The following is part of a business plan being discussed at a board meeting of the Perks Company:
“It is no longer cost-effective for the Perks Company to continue offering its employees a generous package of benefits and incentives year after year. In periods when national unemployment rates are low, Perks may need to offer such a package in order to attract and keep good employees, but since national unemployment rates are now high, Perks does not need to offer the same benefits and incentives. The money thus saved could be better used to replace the existing plant machinery with more technologically sophisticated equipment, or even to build an additional plant.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
The author has made a fair point that as unemployment rates increase, it becomes less worthwhile to offer such benefits, but the question remains as to whether this holds true in all situations. If an economy is experiencing an economic boom, then companies may be in a position to offer more generous packages of benefits and incentives in order to attract employees. In that scenario, the employees would already be more desperate for work and would be less able to make informed choices about employment. Conversely, if the unemployment rate is much lower, then it is in a company’s best interest to offer attractive salaries and benefits, which will attract employees who might otherwise find better jobs elsewhere
The author makes a fairly good case for replacing the current equipment with more advanced technology. However, it is not clear how replacing one piece of equipment with another will result in larger profits. One could argue that the cost of new equipment will be offset by more efficient use of labor, thus producing greater profits. On the flipside, one could argue that replacing older equipment with more advanced technology will entail increased costs, which will reduce profits. The company will need to assess the costs and benefits of each option before deciding which is best
Since the Perk’s Company is located in an area with relatively low unemployment, it might be wise to offer generous salaries and benefits in order to attract workers. If the company were located in an area where the unemployment rate was very high, it might not make sense for the company to offer such generous packages of benefits, since workers would no longer be so desperate as to accept lower salaries
However, the author’s argument assumes that Perk’s will always offer benefits, and that its employees will accept only the benefits offered. As the economy changes and employees become more educated and aware of their options, it may become harder to find workers willing to accept the company’s benefits package. If the company were to offer only modest salaries, then the company would be in a much better position to attract the most qualified candidates. The importance of investing in new, state-of-the-art technology cannot be underestimated. In order to survive and thrive as a company, Perk’s must keep abreast of technological advances. If it is not willing to continue to invest, it may find itself at a competitive disadvantage
Ultimately, the Perk’s Company must weigh the costs and benefits of the various options before making a final decision. The current situation is not set in stone. As economic conditions change, the company may need to re-evaluate its benefits package and make adjustments as needed.