The Analysis exercise on a real life HR data

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Overview
General Challenge of firms in salary management policymaking: Year wise salary matrix needs justifications that should be rated. There are factors besides KPI, and the total effect seen over a long term would give rise to the need of some generalized objective function per employee and then rolled up to various levels in company hierarchy- How to manage these? What are the significant factors that affect salary change?

What are their relative importance values?

And many other specific questions
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Why is such a behaviour need to be known?

Knowing salary movement for a short term and trying to figure out short term predictions is not enough!
A Long term behaviour and value-predictions help long term budgeting and planning.
Salary is the most crucial component that changes every year and to manage the entire scheme is a big & full time job, But planning it many a years earlier and measure the running discrepancies and rectifying them is another serious research activity.

Objective treatment of Salary has become the problematic all along.

A general case study research for about a decade for a set of employees would be a respectable data set.

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Why is such a behaviour need to be known?

Our endeavour -> To propose an empirical schema obtained from the dataExemplifying that the normal conceptions of regularity in salary is failing and then to conceive of an idea for an objective salary function. [ A reasonable approach would be to capture ten years of data - very effective in traditional production companies where attrition is less but the salary increases per year are not insignificant] (but for want of data deal here with this data set of four consecutive years salary values for a technology company)

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The problematic within Salary management

Salary is individualbased, and yet groupings[dimensions] on the basis of

band, designation, department, skill-set etc do bring-in very interesting aspects for right decision making.

A level up in interest could be the salary hike justification with respect to the rating of an employee. Roll this metric up the hierarchy with different aggregations.
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Depiction 1 of the First Set Inference -Examples

This graph computes the total salary growth in four years scaled by the skill-set

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Depiction 2 of the First Set Inference

This is salary growth compared with respect to the first years salary scaled by the tenure of the employee

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Depiction 3 of the First Set Inference

This is the current salary status depicted by the age of the employee.

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Inference from the First Set

This three-in-a-set gives the general idea of which age-group, skill-set and retention sector has been valued by the company. 1. There is a high tendency for the company to get enstreamed in a particular direction and conscious effort to steer away from that direction or navigate the company either in another direction or to give it a generalist get-up. 2. What one diagram may not help in these creative decisions, a combination of depictions may come to aid.

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Depiction 1 of the Second Set Inference

Add to this another set of depictions that would measure the salary growth by various dimensions:

This one is quite interesting. The salary growth is weighed up by different skill sets and then they are measured against the ratings given to the employee performances. The depiction clearly shows that some very discerning skill set have received the same rating P4 in that might attract employees with other skill sets to flock, if that is a welcome issue is to be decided by the project and HR managers with fair consultation with the highest authorities, strategic management, finance and budgeting and planning department authorities.

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Depiction 2 of the Second Set Inference

The following ones are actually are to be judged in combination:

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Depiction 3 of the Second Set Inference

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Clearly some locations, some functions, some job family had been benefitted more than the others. These aspects might trigger different kind of decision making and those decisions need to get supported by this type of analysis. These are known analyses that are very essential, basic and most popular.

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Perquisites are a very important aspect within the salary or CTC [cost to company]. They need to be vetted against the salary and fathomed out which particular range are provided what kind of facilities and which kind need it most.

This is the band wise distribution and shows that some particular mode of provided-facility goes naturally with some band. These are food for further decision change.

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Advanced Analysis
The advanced analyses start with calculating the growth coefficients. We have devised a coefficient as the difference of salaries between the last and the first year and then divide it by the current salary. An alternative coefficient has also been used but could have very high significance is the average of the salaries by the current salary- the values would obviously differ but that is the job of the analyst who would like to see exactly a specific behaviour. The average of the salaries would be important for gross and macro considerations whereas the difference in salaries would focus down on the growth factor with respect to a reference years salary.
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Depiction 1 of the Third Set Inference

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Depiction 2 of the Third Set Inference

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Depiction 3 of the Third Set Inference

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Inference from the Third Set

This set of depictions show some negative values. This clearly shows that among the three years the salary growth did not have a monotonically increasing rate. One year had a high hike and the later years had lower hikes. This also shows that among the four years that kind of high increase only occurred once. Could and should we have captured data for a decade or more we might have seen more points of inflexion or more modal distribution in salary increase graph. In that kind of a scenario more the ups and downs would have been more would have been the volatility and one had to find the explanations from external sources like general economy, or general industrial scenario.

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A Creative Formula
The most interesting depiction has been calculated with a creative formula. We calculated the first differentials of the salaries of every employee between years, so we got 3 such first differentials out of the four years salary that are captured. Then we computed the differentials among the three, we call second differentials and still did not find a constant rate. We went up to the last that is the third differential too. We then compared the average of the second differential with respect to the third differential as per mathematics the average should have been three times the third differential- the graphs however says a different story- this immediately infers that the salary increment in any one

year as opposed to the others did not follow a well conceived pattern, there had been some passionate reasons or some exogenous reasons.
A differential analysis is an almost universally important method in fixed time varying analysis of a fact with respect to multi-dimensions. For huge number of actors in the data set[ in this case employees individual salary] one works smart in moving step wise down from a macro picture to a micro one.

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Conclusion:
These are some preliminary and fast analyses artefacts showing that an analyst can run her analysis on ad-hoc and flexibly alternative generating bases. A business analyst of the line of business is the best candidate for conceiving her own measurements and depict in dashboards or reports. Further mathematical calculations are always possible, say for example we have figured out a first order differentials, second and third order differentials, with a huge data one can easily set up an objective polynomial function and then in turns of incremental data can simulate the coefficients with error functions. These objective functions can be made to go through step wise regression analysis to figure out which dimensions are significantly effectively in the long term objective salary function. These functions can then be aggregated through ideal analytics [ the Z value] and a macro salary objective function can be obtained to have a normal benchmark for long term planning and budgeting purpose.
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