Compensation professionals in the XYZ Company use regression analysis to determine the pay rates of its marketing professionals.There are 4 different marketing job titles in the XYZ Company.Compensation professionals use job evaluation points assigned to each marketing job title and a salary survey data.In other words,they regress job evaluation points on the salary data to indicate the amount of variation in market pay rates that can be explained by a company's job structure.Which of the following best describes this amount of variation when the R2 value turns out to be 0.85?
A)All of the variation in market pay
B)None of the variation in market pay
C)A large amount of the variation in market pay
D)A small amount of the variation in market pay

Question

Quizplus · Accepted Answer

When the R2 value is 0.85, it means that 85% of the variation in market pay rates can be explained by the company's job structure. Therefore, a large amount of the variation in market pay can be explained by the job evaluation points assigned to each marketing job title and the salary survey data.

Compensation Professionals in the XYZ Company Use Regression Analysis to Determine