Introduction

Excel Tutorial: Regression Prediction

Research Question: What should this job pay?

Application: To determine how much a job should pay, organizations try to achieve
two goals: internal equity and external competitiveness. Internal equity means paying
people doing different jobs differently based on what they do, so that people doing
"more difficult" jobs (however that is defined) will get paid more than people doing
"less difficult" jobs. External competitiveness means paying people based on the
market rates for a job, so that satisfactory performers are paid what other people in
other organizations are being paid for the same job. One method of assigning numbers
to jobs based on how "difficult" they are is the point method, and a simplified version
is used in this example. The market rate for jobs is based on salary survey data.

Data: Job Evaluation Total is the job evaluation point total indicating how "difficult" the
job is, with higher numbers indicating greater "difficulty". Salary Survey is the the
salary paid to each job at that organization. Do your analyses on this worksheet.

Task: Use the Data Analysis Tool Regression to get the Multiple correlation between
the Job Evaluation Total and Salary. Then use the regression equation to determine
how much each of the five jobs should be paid:
Predicted Salary=JobEvaluationTotal*JobEvaluationCoefficient+Intercept
For the Department Chair and Dean, use these Job Evaluation Point Totals:
Department Chair = 100
Dean = 200

Steps:
1. Click on the Data worksheet tab at the bottom of the spreadsheet.
2. From the Tools menu, select Data Analysis.
3. From the Analysis Tools menu, select Regression.
4. Click in the Input Y Range box, then select cells D1 to D49.
5. Click in the Input X Range box, then select cells C1 to C49.
6. Click in the labels box, because the input ranges contain the labels to make the output easier to read.
7. Click in the Output Range circle, then click in Output Range box, then select cell F1.
8. Leave the rest of the output options unchecked, and click on OK.
9. Select columns F to N, then from the Format menu select Column and AutoFit Selection, to make the output easier to read.
10. You may look at the Screen_Capture worksheet to check your work.
11. Write a formula to calculate Predicted Salary for each of the five jobs: Assistant Professor, Associate Professor, Full Professor,
Department Chair, and Dean. The Job Evaluation Point Totals for Department Chair and Dean are given above.

Conclusion: The predicted salaries for the five jobs are based on the job evaluation
(internal equity) and the salary survey data (external competitiveness).

Page 1
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.7577128855
R Square 0.5741288168
Adjusted R Square 0.5648707476
Standard Error 6717.800928
Observations 48

ANOVA
df SS MS F Significance F
Regression 1 2798615164.62 2.8E+09 62.01388 4.52E-10
Residual 46 2075927068.19 45128849
Total 47 4874542232.81

Coefficients Standard Error t Stat P-value Lower 95%Upper 95%

Lower 95.0%
Intercept 28777.801339 2406.70048438 11.95737 1.03E-15 23933.36 33622.24 23933.36
X Variable 1 306.11049107 38.871719534 7.874889 4.52E-10 227.8658 384.3552 227.8658

RESIDUAL OUTPUT

Observation Predicted Y ResidualsStandard Residuals

1 56327.745536 -7727.74553571 -1.162775
2 44083.325893 -4083.32589286 -0.614408
3 37961.116071 -3061.11607143 -0.460599
4 56327.745536 -7027.74553571 -1.057448
5 44083.325893 -2583.32589286 -0.388707
6 37961.116071 -2361.11607143 -0.355271
7 56327.745536 16772.2544643 2.52368
8 44083.325893 11716.6741071 1.762979
9 37961.116071 6638.88392857 0.998937
10 56327.745536 -3227.74553571 -0.485671
11 44083.325893 2616.67410714 0.393725
12 37961.116071 438.883928571 0.066038
13 56327.745536 -6027.74553571 -0.90698
14 44083.325893 -1583.32589286 -0.238239
15 37961.116071 -3761.11607143 -0.565926
16 56327.745536 1072.25446429 0.16134
17 44083.325893 -1083.32589286 -0.163005
18 37961.116071 -61.1160714286 -0.009196
19 56327.745536 272.254464286 0.040965
20 44083.325893 2516.67410714 0.378678
21 37961.116071 938.883928571 0.141272
22 56327.745536 4872.25446429 0.733116
23 44083.325893 -1583.32589286 -0.238239
24 37961.116071 -5161.11607143 -0.776581
25 56327.745536 20672.2544643 3.110504
26 44083.325893 13816.6741071 2.078961
27 37961.116071 7038.88392857 1.059124
28 56327.745536 -3927.74553571 -0.590998
29 44083.325893 -1183.32589286 -0.178052
30 37961.116071 -761.116071429 -0.114523
31 56327.745536 -15527.7455357 -2.336422
32 44083.325893 -7483.32589286 -1.125998
33 37961.116071 -5961.11607143 -0.896955
34 56327.745536 -13627.7455357 -2.050534
35 44083.325893 -7283.32589286 -1.095904
36 37961.116071 -2861.11607143 -0.430505
37 56327.745536 -127.745535714 -0.019222
38 44083.325893 1716.67410714 0.258304
39 37961.116071 1038.88392857 0.156318
40 56327.745536 1772.25446429 0.266667
41 44083.325893 1016.67410714 0.152976
42 37961.116071 -61.1160714286 -0.009196
43 56327.745536 1272.25446429 0.191433
44 44083.325893 2516.67410714 0.378678
45 37961.116071 -661.116071429 -0.099477
46 56327.745536 6527.25446429 0.98214
47 44083.325893 2916.67410714 0.438865
48 37961.116071 638.883928571 0.096131
Upper 95.0%
33622.24
384.3552
 Data

Minnesota IIB Colleges Job Job Evaluation Total Salary Survey

Augsburg College Full Professor 90 $48,600
Associate Professor 50 $40,000
Assistant Professor 30 $34,900
Bethel College Full Professor 90 $49,300
Associate Professor 50 $41,500
Assistant Professor 30 $35,600
Carleton College Full Professor 90 $73,100
Associate Professor 50 $55,800
Assistant Professor 30 $44,600
College of Saint Benedict Full Professor 90 $53,100
Associate Professor 50 $46,700
Assistant Professor 30 $38,400
College of Saint Catherine Full Professor 90 $50,300
Associate Professor 50 $42,500
Assistant Professor 30 $34,200
Corcordia College-Moorhead Full Professor 90 $57,400
Associate Professor 50 $43,000
Assistant Professor 30 $37,900
Gustavus Adolphus College Full Professor 90 $56,600
Associate Professor 50 $46,600
Assistant Professor 30 $38,900
Hamline University Full Professor 90 $61,200
Associate Professor 50 $42,500
Assistant Professor 30 $32,800
Macalaster College Full Professor 90 $77,000
Associate Professor 50 $57,900
Assistant Professor 30 $45,000
Moorhead State University Full Professor 90 $52,400
Associate Professor 50 $42,900
Assistant Professor 30 $37,200
North Central Bible College Full Professor 90 $40,800
Associate Professor 50 $36,600
Assistant Professor 30 $32,000
Northwestern College Full Professor 90 $42,700
Associate Professor 50 $36,800
Assistant Professor 30 $35,100
Southwest State University Full Professor 90 $56,200
Associate Professor 50 $45,800
Assistant Professor 30 $39,000
St. John's University Full Professor 90 $58,100
Associate Professor 50 $45,100
Assistant Professor 30 $37,900
St. Olaf College Full Professor 90 $57,600
Associate Professor 50 $46,600
Assistant Professor 30 $37,300
University of Minnesota-Morris Full Professor 90 $62,855
Associate Professor 50 $47,000
Assistant Professor 30 $38,600

Page 5
 Data

Source: 1997-1998 Faculty Salaries (Academe, March/April 1998) y = 306.11x + 28778

Jakarta
2,200,000
Grade

PC Rp
40 2,200,000
60 30,000,000

Page 6
 Data

Regression output
Factor Coef Std Error
Constant 28777.801 2406.700
Job Evaluation 306.110 38.872

R Squared 0.574
Adj R Sq 0.565
F Value 62.014

y=bx+c
y
b 306.110
c 28777.801 Mid Salary
Prof 90 56,328
Asst 30 37,961
Associate 50 44,083
Dean 200 90,000
Chair 100 59,389

Grade Min Mid Max

5 72,000 90,000 108,000
4 47,511 59,389 71,267
3 45,062 56,328 67,593
2 35,267 44,083 52,900
1 30,369 37,961 45,553
$90,000

$80,000

Mr X 50,000$70,000
Grade 5 RSP ? $60,000 56% underpaid
Respective Salary Position
f(x) = 306.110491071429 x + 28777.8013392857
compa ratio $50,000 R² = 0.574128816811132
$40,000
Mr Y 120,000 133% overpaid
$30,000
Mr Z 100,000 111% in paid
$20,000
$10,000
$0
20 30 40 50 60 70 80 90 100

Page 7
 Data

06.11x + 28778

b 306.11
c 28778

100 59,389
200 90,000
Range Spread 30%

Salary Structure
POINT JE Min Mid Max
30 33010 37,961 42913
50 38333 44,084 49834
90 48981 56,328 63675
100 51643 59,389 67135
200 78261 90,000 101739

PC Min Mid Max

40 1,347,826 1,550,000 1,752,174
41 1,860,000
42 2,232,000
43 2,678,400
44 3,214,080
45 3,856,896
46 4,628,275
47 5,553,930
48 6,664,716
49 7,997,660
50 9,597,191
51 11,516,630
52 13,819,956
53 16,583,947
54 19,900,736
55 23,880,883
56 28,657,060
57 34,388,472
58 41,266,167
59 49,519,400
60 59,423,280

65

Page 8
 Data

Regression output
t stat p Value
11.957 0.000
7.875 0.000

Std Error 6717.801

SS reg 2798615164.621
SS resid 2075927068.192

491071429 x + 28777.8013392857
816811132 Column D
Linear (Column D)

50 60 70 80 90 100

Page 9
 Data

y = 1,390,000.00x - 53,400,000.00

b 1,390,000.00
c -53,400,000.00

rangespread 30%
midpoint progress 20%

Page 10
 Scatter Chart (PC vs Rp)
31000000

f(x) = 1390000 x − 53400000

R² = 1
26000000

21000000

16000000
Rp

11000000

6000000

1000000
35 40 45 50 55 60 65

PC
 Regression output
Factor Coef Std Error t stat p Value
Constant 28777.801 2406.700 11.957 0.000
Job Evaluation Total 306.110 38.872 7.875 0.000

R Squared 0.574 Std Error 6717.801

Adj R Sq 0.565 SS reg 2798615164.621
F Value 62.014 SS resid 2075927068.192

Y=bx + c
b 306.110
c 28777.801 poin min mid
dean 200 90,000
chairman 100 59,389
full professor 90
associate 50
assisstant 30
max
 Regression output
Factor Coef Std Error t stat p Value
Constant 28777.801 2406.700 11.957 0.000
Job Evaluation Total 306.110 38.872 7.875 0.000

R Squared 0.574 Std Error 6717.801

Adj R Sq 0.565 SS reg 2798615164.621
F Value 62.014 SS resid 2075927068.192
 Results

Minnesota IIB Colleges Job Job Evaluation Total Salary Survey SUMMARY OUTPUT
Augsburg College Full Professor 90 $48,600
Associate Professor 50 $40,000 Regression Statistics
Assistant Professor 30 $34,900 Multiple R 0.7577128855
Bethel College Full Professor 90 $49,300 R Square 0.5741288168
Associate Professor 50 $41,500 Adjusted R Square 0.5648707476
Assistant Professor 30 $35,600 Standard Error 6717.800928
Carleton College Full Professor 90 $73,100 Observations 48
Associate Professor 50 $55,800
Assistant Professor 30 $44,600 ANOVA
College of Saint Benedict Full Professor 90 $53,100 df SS MS F Significance F
Associate Professor 50 $46,700 Regression 1 2798615164.62 2798615165 62.013882638 4.5249725E-10
Assistant Professor 30 $38,400 Residual 46 2075927068.19 45128849.309
College of Saint Catherine Full Professor 90 $50,300 Total 47 4874542232.81
Associate Professor 50 $42,500
Assistant Professor 30 $34,200 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Corcordia College-Moorhead Full Professor 90 $57,400 Intercept 28777.801339 2406.70048438 11.957367161 1.027647E-15 23933.3691592 33622.233519 23933.369159 33622.233519
Associate Professor 50 $43,000 Job Evaluation Total 306.11049107 38.871719534 7.8748893731 4.524973E-10 227.865852725 384.35512942 227.86585273 384.35512942
Assistant Professor 30 $37,900
Gustavus Adolphus College Full Professor 90 $56,600
Associate Professor 50 $46,600 Position Job Value Salary
Assistant Professor 30 $38,900 Assistant Professor 30 $37,961
Hamline University Full Professor 90 $61,200 Associate Professor 50 $44,083
Associate Professor 50 $42,500 Full Professor 90 $56,328
Assistant Professor 30 $32,800 Department Chair 100 $59,389
Macalaster College Full Professor 90 $77,000 Dean 200 $90,000
Associate Professor 50 $57,900
Assistant Professor 30 $45,000
Moorhead State University Full Professor 90 $52,400
Associate Professor 50 $42,900
Assistant Professor 30 $37,200
North Central Bible College Full Professor 90 $40,800
Associate Professor 50 $36,600
Assistant Professor 30 $32,000
Northwestern College Full Professor 90 $42,700
Associate Professor 50 $36,800
Assistant Professor 30 $35,100
Southwest State University Full Professor 90 $56,200
Associate Professor 50 $45,800
Assistant Professor 30 $39,000
St. John's University Full Professor 90 $58,100
Associate Professor 50 $45,100
Assistant Professor 30 $37,900
St. Olaf College Full Professor 90 $57,600
Associate Professor 50 $46,600
Assistant Professor 30 $37,300
University of Minnesota-Morris Full Professor 90 $62,855
Associate Professor 50 $47,000
Assistant Professor 30 $38,600

Source: 1996-1997 Faculty Salaries (Academe, March/April 1997)

Page 15
 Regression output
Factor Coef Std Error t stat p Value
Constant 28777.801 2406.700 11.957 0.000
Job Evaluation Total 306.110 38.872 7.875 0.000

R Squared 0.574 Std Error 6717.801

Adj R Sq 0.565 SS reg 2798615164.621
F Value 62.014 SS resid 2075927068.192
 Scatter Chart (Job Evaluation Total vs Salary Survey)
$80,000.00

$75,000.00

$70,000.00

$65,000.00

$60,000.00
Salary Survey

$55,000.00 f(x) = 306.110491071429 x + 28777.8013392857

R² = 0.574128816811132
$50,000.00

$45,000.00

$40,000.00

$35,000.00

$30,000.00
20 30 40 50 60 70 80 90 100

Job Evaluation Total

Screen_Capture

Page 18