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Y, a specialized software company that serves a large metropolitan area has been in business for the past several years. It currently has 140 service representatives on its payroll. It recently came to the notice of Mr. Johnson, a minority service rep of Easton Technology, that the salary of minority reps is considerably less than that of their white counterparts. This is despite the fact that the company claims to have been following a voluntary affirmative action program for the past two years. He and some other minority employees have threatened to take the case to Equal Employment Opportunity Commission (EEOC) and to file a case of racial discrimination in salaries against Easton Technology.
The company president is genuinely concerned and insists that Easton Technology does not discriminate against any body, and that it only rewards performance and loyalty. He does not want the excellent reputation of his company to be tarnished in a lawsuit. He has talked to the disgruntled employees and has requested them to be patient until he has done his own investigation into the matter. He has hired your group as his consultants to investigate the salary discrimination charge.
The President has put the employment and pay history data of the 140 service reps at your disposal. These data are contained in the Case 4 Data file. You will need to examine the employment and pay history data in this file in your attempt to resolve the discrimination charge brought forth by the minority employees.
Based upon your analysis and interpretation of the employment and salary data, write a comprehensive report to the company president summarizing your analysis and findings. You will also have to present your findings to the management group of the company and the representatives of the minority employees. Remember that your charge is to investigate and report if salary differences based on race exist in the company. The questions given on the next page will guide your thinking. Use important details from your analysis of the data to support your conclusion and recommendations. Remember the president of Easton Technology is not a statistician but otherwise can digest technical reports easily.
Data Description:
ID: Sequential ID number assigned to employees
PAYGRADE: Pay grade (=1, 2, or 3)
GENDER: 1, if female, 0, if male
RACE: 1, if white, 0, if minority
MARRIED: 1, if married, 0, if not married
AGE: Age in years at last birthday
TENURE: Number of years employed as a service representative by Easton Technology
RATING: Employee performance rating, on a 10-point scale; where 1 = poor
1. What is the difference between the average salary of minorities and non-minorities? Does this evidence support the claims of the Mr. Johnson?
2. What proportion of minority and non-minority employees are found in each pay grade? How do these proportions influence Mr. Johnson’s claim of salary discrimination? Do these proportional differences suggest discrimination in promotions across racial groups?
3. What is the average tenure of minority and non-minority employees in each pay grade? Do these results suggest discrimination in promotions across racial groups?
4. When was the company’s Affirmative Action program started? Does this information help explain why more minorities are in lower pay grades? Explain.
5. What data should be examined to see whether Easton Technology rewards performance and loyalty, as claimed by the company President?
6. What type of analyses would indicate if pay was dependent upon performance and loyalty? Do these results suggest that Easton Technology rewards performance and loyalty? Explain.
7. Do your analyses support Mr. Johnson’s allegation of discrimination? Briefly explain why the salary data suggest apparent discrimination and what will “remedy” this salary discrepancy? Could you explain salary differences in terms of factors other than race?
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