Using Multiple Regression to Examine Compensation Practices (Overview)
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Transcript of Using Multiple Regression to Examine Compensation Practices (Overview)
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Using Multiple Regression Analysis to
Examine Compensation Practices
BCGi: Adverse Impact & Test Validation Book Series
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Multiple Regression and Pay Analysis
• Multiple Regression (MR) is a robust statistical method that can
effectively determine whether potential pay discrimination exists
in a given job or group of jobs
• MR is able to make this determination by statistically controlling
for differences in job qualification factors that may exist between
groups, then evaluating the “leftover” pay difference for
statistical significance
• MR has long been the tool of choice in audit and litigation
settings
• Most employers can readily conduct a MR analysis within just
hours after compiling data
www.BCGinstitute.org
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Why is this Topic Important to HR/EEO Professionals?
• Why do I need to know about this topic? – If you work in a mid- to large-sized employer, it is not uncommon to find
statistical evidence of unfair pay practices
– Federal enforcement agencies have created a lot of attention over fair pay issues, and the stakes are high (for federal contractors especially)
– Compensation issues have a long history in the courts and the tools for evaluating the issues are well established
• What are the key essentials I need to know about this topic? – Conducting a pay analysis does not take long with the correct tools
– Data selection and setup are key
– There are a variety of methods for making corrective pay actions; selecting the best one based on your situation takes serious evaluation
• What are the consequences surrounding these issues? – Being reactive v. proactive can be 10X more expensive
– MR analyses are easy to do incorrectly
– Taking actions to make “corrective pay” based on weak regression (or other analyses) can lead to just as much liability as finding clear pay discrimination evidence
www.BCGinstitute.org
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Presentation Overview
• Overview & Background
• How Does Multiple Regression (MR) Work?
• Steps for Conducting Multiple Regression (MR)
Analysis
• Final Recommendations
www.BCGinstitute.org
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Resources
• Adverse Impact and Test Validation: A Practitioner's Handbook by Daniel A. Biddle, Ph.D.
– Purchase online at www.BCGinstitute.org
• Adverse Impact and Test Validation Book Series Webinars
– Recordings available online for all BCGi Platinum Members
– Webinar slides available online to all BCGi Standard & Platinum
Members
• BCGi Membership
– Free Standard Membership
– Premium Platinum Membership
www.BCGinstitute.org
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About Our Sponsor: Biddle Consulting Group (BCG)
BCG is an HR firm dedicated to providing the highest products and services related to
Equal Employment Opportunity (EEO), Affirmative Action and Employee Selection.
• BCG’s Consulting Services
― Affirmative Action Plan Outsourcing
― Compensation Analysis
― EEO/AA Litigation Support (Plaintiff and Defendant)
― Job Analysis
― Test Development and Test Validation
• BCG’s Software Products
― Adverse Impact Toolkit™
― AutoAAP® affirmative action plan development software
― AutoGOJA® job analysis software
― C4 call center testing software
― COMPARE™ compensation analysis software
― CritiCall® dispatcher/call-taker personnel selection software
― ENCOUNTER soft skills video situational judgment testing software
― OPAC® office skills testing software
― TVAP™ Test Validation & Analysis Program software
www.Biddle.com