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Burr Incorporated spends approximately 20% of its budget on employee

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Burr Incorporated spends approximately 20% of its budget on employee  [#permalink]

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New post 20 Aug 2016, 17:34
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Question Stats:

52% (01:35) correct 48% (01:55) wrong based on 299 sessions

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Burr Incorporated spends approximately 20% of its budget on employee benefits. In an effort to curb costs, Human Resources has decided to run a pilot program with volunteer employees, in which volunteers received a 5% raise in pay for a 25% reduction in benefits. During the first year of the pilot program, the volunteers’ productivity matched or exceeded their previous performance.

Which of the following, if true, would provide the strongest justification for Burr Inc. not to implement the pilot program company-wide?

(A) 55% of the employees who chose to take part in the pilot program were under the age of 30 and so were less worried about retirement benefits being cut.

(B) Other companies that have implemented similar programs successfully have all been much smaller than Burr Inc.

(C) The pilot program volunteers were among the employees in Burr Inc. who were least likely to take sick days.

(D) Promotions amongst those in the volunteer group were contingent upon their performance while in this group.

(E) Alternatives to cutting benefits might be able to save Burr Inc. more than 5% of what the company pays in salary and benefits.
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Re: Burr Incorporated spends approximately 20% of its budget on employee  [#permalink]

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New post 21 Aug 2016, 00:55
DrAB wrote:
Burr Incorporated spends approximately 20% of its budget on employee benefits. In an effort to curb costs, Human Resources has decided to run a pilot program with volunteer employees, in which volunteers received a 5% raise in pay for a 25% reduction in benefits. During the first year of the pilot program, the volunteers’ productivity matched or exceeded their previous performance.

Which of the following, if true, would provide the strongest justification for Burr Inc. not to implement the pilot program company-wide?

(A) 55% of the employees who chose to take part in the pilot program were under the age of 30 and so were less worried about retirement benefits being cut.

(B) Other companies that have implemented similar programs successfully have all been much smaller than Burr Inc.

(C) The pilot program volunteers were among the employees in Burr Inc. who were least likely to take sick days.

(D) Promotions amongst those in the volunteer group were contingent upon their performance while in this group.

(E) Alternatives to cutting benefits might be able to save Burr Inc. more than 5% of what the company pays in salary and benefits.


Pilot Program : A 5% raise in pay for a 25% reduction in benefits.

Important Premise : During the first year of the pilot program, the volunteers’ productivity matched or exceeded their previous performance.

We need to provide some information on the basis of which we can conclude the Pilot program is not going to be beneficial.

(A) 55% of the employees who chose to take part in the pilot program were under the age of 30 and so were less worried about retirement benefits being cut. --> No information on whether the plan would be a success.

(B) Other companies that have implemented similar programs successfully have all been much smaller than Burr Inc. --> Other companies. Irrelevant.

(C) The pilot program volunteers were among the employees in Burr Inc. who were least likely to take sick days. --> How does that matter? Argument never said there is any change in the benefits or Payscale for the ones taking more sick leave or not.

(D) Promotions amongst those in the volunteer group were contingent upon their performance while in this group. --> Great. Most are exceeding or matching their productivity. SO, promotion chances are great , thus already an increase in salary and 5% hike could mean alot. Hence, the answer.

(E) Alternatives to cutting benefits might be able to save Burr Inc. more than 5% of what the company pays in salary and benefits. --> We have to focus on the pilot program only. Irrelevant.
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Re: Burr Incorporated spends approximately 20% of its budget on employee  [#permalink]

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New post 12 Jan 2018, 06:15
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incentives for volunteers: + 5% in pay - a 25% benefits
because of D, now incentives for volunteers: + 5% in pay - a 25% benefits + Promotions (based on performances)
The argument already states that performances are positive.
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Re: Burr Incorporated spends approximately 20% of its budget on employee  [#permalink]

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New post 07 Aug 2018, 08:09

Official Explanation


Burr Inc. hopes to save money and increase productivity with this new program. They thus modeled the program on a small group of their employees; in this pilot study, the program achieved both of these goals. To determine what might prevent the company from implementing the program, we need to consider factors that might make this study not applicable to the entire company: in other words, what might make it an inappropriate model.

(D) is the credited answer because under normal circumstances, the average company employee would not feel this same pressure and would not necessarily be similarly motivated; making promotions contingent on performance while in this pilot changes the motivation of these employees. While the company would still save money, productivity would probably not be as high as it was during the pilot study.

On the other hand, the percentage of employees concerned or unconcerned about a particular benefit, as in (A), would not affect the appropriateness of a program that would cut that benefit for the entire company. The terms of this argument are not concerned with employees’ opinions of it.

The size of other companies that have implemented similar programs, and their success, are not necessarily reflective of the circumstances at Burr Inc. (B) does not describe a reason that the pilot study would not mirror the program’s application to the larger company as a whole.

While the productivity of the pilot program’s employees may have been affected by their avoiding sick days, as in (C), note that these employees were simply AMONG those who took the least sick days. This group’s prevalence in the pilot group could have been proportional to their prevalence in the company as a whole; we don’t have enough information to know.

(E) may also seem tempting, but remember that we have to evaluate this program in terms of the company’s TWO goals: not only saving money, but also increasing productivity. While (E) might provide a good alternative to the pilot program on the first count, it fails to provide a good alternative for the second.
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Re: Burr Incorporated spends approximately 20% of its budget on employee &nbs [#permalink] 07 Aug 2018, 08:09
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