HOT Competition: A large manufacturing firm, on average, offers a high

Question

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. This indicates that the average compensation of all the employees in the firm will increase this year.

Which of the following is an assumption on which the argument depends?

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.

B. The higher average salary for skilled employees is not because of their scarcity in that firm.

C. The percentage of skilled employees is higher now than it had been the previous year in that firm.

D. The average salary of unskilled employees will not increase this year.

E. Employees who have advanced skillsets earn higher salaries than employees who don’t

Bunuel · Accepted Answer

GMATWhiz Explanation

Step 1 – Analysing the stimulus and question stem

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. 
 • In a large manufacturing firm, skilled employees on average get paid more than the unskilled employees. 
 
This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. 
 • This year, a higher number of skilled employees will be taken by the firm than were taken in last year

This indicates that the average compensation of all the employees in the firm will increase this year.
 • Conclusion: The average salary of all employees in the firm will rise.

Step 2 – Pre-thinking

1. The passage tells us that the manufacturing company in general, offers higher salaries to skilled employees. 
 a. What if for some reason this year the company decides not to pay such higher salaries to skilled employees? Say earlier the company policy was to pay higher salaries to skilled employees. Now with more skilled employees being hired, what if their salary is lowered?
 i. Assumption#1: The manufacturing firm will continue to pay similar higher compensation to the skilled employees this year too.  
 b. The passage talks about a higher number of skilled employees being hired. What if the number of unskilled employees hired this year is also significantly higher this year than last year? If that happens the proportion of skilled to unskilled employees may not increase and thus, the average salaries of all employees will also not increase.
 i. For e.g- 
1. Say last year there were 10 skilled and 20 unskilled employees. So the ratio was 1:2
2. Now this year say 40 skilled and 80 unskilled are hired. The ratio will still stay the same 1:2 and the average salaries will not increase.
3. So, it is necessary that the ratio of skilled to unskilled employees should increase this year after the hiring. 
 ii. Assumption#2: The ratio of skilled employees to unskilled employees will increase after the hiring of employees this year.

Step 3 – Answer Choice Elimination

Option A Analysis 
This choice makes an irrelevant comparison between two kinds of skilled employees. The passage talks about skilled employees on average getting paid more. It is quite possible that some of the skilled employees get paid more than other skilled employees. The reason behind this salary difference is irrelevant to the discussion.
Incorrect Choice.

Option B Analysis 
This choice is more of a strengthener than an assumption. The fact that higher average salary for skilled employees is not because of their scarcity in that firm does make us believe that hiring more skilled employees will not affect their higher salary status. But this is not a must be true condition for the conclusion to be true.
Incorrect Choice

Option C Analysis 
This is in line with assumption#2.
 Correct Choice.

Option D Analysis 
If the average salary of all employees will increase then it means the average salary of unskilled employees will also rise. This choice implies just the opposite of what the argument conveys.
Incorrect Choice.

Option E Analysis 
This choice is similar to choice A. Who ears more because of what reason among the skilled employees is irrelevant to the discussion.
Incorrect Choice..

NiftyNiffler · Answer

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. This indicates that the average compensation of all the employees in the firm will increase this year.

Which of the following is an assumption on which the argument depends?

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.

B. The higher average salary for skilled employees is not because of their scarcity in that firm.

C. The percentage of skilled employees is higher now than it had been the previous year in that firm.

D. The average salary of unskilled employees will not increase this year.

E. Employees who have advanced skillsets earn higher salaries than employees who don’t

This question was provided by GMATWhiz
for the Heroes of Timers Competition

Show Answer

Official Answer

C

) D. The average salary of unskilled employees will not increase this year. -- If anything, this actually aids in increasing the overall average, thus strengthening the conclusion E. Employees who have advanced skillsets earn higher salaries than employees who don’t -- Rephrasing of one of the premises of the passage. So, the answer is C

ishita27 · Answer

A. Out of scope. We are not concerned about the type of training.
B. This statement may be true as an assumption, but this does not affect the conclusion.
C. Correct. The assumption is that % of skilled employees will be higher than previous year, hence average salary/employee will increase.
D. This statement can undermine the argument to some extent, but not serve as the assumption. 
E. Out of scope. We don't need to know why skilled employees earn higher salary

VERBAL1 · Answer

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. This indicates that the average compensation of all the employees in the firm will increase this year.

Won't deny that I got a little lost but used elimination to find my way.

Deconstructing the passage: 
In terms of compensation, skilled employees > unskilled ones
In terms of hiring, this year, more skilled employees than previous years.

Conclusion: Average compensation of all the employees in the firm will increase this year.

Pre-think : what could possible render the conclusion valid?
-the no of unskilled people hired is lesser in proportion to the skilled ones so that this compensates in the average figures of the salaries. 
- there are already a more/equal no skilled employees 
- the average salary of unskilled employees will increase to a greater percentage. This will in turn up the average.

Which of the following is an assumption on which the argument depends?

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.
 (out of scope. The argument addresses the salary proportion and its impact on the average salary figures.)

B. The higher average salary for skilled employees is not because of their scarcity in that firm.
 (Not relevant. The reason why their salary is higher doesn't impact the argument. We are looking for proportion between unskilled/skilled so that the point of salary average can be validated)

C. The percentage of skilled employees is higher now than it had been the previous year in that firm.
 (As per the pre-thinking, this one fits)

D. The average salary of unskilled employees will not increase this year.
 (this acts as a weakener of the conclusion. We need the opposite as an assumption for the conclusion to hold true)

E. Employees who have advanced skillsets earn higher salaries than employees who don’t
 (Irrelevant. Same as A)
 
OA : C

AliciaSierra · Answer

Fact- Firm offer higher salary to Skilled Employees than to unskilled employees.
Management decided to hire a higher number of skilled employees.

Conclusion- Average compensation of all the employees in the firm will increase this year.

We need to find out assumption which supports conclusion.

There is no mention of location of training in argument. Eliminate option A

Whole argument is based on employees and average salary. Current Skilled employees are already included in average calculation. People who are not in firm are not making any changes to average. Eliminate option B

core of argument is employees have specific average last year. This Year more new skilled employees got added so if old employees remains same and new gets added, percentage of skilled employees will increase. If % of skilled employees will increase then Average salary will increase. It is simple mathematical thought. This assumption supports conclusion. Let's keep this option.

if average salary of unskilled employees doesn't increase and more skilled employees gets added then this overall average will increase. This assumption doesn't decrease overall average. Eliminate option D

This is mentioned in passage. It is fact. It is not an assumption. Eliminate option E.

MayankSingh · Answer

IMO C

Given:  
 (i) Compensation- Skilled > Unskilled
(ii) Higher recruitment of Skilled Employees this year
 (iii) Conclusion: Average compensation of all the employees in the firm will increase this year.

Question Type : Assumption

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.   Incorrect -  -  We are not concerned with the type of skilled employees (whether they receive training abroad or domestically). This option does not affect the conclusion.

B. The higher average salary for skilled employees is not because of their scarcity in that firm.   Incorrect -  -  Reason for higher salary is irrelevant to conclusion. All that we know and required is that the salary of skilled employees is greater.

E. Employees who have advanced skillsets earn higher salaries than employees who don’t   Incorrect -  -  All we are concerned with is skilled vs unskilled employees. Comparison between Employees with advance skillset & those who don't will not affect the conclusion.

Option C & D look good. Lets apply the " Assumption negation technique " to these options -

D. The average salary of unskilled employees will  not  increase this year. 
   Let in Previous Year :   
Compensation , Skilled (S) = 10 & Unskilled (NS) = 5
Number of employees: S = 50 , NS=50 
 Avg. Salary = 7.5 
  This Year:   Skilled (S) = 10 & Unskilled (NS) = 6
Number of employees: S = 60 , NS=50 
 Avg. Salary = 8.2  
   Negation of option D doesn't break the conclusion. So This option is Incorrect

C. The percentage of skilled employees is   (Not)   higher now than it had been the previous year in that firm.
   Let in Previous Year :   
Compensation , Skilled (S) = 10 & Unskilled (NS) = 5
Number of employees: S = 50 , NS=50 
 Avg. Salary = 7.5 
  This Year:   Skilled (S) = 10 & Unskilled (NS) = 5
Number of employees: S = 60 , NS=61 (S<50%) 
 Avg. Salary = 7.47  
  Negation of option C breaks the conclusion.Correct

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HoneyLemon · Answer

imo  C

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. This indicates that the average compensation of all the employees in the firm will increase this year.

Which of the following is an assumption on which the argument depends?

Conclusion  : the average compensation of all the employees in the form will increase this year . 
 
Avg = (Total Skilled people * compensation to Skilled +Total UnSkilled people * compensation to UnSkilled ) / (Total Skilled people + Total UnSkilled people)

Given  Premise  
compensation to Skilled > compensation to UnSkilled

Hiring of Skilled people this year > Hiring of Skilled people Last year

Hence average sal of all emp will increase only if there is no decrease of total skilled than last year .

with understanding let's go for POE

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.

-- Training from abroad is out of scope
 
B. The higher average salary for skilled employees is not because of their scarcity in that firm.

We are not concerned about the reason for the average salary of skilled employees .. out of scope
 
C. The percentage of skilled employees is higher now than it had been the previous year in that firm. 
 -- Exactly this can be  correct  choice.. Hiring more skilled employees does not mean that .. The company is not firing skilled employees . If the total number of skilled employees is less this year then the average of all the employees will be less.

Hence the conclusion to be true... This has to be the correct assumption

D. The average salary of unskilled employees will not increase this year.

-- Incorrect.. We don't have information about the total average salary of skilled employees .. 
 
E. Employees who have advanced skillsets earn higher salaries than employees who don’t

Advance skill set -> and earning higher

is out scope

diegolamasf · Answer

A large manufacturing firm, on average, offers a higher compensation to skilled employees than to unskilled ones. This year, the management has decided to hire a higher number of skilled employees than they hired the previous year. This indicates that the average compensation of all the employees in the firm will increase this year.

Which of the following is an assumption on which the argument depends?

A. Skilled employees who received their training from abroad earn more than those who received such training domestically.
-- Training abroad or domestically is out of scope.

B. The higher average salary for skilled employees is not because of their scarcity in that firm.
-- Scarcity is irrelevant in the conclusion

C. The percentage of skilled employees is higher now than it had been the previous year in that firm.
-- correct, if you have doubts , apply the negation technique

D. The average salary of unskilled employees will not increase this year.
-- irrelevant

E. Employees who have advanced skillsets earn higher salaries than employees who don’t
-- irrelevant, this is stated in the stimulus

JonShukhrat · Answer

Dear  IanStewart

I can see why C is an assumption, but I fail to see why B cannot be one. Could you please help out?

The author concludes that the average compensation will increase because the number of skilled employees will be greater this year.
He assumes that new skilled employees, too, will be offered similar high compensation. Now, let’s negate B:

B negated: The higher average salary for skilled employees IS because of their scarcity in that firm.

If it’s true that skilled employees receive higher compensation because of their scarcity, then the less scarce they are, the lower compensation they receive. As a result, with more skilled employees, average compensation is not going to rise.

Is there something I am missing?

Thank you very much beforehand.

IanStewart · Answer

As the question is written, it has no right answer, so I wouldn't worry about it much. Answer B is not right, because the stem tells us that the company "offers a higher compensation to skilled employees than to unskilled ones". That is a premise of the argument; it cannot be wrong (the "official explanation" seems to completely miss this point). The reason they offer more compensation to skilled workers is thus irrelevant, because we know for a fact that they do offer higher compensation to skilled workers. So B is not a necessary assumption - maybe the company does only pay skilled workers more because of their scarcity, but maybe the company won't hire enough skilled workers to meaningfully address that scarcity, say, and the pay discrepancy will continue.

But C is not a good answer either. The stem compares the present with the future: the company will hire skilled workers and the average salary "will increase". Answer C compares the present with the past: " The percentage of skilled employees is higher now than it had been the previous year in that firm." We don't care about how things changed from last year to this one. We care how things are going to change during this year, after the hirings that have not yet happened. So C is irrelevant, as it's worded.

It's also easily possible for the average salary to rise even if the proportion of skilled workers drops. Maybe the company will give every employee an enormous raise, skilled or not. Then the average salary will go up no matter who they hire. So C doesn't need to be true for the conclusion to be true, and I'm not sure I'd agree that the argument "depends" on C (assuming C used the right verb tenses). The conclusion certainly doesn't depend on C, though if you don't assume C the specific logic of the argument becomes meaningless.

HOT Competition: A large manufacturing firm, on average, offers a high

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HOT Competition: A large manufacturing firm, on average, offers a high

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

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From 555 to 765: 210-point Improvement

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My Rewards