A company is trying to show that their wages are fair. The mean salary is $45,000 but the median is $67,000. Which should they use for their position?
The mean is more influenced by deviant scores, so this distribution is negatively skewed (pulled out to the left or lower end). With a skewed distribution, the median (50 percentile) is the best measure of central tendency, since of the three (mean, mode, median), it will typically be the most central.
Who are earning those extremely low wages that are skewing the distribution?
haha, beats me, but I would not want to work there!
To determine which measure of central tendency (mean or median) the company should use to illustrate the fairness of their wages, let's break down what each measure represents:
1. Mean: The mean, also known as the average, is calculated by summing up all the values in a dataset and dividing it by the number of values. It is sensitive to extreme values and can be influenced by outliers.
2. Median: The median is the middle value that separates the dataset into two equal halves when arranged in ascending or descending order. It is not influenced by extreme values or outliers and provides a measure of the center of the dataset.
Now, let's consider the scenario at hand. If the mean salary is $45,000, it suggests that the sum of all the wages divided by the number of employees results in an average of $45,000.
On the other hand, if the median salary is $67,000, it means that the middle value, when the salaries are arranged in order, is $67,000.
The company's choice should depend on the context. If the company wants to emphasize the typical salary for their positions without being influenced by extremely high or low salaries, they should use the median. This is because the median is not skewed by outliers, providing a more representative measure for the typical wage.
However, if the company wants to showcase the overall average salary, including the impact of all wages, they may choose to use the mean. This is particularly useful when the concern is with the overall allocation of resources or total compensation.
In summary, if the company wishes to demonstrate fairness in terms of the typical wage, they should use the median salary of $67,000.