Sanity Inc.

The Good Ship Lollipop

It's just past 6 a.m., and Larnell Lennon is loosening up with some buddies in the SAS fitness center. Despite the hour, the place is moderately busy. SAS has 36,000 square feet of gym space, which includes a large, hardwood aerobics floor; two full-length basketball courts; a private, skylit yoga room; and workout areas segregated by gender -- for people too shy to ride an exercise bike in front of coworkers of the opposite sex. Outside, there are soccer and softball fields. Massages are available several times a week, and classes are offered in golf, African dance, tennis, and tai chi.

Lennon, 31, a software tester in the display-products group, remembers the first time he saw the gym, eight years ago, when it was part of a workout complex that was only two-thirds as large as the current one. "I had heard the company's name, but nothing more," Lennon says. "I had a friend here at SAS, and he invited me over to the gym during lunch. That gym caught my attention. I saw how people related to each other." At the time, Lennon was just a year out of school, working as a programmer at Northern Telecom (now Nortel). "The professional standards there were great," he says. "But you went to your cubicle in the morning, and then you left at the end of the day. The atmosphere was tight."

That first visit to the SAS gym was in February 1991. Two months later, Lennon interviewed for the position of development tester. That June, he was hired. "I came back, and I met managers. The atmosphere went beyond the gym. I liked what I heard." How much did he like it? He took a 10% pay cut to join SAS: "It's better to be happy than to have a little more money."

Lennon had more surprises coming. In what may qualify as the most over-the-top health benefit around, SAS launders his (and other employees') sweat-soaked workout clothes and then returns them, fresh and fluffy, the next day -- a service that many people's spouses wouldn't even consider providing. "This is a no-excuses facility," says Kelli Dutrow, 33, a wellness coordinator. At SAS, you can't use grungy workout clothes as a reason not to exercise.

What's the point of this largesse? That question hardly interests Jim Goodnight anymore. He tells a story about interviewing for a computer-programming job -- a job that he didn't take -- back in the 1960s. "The programmers sat in desk after desk, lined up row after row, in a building that was like an aircraft hangar. No walls, no privacy." He gives a soft snort. "I hear that's what Cisco is like these days. And Intel."

Not in the kingdom of Goodnight. The business value of generous benefits is so self-evident that it requires just two sentences to explain: "I believe that a person's surroundings have a lot to do with how a person feels. We try to have nice surroundings here."

David Russo, 54, became SAS's head of human resources 17 years ago, when the company had just 60 employees. "To some people," says Russo, "this looks like the Good Ship Lollipop, floating down a stream. It's not. It's part of a soundly designed strategy."

The point of the strategy is to make it impossible for people not to do their work. If you're worried about finding an assisted-living center for your aging mom up in Brooklyn, call the company's elder-care coordinator, who will make calls for you. If you need allergy shots, why shouldn't you be able to get them on campus, at the SAS health clinic? Says Russo: "Jim's idea is that if you hire adults and treat them like adults, then they'll behave like adults."

The history of the company's benefits is revealing. The story begins when SAS was still a startup -- a startup with a number of women working for it. "Our women employees were two or three years into their careers -- at the top of their talent curve -- and they started deciding to stay home and have kids," says Russo. "We knew and they knew that they'd have to start from scratch if they stepped out. Jim said, 'We can't lose those people. We're too small a company.' So we started providing day care in the basement. We began with 4 or 5 kids; now we have 528" (including some who attend a nearby private facility). SAS was by no means obligated to offer day care. But it couldn't afford to lose its female employees. (And it hasn't: Today 51% of SAS managers are women.)

These days, a group at the company meets monthly to discuss proposed new benefits, evaluating them in the context of a three-part test: Would the benefit accord with SAS's culture? Would it serve a significant number of employees? And would it be cost- accountable -- that is, would its perceived value be at least as high as its cost? Every benefit has to pass all three tests. Coming soon: advice and referrals on financial planning for college and retirement.