Homework: Ch 7 Crunch the Numbers Exercise 2

Compensation professionals consult surveys of pay level and pay mix information. Such information helps them to ensure that the compensation system fulfills the company's strategic objectives and is competitive with market rates. Compensation surveys typically contain thousands of data points. It becomes necessary to use statistics to summarize the data in a meaningful way to aid in decision making.

A Set of Six Annual Pay Rates

35,250

30,200

50,200

46,900

26,150

25,000

Regression Equation that Describes the Compensation Pay Policy Line

	Y	=	a+bX
Where,	Y	=	predicted salary
	X	=	job evaluation points
	a	=	the Y intercept (This is the Y value at which X=0)
	b	=	the slope

a) The median value of the six salary figures is

b) The average value for the six salary figures is

If we assume the

y-intercept

is

$50,000

and the slope is

$15.60,

the predicted annual salary for a job that is worth

500

job evaluation points is