Where I work falls under state budgeting which means two things, everyone is underpaid and everyone’s salary is public information. While everyone is underpaid, some of us are more underpaid than others. So with budget planning beginning, I am going to my boss to justify a raise. Here is where is the second part of my first statement comes into play. It is fairly simple to setup statistical models to show how underpaid you are.
The model I am taking to my boss is a fairly simple one. Salary = Worth + Years Worked * Annual Raise. Here Worth is pretty much the intercept of the graph and represents how much each person is worth in relation to one another with Seniority factored out. A fairly simple model but somewhere to start and I also only included people in the pool with my job or similar. No point in comparing my salary to the directors’ salaries. Some reading about multiple regression: Intro to Regression and Multiple Regression.
Here is how I did this in Excel 2007. You’ll need the Data Analyzer plug-in installed. First you’ll need 3 columns of data - Pay, Years Worked and optionally Name. Go to Data Analysis -> Regression and select OK. Here you select your Y Range (Salary Column) and X Range (Years Worked). When selecting options, make sure you have Line Fit Plots also selected. This generates a histogram (wherever you specified your output range). The X-axis will be Years Worked with 2 columns for each data variable. One is Pay and the other is Predicted Pay. You’ll need to match up according to the correct Seniority values but you get the basic gist. If there are any math/stats wonks who would like to add input to this; I would love to hear it.

Sunday, January 21st, 2007 @ 6:09 pm Math, Money
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