unjust to condemn loyal employees to de facto salary reductions by refusing them cost-
of-living raises. Secondly, failure to adjust salaries to reflect the cost of living may be
counterproductive for the firm, which will have difficulty attracting and retaining good
employees without such a policy.
In the final analysis, the statement correctly identifies job performance as the
single best criterion for salary and job security. However, the statement goes too far; it
ignores the fact that a cost-of-living salary increase for tenured employees not only
enhances loyalty and, in the end, productivity, but also is required by fairness.
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