G M A T GMAT - GMAT GMAT currency1“ GMAT fifl The following is part of a business plan being discussed at aboard meeting of the Perks Company:It is no longer cost-effective for the Perks Company tocontinue offering its employees a generous package of benefitsand incentives year after year. In periods when nationalunemployment rates are low, Perks may need to offer such apackage in order to attract and keep good employees, but sincenational unemployment rates are now high, Perks does not needto offer the same benefits and incentives. The money thus savedcould be better used to replace the existing plant machinery withmore technologically sophisticated equipment, or even to buildan additional plant.Discuss how well reasoned . etc.1. ” national unemployment rates are low mayneed to offer such a package in order to attract and keep goodemployees;national unemployment rates are high does not need tooffer the same benefits and incentives2. “ the cost-effectiveness of a wage policy isdetermined solely by whatever wages a market can currentlybear;The money saved could be better used to replace theexisting plant machinery with more technologically sophisticatedequipment, or even to build additional plant.1. (the conclusion):funds currently spent on theemployee benefits package should be redirected to eitherupgrade plant machinery or build an additional plant2. “ (the line of reasoning):It is no longercost-effective.National unemployment rates are low may need to offersuch a packageNational unemployment rates are now high does not needto offer the same benefits and incentives.The money saved could be better used to replace theexisting plant machinery with more technologically sophisticatedequipment, or even to build an additional plant.3. unconvincing/ weak/ defective/ problematic/questionable/ unsound.First/ To begin with,the author reasons thatnational unemployment rates are low may need to offersuch a package to attract and keep good employees;National unemployment rates are now high does not needto offer the same benefits and incentives. He relies on agratuitous/ an unwarranted assumption that nationalunemployment rates can represent the unemployment conditionin all industries, including the particular industry that Perks isinvolved in.But he doesn t provide any evidence to support it,Maybe Even Secondly/Moreover/In additionThe author assumes that1) the cost-effectiveness of a wage policy is determinedsolely by whatever wages a market can currently bear, but Forexample(the company should consider the possible results if itremoved the packages of benefits and incentives)2)the money saved could be better used to replace theexisting plant machinery with more technologically sophisticatedequipment, or even to build an additional plant, butMoreover,(cost and profit; a lot of money is needed) 1. In conclusion/To sum up, the author s argument isunconvincing/ weak/ defective/ problematic/ questionable/unsound.2. To support/ strengthen/ better evaluate the argument theauthor would have to1)represent/ representative;2)a more reasonableplan) GMAT The author of Perks Companys business plan recommendsthat funds currently spent on the employee benefits package beredirected to either upgrade plant machinery or build anadditional plant. The author reasons that offering employees agenerous package of benefits and incentives year after year is nolonger cost-effective given current high unemployment rates,and that Perks can attract and keep good employees withoutsuch benefits and incentives. While this argument has somemerit, its line of reasoning requires close examination.To begin with, the author relies on the reasoning that it isunnecessary to pay relatively high wages during periods of highunemployment because the market will supply many goodemployees at lower rates of pay. While this reasoning may besound in a general sense, the particular industry that Perks isinvolved in may not be representative of unemployment levelsgenerally. It is possible that relatively few unemployed peoplehave the type of qualifications that match job openings at Perks,if this is the case, the claim that it is easier now to attract goodemployees at lower wages is ill-founded.Secondly, the argument relies on the assumption that thecost-effectiveness of a wage policy is determined solely bywhatever wages a market can currently bear. This assumptionoverlooks the peripheral costs of reducing or eliminatingbenefits. For example, employee morale is likely to decline ifPerks eliminates benefits; as a result, some employees couldbecome less productive, and others might quit. Even if Perks canreadily replace those employees, training costs and lowerproductivity associated with high turnover may outweigh anyadvantages of redirecting funds to plant construction. Moreover,because the