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This Chapter presents an overview of an exceptionally powerful statistical technique that can be applied to determine whether significant differences exist among applicant or employee groups. Specifically, Multiple Regression (MR) will be reviewed and then shown how it can be applied for evaluating employee compensation for the purpose of determining whether males or whites are compensated more highly than females or minorities due to reasons that are not legitimately job related.
Clearly, the practice of making simple comparisons between the average salary of males and females or whites and minority groups is inadequate for developing a complete understanding of whether or not evidence exists for discrimination. What is needed is a statistical tool that allows a researcher to compare the average salaries of various groups of employees while controlling for the legitimate job-related factors that are also influencing employee pay. MR is a statistical tool that allows practitioners to do exactly that. Because MR is such a powerful tool for finding differences in compensation that cannot be explained by legitimate job-related factors, it is the method of choice that has been used by the courts for decades, and has more recently been endorsed by the OFCCP.
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