SAS and Nordstrom

SAS Institute

Sometimes when you read about about a company that claims to be a great employer, you come away with the feeling they’re completely deluded.  Or that the measure of greatness when applied to an employer is skewed based on things that don’t really matter to the employee.   What makes a company a great place to work?  Is it a good salary, stock options, a nice office?  Sure, these are some of the things that you hope for when you look for a new job, but the greatness of an employer goes far beyond monetary accoutrements.  I believe that a great employer knows and meets the needs of their staff without making it a selling point.  So what is the differentiator between and average employer and a great one?  It’s all about management approach and business philosophy.  The pefect example is the SAS Institute.

SAS is a private company that pays well and provides for the needs of their employees (see Maslow), but the differentiator is the philosophy by which they manage their people.  Instead of managing (micro managing) employee activities, they place an emphasis on coaching and mentoring.  This has been a consistant theme as we’ve learned about these companies throughout the semester.  The great companies place a high degree of emphasis on mentoring employees and then getting out of the way.  Instead of monitoring and controlling their people, SAS trains and mentors them and then allows them to use their own creativity to get the job done. 

Another key is the lack of a formal performance management / review system.  I’ve railed about the evils of performance reviews in previous posts, and it seems that SAS holds a similar view.  Every single performance management tool out there has some flaw that is eventually discovered and exploited to manipulate the process.   The SAS article also pointed out that good people don’t thrive on conflict.  When managers have to choose between the conflict of writing a substandard review or giving undeserved marks and ignoring the problem, many will take the high road and give the employee a review they don’t deserve.  Or if they are the type of person that thrives on conflict they’re probably a really bad manager and/or bad employee.

My favorite thing about the SAS Institute is their refusal to outsource.  In a day when many software developers outsoure or even worse offshore their coding, SAS refuses to do so.  Everything from dining services to coding to human resources is handled in house.    SAS provides in house day-care, gymnasium, cafeteria services , and even a medical clinic.  The leadership of SAS holds the idea that any savings garnered by using outsourcing is quickly lost because of the loss of quality.  One executive, Barrett, went so far as to say “if you want something done right, own it and control it”.  

So what is the differentiator between an average employer and a great one?  It’s the philosophy by which a company manages their human assets.  SAS has the right management philosophy, and it’s all about people.  You give them the tools they need to do their jobs, treat them fairly, meet their needs, and then get out of the way.

Nordstrom: Dissension in the Ranks?

Now to contrats SAS Institue we have Nordstrom’s.  While SAS set up an above board / employees first system that was clear and easy for the employee to work through, Nordstrom’s is quite the opposite.  Nordstrom’s set up a devious system where the employees were penalized if they reported over-time hours and hours they spent doing things other than selling.  That wouldn’t be as heinous if this time weren’t required, however off-sales time was expected in order to provide general customer service.  The system Nordstrom’s set up was built to reward competition, but the managers were at best naive and didn’t see the effect this had on employees. 

Nordstrom’s keyed on and rewarded sales per hour.  Any hours employees spent doing anything but selling actually lowered the sales per hour figure and was penalized.   One Nordstrom’s even had required weekly Saturday meetings where the time clock was always out of commission in some fashion.  When employees hand wrote their hours on the time card, management used white-out to remove the entries.  I’m certain this is illegal, but it wasn’t reported for a long time, because of management back lash for any complainers. 

Nordstrom’s ended up with a ton of complaints and lawsuits because of their unfair employement practices.  I could go on and on about the unfair practices and incompetent management, but suffice it to say where SAS is an incredible place to work, Nordstrom’s not so much.  The idea of treating employees well apparently never entered the equation for Nordstrom’s.  Sure they treated the customer very well, but that was at the expense of the employees.  If you’re excellent customer service comes at the sacrifice of fair employee treatment, eventually the customers will stop being treated well.  Nordstom’s is pretty much a dud for the employee, two thumbs down.

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