The regression output will also show information about how good the regression line fits the data. Specifically, look at the R squared in the regression output. Generally, the R squared, referred to as variance explained, should be .95 or higher. If R squared is significantly lower than this, there may be problems stemming from the job evaluation step. For example, the points assigned to certain benchmark jobs may be off i.e., not make sense given the level of tasks, duties and responsibilities required for the job and the knowledge, skills and abilities needed by the job incumbent. If this is the case, re-examine the job descriptions and reconsider the points assigned to the benchmark jobs. Alternatively, there may be errors in the weighted average calculations. After conducting the regression again, examine the new R squared. Task E: What is your R squared (variance explained)? Is it sufficient to proceed?

How to handle outliers 1. Green Circle Employees-those that fall below the range. Option 3: Market \& Performance-based Pay 2. Red Circle Employees-those that are paid above the range Option A: Do Nothing Option B: Set Increases by Position in Range Option C: Freeze Base Pay and Offer Performance-based Bonuses Option D: Freeze Base Pay Option E: Decrease Base Pay A constant midpoint progression should be maintained. A consistent midpoint progression in the salary structure means there is equal and consistent pay increases between salary grades as employees move up from one range or position to the next. Consistent midpoint progression also helps when job promotions or salary increases are given to employees. How to handle outliers 1. Green Circle Employees-those that fall below the range. Option 3: Market \& Performance-based Pay 2. Red Circle Employees-those that are paid above the range Option A: Do Nothing Option B: Set Increases by Position in Range Option C: Freeze Base Pay and Offer Performance-based Bonuses Option D: Freeze Base Pay Option E: Decrease Base Pay A constant midpoint progression should be maintained. A consistent midpoint progression in the salary structure means there is equal and consistent pay increases between salary grades as employees move up from one range or position to the next. Consistent midpoint progression also helps when job promotions or salary increases are given to employees