The following appeared in a memorandum from the director of research and development at Ready-to-Ware, a software engineering firm.
The package of benefits and incentives that Ready-to-Ware offers to professional staff is too costly. Our quarterly profits have declined since the package was introduced two years ago, at the time of our incorporation. Moreover, the package had little positive effect, as we have had only marginal success in recruiting and training high-quality professional staff. To become more profitable again, Ready-to-Ware should, therefore, offer the reduced benefits package that was in place two years ago and use the savings to fund our current research and development initiatives.
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.
In the memorandum, the director of Research and Development at Ready-to-Ware makes a recommendation to cut the benefits currently being offered to its employees and revert back to an older version of the benefits plan that the company had two years ago. This recommendation is made in light of the increased costs of the benefits program to the company, whereby the director claims that the savings from a reduced benefits plan can be better used for the research and development efforts. The claims being made in the above mentioned prompt are of great merit however, there are several flaws that must first be thoroughly investigated before making such significant changes to the benefits plan. First, the director has failed to take into account the effect of the better benefits plan on the existing employee retention rates. Second, no data has been presented to back the claim that the company may be able to operate more efficiently if cuts are made to the benefits plan. Third, the director has failed to take into consideration other areas of the company’s operations where cuts can be made with lesser impacts.
First, the director claims that the increased benefits plan has not been successful in increasing recruitment and training of staff at the company. However, he has failed to take into account that the plan may have contributed positively to the retention of existing employees. For example, existing employees with great qualifications may change employers for better compensation package and perks. Hence, it is possible that the better benefits package by the Ready-to-Ware company may have encouraged some employees to stay with the organization as it shows that the organization cares for its employees and their families.
Second, the director has not presented any data to back his claims. For example, it is unclear what percentage of the total operating budget is being spent on the benefits plan in comparison with other cost items. Similarly, the director has not presented data on how the cuts to the benefits plan can improve the cost efficiencies of the company’s operations. Therefore, to further investigate the effects of the better benefits plan, the company must conduct some internal research using employee surveys and interviews to determine what the employees think of the benefits plan. Such form of data is highly necessary to help make informed decisions based on evidence.
Third, the director has failed to take into consideration other areas of the company’s operations where cuts can be made with lesser impacts. When such strategic decisions are made at a higher management level in an organization, it is crucial to look at the organization as a whole, whereby the costs and benefits of expenditures on each component of the organization’s operations need to be taken into account. In the case of the Ready-to-Ware company, it may be possible that the expenditure in the area of benefits to employees makes up only a small proportion of the total expenditures made by this organization. If this is the case, then efficiencies in the business operations can better be achieved by reducing costs in other sectors of the business.
In conclusion, the decision to reduce the benefits to employees is a crucial one that has the potential to have a great impact on the organization’s workforce, morale, culture, and reputation. Hence, various key factors of the company’s operations need to be evaluated and data needs to be collected from the employees as well as data on financial costs and benefits of each major expenditure category of the business. Empowered with such data and insights, the management team would be in a better position to make such crucial decisions about cost cutting.