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Author Message
Intern
Joined: 22 May 2014
Posts: 26
Location: India
GMAT 1: 560 Q46 V29
GPA: 3.64

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18 Mar 2018, 03:51
“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.”

The author concludes that the Perk company needs to reduce the generous package of benefits and incentives, and should invest its money in reinvigorating existing plant machinery or in installing additional plant. The author gives the following reason to support his suggestion: In the particular period of high unemployment rate, the company does not need to redirect benefits package and incentives to attract and retain employees. Th author's reasoning is flawed for several reasons.

First, In analysis of the argument, The author a oversimplified the situation. The author recommends reducing the benefits and incentives in future. The author fails to account that because of these incentives and packages the company maintains its productivity level. For example, the United airlines, an internal American airlines, keeps supplying additional benefits and incentives to employees including gate agents even. These extra perks help in maintaining on-time departure and on-time arrival,and other performances goals.Consequently, In last 10 months, The airlines twice topped the list of best service providers.

Second, the author suggests that the company invest in new technology and in the set up of new plant. The author fails to consider that a new technology needs a skilled employees who, in turn, may ask for high incentives and additional packages and require additional training.Therefore, this course of action may unnecessarily increase the cost of product.For instance, Texla, a new manufacturer of battery cars,employed highly skilled employees and provided the intense training base to bring new product in market. Consequently,this strategy has increased the production cost and, in return, the cost of product in market.

Finally, the author does not lend a strong support for his actions. It may be possible that incentives provided by the company to labor pool are "one time incentives" knowns "variable pay". For example, Since the last decade. companies are offering variable pay instead of fixed pay to retain its employees. This course of action amounts only 12.2% of total compensation budget while fixed pay known as "increment in package" amounts 30% of total compensation budget.

In conclusion, the author's strategy was not persuasive. The author's assumption cut in incentives and invest in technology needs a strong support to be more effective.He needs to come up with the plan that must maintain the productivity level along with cost effectiveness.
Director
Joined: 29 Jun 2017
Posts: 929

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20 Mar 2018, 08:41
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

I DO NOT RATE THIS ESSAY BUT WRITE MY ESSAY so that we can compare.

the argument concludes that the company should not give generous benefits to its employee because the unemployment rate now is high and we still can keep talents without giving those benefits. This argument is not convincing because it assumes two important points.

First, it assumes that because the national unemployment rate is high, the unemployment rate in the company's industry is also high. This is quite wrong. It is quite possible that though the nation wide unemployment rate is high the unemployment rate in the Perks Company is still low. In my country ,Vietnam, for example, though the unemployment rate is high nation wide, that rate for softwear industry is very low and most engineers in this industry get a job. the companies in this industry have to go to the universities to compete for new graduates. The argument would be more convincing if it shows that the unemployment rate in the industry of the Perk company is also high.

Second, the argument also assumes that when the unemployment rate is high, it dose not need to offer generous benefits to its employee but still can keep talented employees. This assumption is not alway correct in fact. It is quite possible that even when unemployment rate is high, the talented employees can still leave Perks company to work for other companies. In fact, when unemployment rate is high, the unemployed persons are persons who are not qualified enough and the companies still have to compete for talented persons. In my country, even when the economy gose down and our unemployment rate is terribly high, the talented persons are still in need. The argument would be more sound if it provides the evidence that in the context of Perk company, when the unemployment rate is high, there are more talented persons who are out of job.

What I want to say is that the argument is not sound because it assumes some important points. If these assumptions are incorrect in fact, the argument falls apart. If the argument proves that these assumptions are correct in the context of the company Perks, the argument would be more convincing.

I WRITE THIS IN LESS THAN 30 MINUTES. i spend 5 minutes for planning what to write , 20 minutes for writing , and less than 5 minutes for reviewing and editting.

pls, comment on my writing and working. thanks
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