You work in the human resource office of a major cruise line that offers cruises in various locations around the world (the Caribbean, the Mediterranean, Asia, etc.). The CEO of your company has recently proposed that all employees in the corporate office (i.e., those employees who do not actually work on a ship) be offered free passage on your firm's cruises as a fringe benefit. The CEO has asked for your thoughts on this proposal.

1. If this proposal is adopted, what will happen, if anything, to employee salaries? Why?

2. What are the advantages and disadvantages of this proposal? What factors should be considered when evaluating the proposal?