B4. The following appeared in a memorandum from the CEO of a consumer electronics manufacturing firm to the head of the company's human resources department, who is responsible for hiring new employees: “Eight years ago, our firm’s profits were increasing with each new employee we added. We discovered that each employee had the skills and motivation to generate more revenue for the firm than his or her salary cost us. However, for the past two years, our profit margin has been falling, even though we have continued to add employees. Thus, our newer employees are not generating enough revenue to justify their salaries. We must not be hiring new employees with the same level of skills and motivation as those we used to attract. Clearly, then, failures in the human resources department account for our falling profits.”
Firstly, the solution to the problem, mentioned in the article, rests on an oversimplified analysis of the issue. The author commits “after this, therefore, because of this” reasoning. The line of the reasoning is that because recruitment of new employees occurred before the success or failure of the firm, the former event is responsible for the latter. But this is fallacious reasoning unless all other prospective causes of the changes in the firm have been considered and ruled out. For example, perhaps the main products of the firm took up most of the markets several years ago but lost the competitive edge in the past two years; or perhaps recently the costs of materials were much higher then before, squeezing the profits a lot. Therefore any reason aimed at addressing the problems of firm must be based on more thorough investigation to gather sufficient data , in order to narrow down and locate the actual cause of the problem.
Secondly, the author commits the fallacy of “all things are equal”. The fact that happened two years ago is not a sound evidence to draw a conclusion that the firm should not hire new employees. The author assumes without justification that the background conditions have remained the same at different times or at different locations. Given that the firm always needs large number of employees to enlarge the sale market, so without the employees who equip the qualities of high level of skills and motivation, the firm would commit larger lost; or that the firm recently recovered the market, leading to the increased need of the staff to make up the lost in the profits previously. Thus it is impossible to conclude without the evidence that whether the current conditions are the same as the conditions used to be two years ago. |