Regression Analysis Used in Compensation Administration

Examples of Distributions

Q. Would you expect executive salaries to have a skewed distribution?

A. Yes, for example, the graph below might represent Controllers' salaries for companies with $100 million in revenue.

Frequency distributions

Given the following:

CEO SALARIES*

Organization Revenues ($100,000,000)
Industry (Software)

U.S. DOLLARS MEN WOMEN
$100,000 - $150,000 32 13
$150,000 - $200,000 28 28
$200,000 - $250,000 10 46

*The numbers used are for illustration purposes only.

Q. In what other frequency distributions might the above salary data be useful?

A. A human resources director might also be interested in frequency distributions by race or by age.

Practice question for frequency distributions

Draw a frequency table for the following data, using a range of 5 for classification.

28.3
7.2
12
12.5
14
9.6
30
32.5
28
22.9
28
16.7
28
20
24.2
 

Use the upper limit of the frequency class to determine which class to place each number in. For example, the number 4 would go into the frequency class of 0 - 4. However, the number 4.2 would go into the class of 4 - 8.

Frequency table for the data given in categories by increments of 4:

FREQUENCY CLASSES COUNT
0 - 4 0
4 - 8 1
8 - 12 2
12 - 16 2
16 - 20 2
20 - 24 1
24 - 28 4
28 - 32 2
32 - 36 1
36 - 40 0

Corresponding frequency distribution - frequency class on the Y axis, data on the X axis.

Memory Jogger

Given the following, select the correct statement.

CEO SALARIES*

Organization Revenues: $100,000,000

U.S. DOLLARS CEOs
$300,000 - $450,000 20
$450,000 - $600,000 14
$600,000 - $750,000 9

*The numbers used are for illustration purposes only.

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