Which type of analysis is recommended for determining fair compensation for a job family?

Regression analysis is a statistical method that helps in understanding the relationship between different variables, making it particularly useful for determining fair compensation for a job family. By utilizing regression analysis, organizations can assess how various factors—such as job responsibilities, market trends, geographic location, and industry standards—impact compensation levels. This method allows for a more data-driven approach, enabling employers to identify patterns and correlations that inform their compensation strategies.

For instance, regression analysis can help identify how much pay varies with changes in experience or skill level across the job family, providing a more objective basis for compensation decisions than other methods. This analytical approach supports the creation of equitable pay structures that reflect both internal equity and external market competitiveness.