Pay Equity Commission :: The Space Toy Co. Case Study :: PV - How to use your computer to do Regression Analysis

STC produced PV job rates using the free-hand method, as shown previously, but chose to verify these results and construct a job rate line by using a computer and a statistical method called regression analysis.

Entering data to create a line

STC followed a series of steps to produce PV job rates using regression. Each step is summarized below. Please refer to your computer's "Help" section on regression analysis if you need further clarification on using this program.

An interactive exercise

Once you've read the step-by-step process below and know how a regression line is developed, you can create one yourself by using the interactive worksheet on the next page.

But first, take the time to learn how to create a PV line, step-by-step.

Step 1 - Enter the male job data

The first step in producing PV job rates is to enter the representative male job classes, job values and job rates data. STC entered the following:

Chart # 12

Male Job Class Data
Representative Male Job Classes	Job Values	Job Rates
Sales Representative	561	26.00
Financial Analyst	540	24.00
Service/Systems Technician	458	21.00

Step 2 - Apply the formula to the male job data

The statistical formula was then applied to the male job data and the computer program provided the regression output, as shown below.

Chart # 13

Regression Output

Intercept (constant)		0.188984
Std Err of Y Est		0.75658
R Squared		0.95469
No. of Observations		3
Degree of Freedom		1
X Coefficient (slope)		0.045178
Std Err of Coef.		0.009842

An R-Squared of 0.95469, or 95%, indicates a line of good fit. STC initially tried to create a line using more data, but found that the representative group of 3 male jobs used in this example produced better results.

Step 3 - Enter the female job data

The next set of data to enter is the list of unmatched female job classes, with their job values and job rates. STC entered the following:

Chart # 14

Female Job Class Data
Female Job Classes	Job Values	Job Rates
Customer Service Clerk	391	17.00
Accounting Clerk	330	16.00
Receptionist/Typist	282	15.00

Step 4 - Apply the formula to the female job data

Adjustments were identified by applying the formula from the above calculation to the three unmatched female job classes. These are the final regression calculations and PV job rate results:

Chart # 15

PV Job Rate Results for Unmatched Female Job Classes
Unmatched Female Job Classes	Job Values	Job Rates	PV Rate	Adjustment
Customer Service Clerk	391	17.00	17.853719	0.85
Accounting Clerk	330	16.00	15.09784	nil
Receptionist/Typist	282	15.00	12.929279	nil

One job rate needed to be adjusted - that of the Customer Service Clerk. The other two female job classes had job rates higher than the PV rate, therefore they did not require a pay equity adjustment.

Go interactive

Now you know how to produce a regression line, you can create one yourself by using the interactive worksheet on the next page. This interactive page will work only if you have enabled JavaScript. Otherwise, you can go to our non-interactive page, print it, and follow the directions for manual calculations.

How to Use Your Computerto do Regression Analysis