Question

Writing Assigment :

2. Consider the situation involving the employees of a particular company looking for a raise. The company pays its president $300,000. The vice-president gets paid $204,000. The foreman earns $50,000. The reaming 40 workers earn an average (mean) of approximately $37,000. All salaries are annually based.

a. The union representative wants to negotiate new wages for the 40 workers of the company. In the negotiation should the representative emphasize the mean, median or mode of the 40 employees? Which one would most help their case? Explain your answer.

b. The company’s attorney is also part of the negotiations. Which of the three measures would the attorney stress in the negotiations to help their case? Explain your answer.

c. An independent analyst is hired to offer counsel in the matter. If you are the independent analyst which of the three measures of Central Tendency would you recommend? Explain your answer with at least one reason as evidence.

Answer 1

a)A union representative, would want the highest salary to all with lesser variation in the salaries.

The median does not get affected by outliers in the data.

Thus it can assure the representative that all 40 employees will get an increase in salary, although the amount may differ.

But the middle number of the data will be a desired amount that works well with the needs of the employees.

b) The company's attorney would try and justify paying the workers the same amount of total money for the company.

In this case, the company pays, 37000 x 40 = 1.48 million.

The company can easily increase the pay of the best performing out of the 40 employees substanatially, this would help increase the mean from 37000 to a greater amount.

So, by only a slight increase in expenses, the company can justify an increase in average income for the employees.

c) As a neutral analyst, I would recommend using median.

This is becasue, as we can see in the example, the company has a huge variation in its pay structure, with vice presidents and presidents paid 204,000 and 300,000 as compared to an average of 37,000.

Since, the mean can be easily manipulated, having a strong median salary that would ensure a fair number for all 40 employees should be decided upon.