21. According to the statement, in order to ensure high productivity, companies ; m+ P5 k5 A- p6 p- T. H# T
should base their employees' salaries and job security solely on job performance, and
: ?$ ~! K, H/ A* x" Vnot on length of service to the company. I agree that salary increases and job security
: X0 B' f0 }3 U; xare powerful incentives to high achievement and should generally go to those who do 2 W+ ]& E( R* r1 `, }
the best work. However, to ensure employee productivity, companies must also reward
3 p+ O" w3 E6 y {; O3 Ptenured employees with cost-of-living raises—though not with job security.; J( s: @+ k9 Z7 @5 ?# n8 ]) k
On the one hand, rewarding average job performance with large pay increases or
1 \) U7 n$ s! \7 Q* bpromises of job security is a waste of resources—for two reasons. First, complacent 3 l) m4 R7 t. k3 L$ W
employees will see no reason to become more productive. Secondly, those normally # l3 ^' S, Y' I
inclined to high achievement may decide the effort isn't worthwhile when mediocre
% t$ o1 ~; k. Mefforts are amply compensated. Companies should, therefore, adjust their pay schedules
( ]" Q: F* [2 n2 Hso that the largest salaries go to the most productive employees.
/ b+ j0 i' x0 E9 u On the other hand, employees who perform their jobs satisfactorily should be
% P* Z$ l- I7 e) y0 I0 l% `0 e2 pgiven regular, though small, service-based pay increases—also for two reasons. First,
4 u% F1 C* ?8 }: N8 y( dthe cost of living is steadily rising, so on the principle of fair compensation alone, it is 6 L. p1 E8 b6 A# t$ l7 `
unjust to condemn loyal employees to de facto salary reductions by refusing them cost-8 J0 F( ]: o8 |. O9 m0 {9 y
of-living raises. Secondly, failure to adjust salaries to reflect the cost of living may be 3 s9 i M( Y7 b
counterproductive for the firm, which will have difficulty attracting and retaining good ) [: P _% j5 j. F9 Q' P1 d0 y
employees without such a policy.
( L; W0 W: H+ D$ d c! h. H5 Q In the final analysis, the statement correctly identifies job performance as the 8 i+ I/ O, s% S) u
single best criterion for salary and job security. However, the statement goes too far; it
+ d$ f5 I( u6 [* Oignores the fact that a cost-of-living salary increase for tenured employees not only
4 f* {* }7 Z, z2 S1 s R7 Yenhances loyalty and, in the end, productivity, but also is required by fairness. |