Admittedly the vice president�s reasoning linking employee benefits with company profits seems reasonable on its face. Companies that are not profitable are ill-advised to take on additional costs such as increased employee benefits. However, the fact that Nostrum�s profits last year were lower than the preceding year does not imply that Nostrum is experiencing financial difficulties that preclude it from increasing employee benefits at this time. Perhaps the previous year�s profits were extremely large; whereas last year�s profits, albeit lower, were sufficient to fund an increase in the benefits package without threatening the company�s bottom line.

Also, the fact that Nostrum�s chief competitor provides lower benefits to its employees is not a good reason for Nostrum to deny an increase to its employees. Employee loyalty is an important asset to any company, and providing good pay and good benefits are among the best ways to acquire it. Nostrum would be well advised to assure that its employees have little reason to seek employment elsewhere, and especially from its chief competitor.

Finally, one can infer from the survey�s results that a full one-third of the respondents may have viewed the current benefits package unfavorably. If so, such widespread satisfaction would weaken the vice president�s argument. Lacking more specific information about how these other employees responded, it is impossible to assess the reliability of the survey�s results or to make an informed recommendation.

In conclusion the vice president�s argument against implementing a benefits increase is unconvincing. To strengthen the argument, he must provide evidence that the increase in benefits would have a negative impact on the company�s overall profitability. Additionally, he must provide more information about the manner in which the survey was conducted before we can determine the degree of employee satisfaction of the current benefits