed to by the employer and employee at the time of hiring. O’Neill and Adya (2007), describe this contract as a short term transactional contract that marks the beginning of the relationship, which is uncertain, since both the employer and employee are treading uncharted territory, with expectations and apprehensions on both sides. The main characteristic of this tentative relationship is dependent upon fair treatment and the subsequent rewards for performance based outcomes. Hence, it is clear that SAS Institute’s reward strategy is more contemporary. The advantages of their ‘Reward Strategy’ can be observed not only in the extent of employee satisfaction and retention, but also by the creative and high quality products developed by motivated and satisfied employees. These innovative products are responsive to customers’ present and future needs, making SAS the top provider for 96% of the top 100 companies in the Fortune 500 list. These companies use SAS products for any number of purposes including risk management, monitoring and measuring performance, managing relationships and customers and suppliers and detecting fraud. All these products are the fruit of a well rewarded workforce who are given every opportunity to expand their horizons, while they are cared for and treated fairly by the company. ACAS ACAS stands for Advisory, Conciliation and Arbitration Service. As stated on the ACAS site, it provides up-to-date information, independent advice and high quality training in order to improve organisations and working life through better employment relations. They work with employers and employees to solve problems and improve performance. Julia’s employers would do well to organise a training session by ACAS, as stated on their site the session will provide practical guidance on the effective management of stress and short and long term absence in the workplace. HSE HSE or Health and Safety Executive, endeavour to improve health and safety management and performance. HSE, works for this in partnerships with businesses, with workers and their trades unions. They provide advice, guidance and information – both nationally and locally. Julia could make use of the Employment Medical Advisory Service provided by HSE, to deal with her stress problems caused by her work. HSE can provide advice and guidance about how she can best resolve her problems. Conclusion It is clear from the above discussion that employee motivation is more important than ever. Motivated employees make a substantial difference to a company’s bottom line. As has been demonstrated in case of the SAS Institute, well motivated employees contribute to creative and qualitative development of products that meet customer expectations and requirements, leading to the continuous growth and success of the company. Furthermore, reduced employee turnover also prevents loss of capital and resources spent on hiring new employees. Hence, the use of varied motivational theories at the SAS Institute has enabled the company to meet the motivational needs of each employee. Intrinsic and extrinsic needs are taken care of by providing extensive facilities apart from performance related monetary rewards. Thus, the company successfully meets the expectations and desires of its manifold staff that is spread across continents. SAS has had the unique fortune of understanding the worth of skilled employees, along with the art of retaining them in the organization. For an organization the size of SAS, it is of utmost importance that the employees are committed, dedicated and totally focused on their assigned task in a manner that allows them the space to be innovative as well. In order to achieve such level of determination and competence, a company has to have fundamentally sound management system that lends its performance that extra sharp edge. References Alderfer, C.P. (1969). An empirical test of a new theory of human needs. Organisational Behaviour and Human Performance, 4, pp. 142-175. Arnolds, C. A., & Boshoff, C. (2002). Compensation, esteem valence and job performance: An empirical assessment of Alderfer’s ERG theory. International Journal of Human Resource Management, 13, 697-719. Geiger, M. A., & Cooper, E. A. (1995). Predicting academic performance: The impact of expectancy and needs theory. Journal of Experimental Education, 63, 251-263. Herzberg, F., Mausaner, B. & Snyderman, B.B. (1959). The Motivation to Work. New York. Wiley. Maslow, A.H. (1943). A theory of human motivation. Psychological Review, 50, pp. 370-396. O’Neill, B. S., & Adya, M. (2007). Knowledge sharing and the psychological contract: Managing knowledge workers across different stages of employment. Journal of Managerial Psychology, 22(4), 411-432. Read More