Sanity Inc.

The easy critique of all this is that since SAS is owned by just two people -- Jim Goodnight, who owns two-thirds of it, and John Sall, 50, senior vice president, who owns the rest -- and since both of them are billionaires (Goodnight, with $3 billion, is number 43 on the Forbes magazine list of the 400 richest people in the United States; Sall, with $1.5 billion, is number 110), they can do what they want. If Goodnight wants a sculpture, he opens up his wallet and buys it. (In fact, SAS has a full-time, four-person art group, headed by an artist who was originally hired to create paintings for the company.)

But that's a cheap shot, a critique that doesn't do justice to the way Jim Goodnight does business. The benefits build a foundation of loyalty that supports the bottom line. The payoff starts with turnover. A typical software company of SAS's size loses 1,000 employees per year. At SAS, the number lost is about 130 -- which translates into almost 900 employees per year whom SAS doesn't have to replace. The result: a huge reduction in expenses for recruiting candidates, for flying them in for interviews, and for moving new hires across the country, as well as a reduction in the amount of work time lost while jobs remain unfilled.

Two independent consulting companies -- Hewitt Associates and the Saratoga Institute -- have estimated that the cost of replacing a worker runs between 1 and 2.5 times the salary of the open job. The more sophisticated the job, the higher the cost. So, given a factor of 1.5 (which is conservative) and an average SAS salary of $50,000, the company arguably saves $67.5 million a year, compared with what its competitors shell out. That comes to an extra $12,500 per year per employee that SAS can spend on benefits.

Russo's division pays for many of those work-life benefits. "Is that my budget, $67 million? No way," says Russo. "That's the beauty of it. The cost of the buildings, of running the gym -- that's pretty inexpensive. There's no way I could spend all of the money we save."

A more subtle critique of the SAS corporate culture is that it might spawn unintended management problems. It might create a work atmosphere so relaxed, so playful, that urgency and quality could end up taking a back seat to finishing a workout.

David Russo seems unconcerned: "If you're out sick for six months, you'll get cards and flowers, and people will come to cook dinner for you. If you're out sick for six Mondays in a row, you'll get fired. We expect adult behavior."

John Sall, in addition to being a co-owner of SAS, runs his own small group within the company (it develops statistical-analysis software for desktop machines), and except for a summer job in the melting room of a foundry, he has never worked anywhere else. So how does SAS prevent people from taking advantage of its policies? What if people decide to spend all day playing billiards or Ping-Pong? The question has clearly never occurred to Sall. "I can't imagine that playing Ping-Pong would be more interesting than work."

Responsibility Equals Accountability

On a midsummer afternoon, Kathy Passarella is sitting in the main cafeteria at SAS. The room is airy and busy; live piano music plinks in the background. The crowd is so young and so informally dressed that the place seems more like a college campus than a corporate one. Passarella, 42, is no naif when it comes to work. She has been at SAS for a year and a half, training new R&D employees in computer skills. In one of her previous jobs, she worked as a programmer at Bell Labs, in Piscataway, New Jersey.

Unprompted, she connects SAS's approach to benefits to the performance of the people who receive them. "You're given the freedom, the flexibility, and the resources to do your job. Because you're treated well, you treat the company well." Then she makes a fascinating observation, one that perhaps only an outsider would find interesting. "When you walk down the halls here," she says, "it's rare that you hear people talking about anything but work."

The informal environment at SAS can be misleading. There is nothing lax about this company -- or about its products, its work ethic, its standards. This is a company built on accountability: SAS is managed lightly but not casually.

From his computer, Goodnight can look up detailed sales and performance information; he can track data on technical-support calls, which are sorted by product and by time-to-resolution; he can monitor bug reports in new software, noting how quickly testers and developers are eliminating flaws in products headed for release.

The sense of accountability also extends to documentation. Every SAS product manual includes the names of the developers and testers who created or updated the software. (Try to find the name of an actual human being in your Microsoft Word manual.)