Solving Pay Equity Questions With Regression Analysis

By Charles Diamond and Rick Holt (November 9, 2017, 11:34 AM EST) -- Invariably, in the initial meeting before the start of a pay equity analysis, a client will inform us that it will be impossible to do a complete analysis because there are so many soft (nonquantitative or subjective) drivers of pay. The client will volunteer that the official pay matrix is just a starting point for determining pay. At this point, the discussion can get really sidetracked or even spin downward into futility. What good is a pay analysis if there are so many factors that are unable to be captured in a statistical model? The good news is that regression analysis, a central tool in pay analysis, is quite adequate in modeling the quantitative factors that drive pay but can also be used to understand and isolate nonquantitative factors, as we explain below....

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