case report

Questions

1. What is the difference between the average salary of minorities and non- minorities? Does this evidence support Mr. Johnson's claim of discrimination?

$530 difference between the average salary of minorities vs whites. This data alone would suggest that Mr. Johnson’s claim of discrimination is accurate. Initial argument was centered around 230$ difference but it ended up being a larger one

2. What proportion of minority and non-minority employees are found in each pay grade? How do these proportions influence Mr. Johnson's claim of salary discrimination? Do these proportional differences suggest discrimination in promotions across racial groups?

the average salary across pay grades by race does not have much of a difference. If they are equal across pay grade, why are they not equal overall?

Number of people across each pay grade:

There are a lot more whites in the promoted positions, and a lot more minorities in the lower positions. This may suggest discrimination when it comes to promoting employees. However, the company’s stance is that advancement and salary would be dependent on how well they did their jobs, and they could expect to move from Grade 1 to Grade 2 in two to three years, and to Grade 3 three to four years later. So how long have most minorities been at the company vs whites? And how have the average performance reviews differed? Are they kept at lower levels because of discrimination, or because of lower performance reviews? Are they getting lower performance reviews because of discrimation?

3. What is the average tenure of minority and non-minority employees in each pay grade? Do these results suggest discrimination in promotions across racial groups?

On average, whites have been working at the company longer than minorities. This could argue that there is not discrimination.

Minorites seem to be getting promoted faster than whites.

4. When was the company's Affirmative Action program started? Does this information help explain why more minorities are in the lower pay grades? Explain.

The affirmative action program started over two years ago. This would explain why more minorities were hired in recent years, so would currently be in lower pay grades.

5. What data should be examined to see whether Propter rewards performance and loyalty, as claimed by Mr. Greer?

Correlation between rating and net salary is .845. that is a high position correlation. Showing that salary is based on performance rating, as the company claims. This is shown in the graph:

6. What type of analyses would indicate if pay was dependent upon performance and loyalty? Do these results suggest that Propter rewards performance and loyalty? Explain.

7. Include in Results: Do your analyses support Mr. Johnson’s allegation of discrimination? Briefly explain why the salary data suggest apparent discrimination and what will "remedy" this salary discrepancy?

STEPS:

1. Identifying the business analysis questions

2. Converting business questions into statistical questions

3. Performing a descriptive analysis of the data

4. Applying formal analysis procedures

5. Developing conclusions and recommendations

6. Identifying unusual outcomes and future analysis

Sections:

· Executive Summary: 1-3 paragraphs, ** Last part written *** identify the problem, indicate your approach to solving it and concisely state conclusion

· Introduction: ~1 Paragraph, intro to the case, project scope.

· BODY: indicate how you developed your conclusions and recommendations

· Part 1: Begin with concise presentation of the question from the business perspective and explain how you conducted the analysis

· Part 2: Define the data set and specify the statistical procedures used

· Include specific statements of statistical models and hypothesis tests

· Results: Discuss the statistical results, indicating how they provide a solution to the case problem

· Include additional observations and extensions of your results

· Identify unusual outcomes, go into detail on the unexplored questions in the study (Questions for future work), might be important enough to justify another study.

· Document the additional questions and suggest how they might be answered and decide whether or not additional work should be taken

· Conclusion

· Introduction: Identifying the business analysis questions, Converting business questions into statistical questions

· Within Propter Inc, there have been several complaints by minority employees about notable salary differences compared to their white colleagues after viewing a salary memo. After learning about these concerns, Larry Greer, President of Propter, set up a meeting with the minority employees; where he explained that salary is formulated upon loyalty and performance to the company. However, Mr. Greer decided to investigate the discrimination claim further by hiring a task force.

When examining Mr. Johnson’s claim, it is understandable that Mr. Johnson has approached the head of the company over discrimiation concerns. Mr. Johnson brought forward this claim based on the average salary of whites vs minorities alone, and he is correct in that whites on average make a notable amount more than than minority workers. However, average salary alone is not enough to draw a conclusion in this case. Factors such as average pay grade, tenure, and performance scores must be looked at in order to determine what factors are truly contributing to a discrepancy between average salaries across race. These factors were examined and statistically analyzed to give further insight as to what could be causing this pay gap. Propter, Inc states that pay raises and position advancements are based on annual performance reviews and the amount of time an employee has been at the company. It is essential to investigate whether or not the company’s claimed stance on advancement is accurate.

· Body:

The difference between the average salary between whites and minorities at Propter, Inc is $530 monthly, with whites making an average of the higher salary. However, once the data is split up across pay grades, there no longer seems to be an inconsistency between salary across race. Table 1 shows the average salary of whites and minorites across each pay grade. The averages for each pay grade do not have notable differences.

Table 1:

The finding of average salary across pay grade is helpful, but it leads to the another question: if the salaries are equal across pay grade, why are they not equal overall? It was then looked at how many people in each race group belonged to each pay grade. The number of employees per pay grade is shown in Table 2:

Table 2:

The data in Table 2 shows that there are many more white employees in the higher pay grade, and many more minority employees in lower pay grades. This explains why the average salary across pay grade is more consistent between races than the overall average salaries. However, new concerns emerge. Why are there fewer minorities in higher positions? Could this be a result of discrimination? Propter, Inc states that pay raises and position advancements are based on annual performance reviews and the amount of time an employee has been at the company. For this case, it is essential to determine if the company adheres to this policy. The average tenure of whites at the company is 3.37 years, whereas the average tenure for minorities is 2.43 years. This information shows that whites have been at the company for an average longer amount of time than minorities. In addition, Propter Inc has implemented the affirmative action hiring program just over two years ago. This could explain why more minorities were hired in recent years, so would currently be in lower pay grades, as opposed to being due to discrimination.

In addition, Table 3 shows the average tenure across race per pay grade:

Table 3:

Based on this data, minorities have spent an average of less time in each pay grade, indicating that minorities are being promoted in less amount of time than their white counterparts.

When it comes to rewarding employee performance, the correlation between rating and net salary is .845. This is a high positive correlation, suggesting that the higher an employee’s rating, the higher the net salary is, this is shown in Graph 1.

Graph 1

Results:

· There is no discrimation based on race for salary

· Although there is a big difference between overall average salaries, when broken down by pay grade there was no noteworthy difference

· There are more whites in higher positions and minorities in lower positions, but when looking at tenure minorities have been at the company for less time than whites, which would explain why whites are in higher positions- the company says it takes a couple of years to be promoted

· In addition, Propter Inc has implemented the affirmative action hiring program just over two years ago. This could explain why more minorities were hired in recent years, so would currently be in lower pay grades, as opposed to being due to discrimination.

· This information shows that whites have been at the company for an average longer amount of time than minorities. Although this might look like discrimation, the company started affirmative action over two years ago, so it would make sense that minorities were hired in more recent years

· The high positive correlation between rating and salary-> this shows that Propter Inc goes by performance when it comes to salary raises

· This should be reassessed in a couple of years and see where minority salaries are

· We need info on at what point on average did minorites leave/get fired from the company. Because if they were fired before being able to be promoted it would skew the data to look like the minorities were being favored for promotion (Table 3)

Propter, Inc. Case Study

Introduction

Within Propter Inc, there have been several complaints by minority employees, such as Mr.Johnson, about notable salary differences compared to their white colleagues after viewing a salary memo. After learning about these concerns, Larry Greer, President of Propter, set up a meeting with the minority employees; where he explained that salary is formulated upon loyalty and performance to the company. However, Mr. Greer decided to investigate the discrimination claim further by hiring a task force.

When examining Mr. Johnson’s claim, it is understandable that Mr. Johnson has approached the head of the company over discrimiation concerns. Mr. Johnson brought forward this claim based on the average salary of whites vs minorities alone, and he is correct in that whites on average make a notable amount more than than minority workers. However, average salary alone is not enough to draw a conclusion in this case since many of the minority employees were hired within the last two years due to the affirmative action policy. Factors such as average pay grade, tenure, and performance scores must be looked at in order to determine what factors are truly contributing to a discrepancy between average salaries across race. These factors were examined and statistically analyzed to give further insight as to what could be causing this pay gap. Propter, Inc states that pay raises and position advancements are based on annual performance reviews and the amount of time an employee has been at the company. It is essential to investigate whether or not the company’s claimed stance on advancement is accurate.

Investigating Pay Histories

In order to understand Mr.Johnson's claims regarding the salary differences between minorities versus non-minorities, it is important to first calculate the average salary between each group. Through creating a Pivot table to understand the averages of the categorical data, we found that minority individuals make an average of 2820$ whereas non-minorities make an average of 3351$. The difference between the average salary between whites and minorities at Propter, Inc is $530, with whites making an average of the higher salary. However, once the data is split up across pay grades, there no longer seems to be an inconsistency between salary across race. Table 1 shows the average salary of whites and minorities across each pay grade. The averages for each pay grade do not have notable differences.

Result

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Executive Summary